Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — H1 2008 Earnings Presentation
28 slides from Pacific Basin Shipping's earnings presentation, Aug 4, 2008
Slide 1: Pacific Basin Interim Results 2008
Stock Code: 2343 Pacific Basin Interim Results 2008 As at 4 August 2008
Slide 2: What is Pacific Basin?
What is Pacific Basin? X Leading dry bulk shipping company principally operating in the Asia Pacific region X 29 offices worldwide, 490+ group staff, 2,400+ seafarers * X We carry the dry bulk commodities required for Asia’s growth X Expanding in the roll on roll off shipping, ports and port service
Slide 3: 1H08 Results Highlights
1H08 Results Highlights X Profits: US$337.6m (US$162.9m) y Basic EPS: HK$1.62 (HK$0.81) X Time Charter Equivalent Earnings: US$586.4m (US$269.2m) X Includes US$38.6m (US$50.2m) disposal gains X ROE: 68% (63%) y Net Profit Margin: 58% (61%) X Interim dividend 2008: HK$0.76 y Payout: 50% (55%) X Avera
Slide 4: Fleet Profile
Fleet Profile Fleet numbers as at 31 July 2008 Dry Bulk Fleet – 93 Total 140 ships Short Term Chartered - 21 Other Ships - 26 3 Handysize: 71 Handymax: 19 RoRo: 6 Tugs: 17 Newbuilding 1 Newbuildings 6 Newbuilding 1 Newbuilding 6 Chartered Chartered 15 16 Chartered Owned 11 47 Operating Lease Newbuil
Slide 5: Diversified Cargo
Diversified Cargo Total Handysize and Handymax Cargo Volume Mix 1H08 Log & Forest Products 6% Fertilisers 11% Grains 12% Steel & Scrap 9% Other Bulks* 10% 15.6 Cement 5% million tonnes Sugar 3% Cement Clinker 4% (+19% vs 1H07) Aggregates 3% Alumina 3% Ore 11% Concentrates 7% Petcoke 5% Coal/Coke 7%
Slide 6: Baltic Exchange Indices
Market Review Baltic Exchange Indices The Baltic Dry Index (BDI) The Baltic Handysize Index (BHSI) 28 Jul 2008 28 Jul 2008 8,513 US$ 36,330 $US/day (net) 48,000 12,000 42,000 10,000 36,000 8,000 30,000 6,000 24,000 4,000 2,000 18,000 0 12,000 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jul-08 May-06 Nov-06 M
Slide 7: Dry Bulk – 1 Year Time-Charter Rate
Market Review Dry Bulk – 1 Year Time-Charter Rate US$/day (net) As at 28 Jul 2008 180,000 160,000 Capesize 140,000 $147,250 (Jan07: $59,138) 120,000 100,000 Panamax $70,775 (Jan07: $29,450) 80,000 Supramax 60,000 $55,575 (Jan07: $27,729) 40,000 Handysize 20,000 1-Year: $36,575 (Jul07: $26,600) 3-Yea
Slide 8: High Tonnage Demand
Market Review High Tonnage Demand Changes in Tonnage Demand % change from year before Estimated 13.0% 14 11.4% tonnage 12 10.7% demand 10 7.5% growth of 7.5% 6.1% 8 from 2007 to 2008 3.6% 6 4 2 Demand for ships 0 enhanced by -2 2003 2004 2005 2006 2007 2008E cargo volumes & annualised average voyage
Slide 9: Lower Orderbook in Handysize
Market Review Lower Orderbook in Handysize Type of Vessels Orderbook as % of Existing Fleet (dwt) Dry Bulk * 64% Significant Ave. Age orderbook Capesize 100K + slow down 100% 11.5 in 1H08 Panamax 60-100K 46% 12.1 Handymax 35K-60K 15.2 55% Handysize 25,000- 34,999 40% 18.1 Source: Clarkson 1 July 200
Slide 10: Ageing Handysize Fleet
Market Review Ageing Handysize Fleet Total handysize 25,000- 34,999 dwt fleet as at 1 July 2008: 1,272 Vessels (37.4mil dwt) Delivery slippage Orderbook 25,000-34,999dwt (40%) in 1H08: 16% 14.7% estimate 13.1% 12% 23%* in handysize 8.4% (35% for dry bulk) 8% 30 yrs or above 4.0% 20% 4% 0-15 yrs Unce
Slide 11: Dry Bulk Carrier Sale & Purchase Market
Market Review Dry Bulk Carrier Sale & Purchase Market 5-year old handysize vessel price US$ million July 08: 55 US$ 54 mil Second hand vessel 50 +26% prices continue 45 to stay high 40 35 30 Jan 08: 25 US$ 43 mil Our asset value moves 20 in line with market values 15 10 Jan-00 Jan-01 Jan-02 Jan-03 J
Slide 12: 2008 Financial Highlights
Financial Review 2008 Financial Highlights 1H08 1H07 TCE Earnings (US$m) 586.4 269.2 Reported net profit 337.6 162.9 Less: Vessel disposal gains (38.6) (50.2) Net profit before disposal gains 299.0 112.7 Basic EPS (HK¢) 162 81 Return on average shareholders’ equity 68% 63% Interim dividends (HK¢ per
Slide 13: Results – Handysize Freight & Charter-hire
Financial Review Results – Handysize Freight & Charter-hire Drivers of the results 1H08 1H07 % Change FY07 Revenue days (days) 11,540 9,590 +20% 20,100 TCE earnings (US$/day) 32,460 19,750 +64% 23,200 Owned + chartered cost (US$/day) 12,840 9,370 +37% 10,240 Contribution (US$m) 226.4 99.5 +128% 260.
