Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — Non-Deal Roadshow (November 2015)

30 slides from Pacific Basin Shipping's roadshow presentation, Nov 27, 2015

  1. Slide 1: Navigating with resilience

    2 om ; Navigating with resilience Pacific Basin Experienced team Exceptional fleet N Customers first © a iJ] o 27 Nov 2015

  2. Slide 2: 26 Nov Announcement

    www.pacificbasin.com 26 Nov Announcement News and Announcement US$m 1H2015 2H2015 Full Year 2015 Guidance Guidance EBITDA +42 in line with 1H Underlying Result -15 MTM Bunker Hedges +17 similar one-offs unlikely at current Capital Gain +4 bunker prices Net Result +6 Net loss 5-20  No onerous contra

  3. Slide 3: Cargo System Business Model – Outperforming Market Rates

    Cargo System Business Model – Outperforming Market Rates Cargo Contract Business Model – Outperforming Market Indices  Experienced staff & global office network  Large fleet of high-quality substitutable ships US$/day  Large portfolio of cargo contracts & relationships 15,000  Direct end-user in

  4. Slide 4: Focused in Segment – Diversified Cargo and Customers

    Focused in Segmnet – Diversified Cargo and Customers Our Dry Bulk Cargo Volume in 3Q15   Diverse range of commodities reduces product risk China and North America were our largest market More than  60% of business in Pacific and 40% in Atlantic 400 customers! Data as at 24 Sep 2015 3Q15 Trading U

  5. Slide 5: Dry Bulk Spot Market at 30 Year Lows

    Dry Bulk Spot Market at 30 Year Lows Baltic Handysize Index (BHSI) & Baltic Supramax Index (BSI) US$ (net) / day $16,000 $14,000 $12,000 $10,000 $8,000 26 Nov 2015 $6,000 BSI: $4,635 $4,000 $2,000 BHSI: $3,940 $0 2012 2013 2014 2015  3Q improvement largely driven by healthier conditions in Atlantic

  6. Slide 6: Handysize Vessel Values

    Handysize Vessel Values US$ Million All time high spread between 60 new building and second hand values 50 40 20 Nov 2015 Newbuilding (35,000 dwt) 30 US$20.5m 20 10 5 years (32,000 dwt): US$11.5m 0 04 05 06 07 08 09 10 11 12 13 14 15 Source: Clarksons Platou 3Q15 Trading Update 6

  7. Slide 7: Dry Bulk Supply & Demand

    Dry Bulk Supply & Demand  1H 2014 Indonesian Export ban Quarterly YOY change %  2H 2014 Bunker price halved  1H 2015 Coal imports to China -38% 25%  2H 2015 Strong 3Q weak 4Q 20% A period of falling commodity prices and Supply stock drawing 15% 10% Demand 5% 0% -5% 2010 2011 2012 2013 2014 2015

  8. Slide 8: Chinese Minor Bulk Imports – Growing Since March

    Chinese Minor Bulk Imports – Growing Since March Million Tonnes 30 25 20 15 10 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2014 2013 Chinese imports of 7 minor bulks including Logs, Soyabean, Fertiliser, Bauxite, Nickel, Copper Concentrates & Manganese Ore These 7 commodities make up ov

  9. Slide 9: Coal Imports to China Reducing

    Coal Imports to China Reducing Year-on-year change in Chinese imports of dry bulk commodities so far in 2015 Annualised million tonnes Mill tonnes I ore Coal Soyb Cereal Logs Mang C-conc Ferts Baux N-ore 40 20 16 15 10 1 1 0 -1 -5 -7 -20 -15 -40 10 dry bulk commodities: total minus 73 million tonnes

  10. Slide 10: Dry Bulk Supply – Self Correcting Factors

    Dry Bulk Supply – Self Correcting Factors New Vessel Ordering is Down Per quarter annualised in % of fleet (dwt) Number of Delivery 25% 24% Chinese yards Slippage 20% delivering Handy bulk 15% vessels decreased Orderbook from 54 in 2012 Cancellations & 10% 11% to 21 in 2015 Conversions 5% 1.6% Fleet

  11. Slide 11: Our Increased Focus on Dry Bulk

    Our Increased Focus on Dry Bulk Early 2012 2015 Four business units Fully dry bulk focused US$m ME Towage 17 Newbuildings Terminals, etc Towage Minor player with no competitive RoRo 81 World’s largest advantage Dry Bulk Handysize Ships owner & operator Dry Bulk in operation Ships Strong platform but