Slide 14: Results – Handymax Freight & Charter-hire
Financial Review Results – Handymax Freight & Charter-hire Drivers of the results 1H08 1H07 % Change FY07 Revenue days (days) 2,900 2,260 +28% 4,870 TCE earnings (US$/day) 46,100 25,180 +83% 30,040 Owned + chartered cost (US$/day) 32,940 20,580 +60% 23,050 Contribution (US$m) 38.2 10.0 +282% 34.0 Mo
Slide 15: Daily Vessel Costs - Handysize
Financial Review Daily Vessel Costs - Handysize As at 1H08 Owned Chartered Opex US$/day Blended US$12,840 (FY2007: US$10,240) $16,230 Depreciation 630 Finance cost 15,000 Direct Overhead $12,850 Charter-hire 12,500 620 $9,330 Contracted 10,000 $8,640 Charter-hire 1,300 7,500 1,080 +28% 2008: US$15,6
Slide 16: Impact of Financial instruments
Financial Review Impact of Financial instruments Six months ended 30 June US$ million Realised Unrealised 2008 2007 Net Gains / (Losses) Interest rate swap contracts (0.2) (0.4) (0.6) 1.2 Bunker swap contracts 10.0 44.9 54.9 5.8 Forward freight agreements (10.4) (1.3) (11.7) (21.4) (0.6) 43.2 42.6 (
Slide 17: Balance Sheet
Financial Review Balance Sheet 30 Jun 08 31 Dec 07 US$mil Net book value of fixed assets 1 898.6 755.9 Gross borrowings 612.3 660.2 Cash 804.3 649.5 Net cash / (borrowings) 192.0 (10.7) Shareholder's equity 1,333.2 867.6 Net cash (borrowings) / Fixed assets 21.1% (1.4)% Net cash (borrowings) / Share
Slide 18: Capex and Combined Value by Vessel Types
Financial Review Capex and Combined Value by Vessel Types A Combined View of Vessels Commitments Vessel Carrying Values and Commitments US$ mil Total US$721 mil US$ mil Total US$1,616 mil 350 1,000 929 312 300 8 165 800 250 97 196 577 200 600 163 18 283 150 23 400 667 507 68 129 100 50 29 200 110 50
Slide 19: Cashflow
Financial Review Cashflow US$m 1H08 1H07 Operating cash inflows 284.2 97.0 Investing cash in/ (out) flows (217.5) 10.2 - Payments for vessels and other fixed assets (201.2) (167.6) - Sales of vessels 80.6 176.0 - Purchase of available-for-sale financial assets (40.3) - - Investment in jointly contro
Slide 20: Dividend
Financial Review Dividend Year Dividend US$mil HK$ per share Payout Ratio 2007 Final (paid 16 Apr 08) 152.8 75.0 Interim (paid 31 Aug 07) 91.3 45.0 Total for 2007 244.1 120.0 52% 1H08 Interim (ex div 18 Aug 08) 170.0 76.0 50% (payable 29 Aug 08) Revised dividend policy: Minimum 50% payout of attribu
Slide 21: Business Development
Business Development & Outlook Business Development X 6 newbuildings will deliver in 2009 to 2011 including 2 purchase Roll on Roll off (RoRo) options X Good demand prospects, high average fleet age and low orderbook Fujairah Bulk Shipping X Strategy to be the market leader in sourcing and transport
Slide 22: Roll On Roll Off (RoRo)
Business Development & Outlook Roll On Roll Off (RoRo) X 6 newbuildings will deliver in 2009 to 2011 including 2 purchase options X Used for transportation of wheeled cargoes (mostly trucks) which are loaded over a ramp X Proven design, suitable for the common short sea trades 1,300-2,700LM, 1-Year
Slide 23: Attractive RoRo Sector
Business Development & Outlook Attractive RoRo Sector X Attractive fundamentals X Immediate “short-sea” trade demand is in Asia Minor & Europe, with Pacific Basin also well positioned to lead the way in the Asian RoRo sector X Low orderbook (<20%) X 42% of vessels aged 25 years or over Age Profile R
Slide 24: Ports and Port Services
Business Development & Outlook Ports and Port Services Ports Infrastructure Unit X APMIG - Nanjing Longtan Tianyu Terminal (JV: 45% equity) X February 2008, formal operations commenced and in 1H08 handled over 0.6mil tonnes of cargo, mainly cement, fertilisers and chemicals X Further projects identi
Slide 25: FBSL & Maritime Services
Business Development & Outlook FBSL & Maritime Services Fujairah Bulk Shipping X JV in Middle East for supplying rock and aggregates using tugs, barges and handysize ships from Fujairah to Qatar and Kuwait X 50:50 joint venture between Pacific Basin and the Government of Fujairah X Strong performanc
Slide 26: Earnings Coverage
Business Development & Outlook Earnings Coverage Earnings coverage as at 21 July 2008 Handysize Handymax Revenue Day Revenue Day Unfixed 25,000 13% 22,730 days 8,000 21,970 days Fixed 6,910 days^ 20,100 days 17% 42% 20,000 7% 6,000 4,870 days 15,000 33% 4,000 3,360 days^ 60% US$48,070 10,000 US$31,0
Slide 27: Outlook
Business Development & Outlook Outlook X Handysize revenue days set to increase by 13% in 2008 on 2007 & 58% for handymax X 64% of 2009 handysize days uncovered; current spot market stands at US$36,330 per day net X Solid balance sheet – US$192m net cash, total assets of US$2.1 billion and sharehold
Slide 28: Disclaimer
Disclaimer This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Pacific Basin and certain plans and objectives of the management of Pacific Basin. Such forward looking statements involve known and unknown risks,
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