  12. Slide 12: 1H15 Balance Sheet

    1H15 Balance Sheet US$m 30 Jun 15 31 Dec 14 Vessels & other fixed assets 1,578 1,585 Total assets 2,194 2,308 Total borrowings 930 1,000 Total liabilities 1,199 1,306 Net assets 995 1,002 Net borrowings (total cash US$392m) 538 636 Net borrowings to net book value of 34% 40% property, plant and equi

  13. Slide 13: Borrowings and Capex

    Borrowings and Capex As at 30 June 2015 (2016 CB updated as at 1 Oct 2015) Investors’ put option Maturity Investors’ put option Maturity US$ Million Oct 2016 Date Jul 2019 Date 200 182 183 180 Bought back US$27million 160 of 2016 CB in 3Q15 140 154 124 125 120 93 94 100 84 86 80 63 64 58 58 53 60 46

  14. Slide 14: 1H15 Daily Vessel Costs – Handysize

    1H15 Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Depreciation Charter-hire : Index-linked As at 30 June 2015 Opex Inward Charter Commitments Owned Chartered Days & rates Including finance lease vessels 2015-2016 US$/day Blended US$7,870 (2014: US$8,750

  15. Slide 15: Dry Bulk Market and Strategy

    Dry Bulk Market and Strategy Dry Bulk Market Pacific Basin Benefits:  Uncertain market situation - Oversupplied global fleet and reduced growth in dry bulk commodity demand – especially coal into China Now fully Handy focused  Scrapping, NB cancellations & postponements and very little new orderin

  16. Slide 16: 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,

  17. Slide 17: Pacific Basin Overview

    Appendix: Pacific Basin Overview  A leading dry bulk owner/operator of Handysize & Handymax dry bulk ships  Cargo system business model – outperforming market rates  About 200 dry bulk ships on the water serving major industrial customers around the world  Also owning/operating offshore tugs and

  18. Slide 18: Strategic Model

    Appendix: Strategic Model OUR STRONG CORPORATE & OUR LARGE VERSITILE FLEET FINANCIAL PROFILE Striving for best-in-class internal and external Fleet scale and interchangeable high-quality dry reporting, transparency and corporate stewardship bulk ships facilitate service flexibility to Robust balance

  19. Slide 19: 2015 Third Quarter Highlights

    Appendix: 2015 Third Quarter Highlights Pacific Basin Dry Bulk  Our business model enabled us to outperform spot market in 3Q: Q3 Q3 YTD Average Daily Earnings US$/day Outperformance US$/day Handysize TCE $8,350 +39% $8,070 Handymax TCE $9,630 +15% $9,460  3Q was highest quarter YTD but market rat

  20. Slide 20: Earnings Cover

    Appendix: Earnings Cover Handysize Handymax 53,090 Revenue Days 48,860 20,630 20,450 Revenue Days Revenue Days Revenue Days 4Q 76% 4Q 34,740 4Q $9,250 9,570 59% Revenue Days 71% 79% 4Q $11,170 3,860 days $8,820 $8,400 days 9,450 Revenue Days 41,510 39,290 16,900 16,590 days days days days 100% 100%

  21. Slide 21: Fleet List – 30 September 2015

    Appendix: www.pacificbasin.com Fleet List – 30 September 2015 Fleet Details Vessels in operation Newbuildings on order Total Owned Chartered Total Owned Chartered Total Dry Bulk Fleet Handysize 66 72 138 10 6 16 154 Handymax 16 59 75 5 1 6 81 Post-Panamax 1 1 2 - - - 2 Total Dry Bulk Vessels 83 132

  22. Slide 22: Experienced Management - Team

    Appendix: Experienced Management - Team Chairman & BOD Numbers Indicate Years in Company / Years in Shipping CEO Mats Berglund Asset Management 3/29 Morten Ingebrigtsen Finance & Accounting, CFO 26/29 Andrew Broomhead 12/12 HR P.B. Subbiah Company Secretary & Risk 12/21 Kitty Mok 19/19 Chartering Ch

  23. Slide 23: Sustainability

    Appendix: Sustainability  Applying sustainable thinking in our decisions and the way we run our business  Creating long-term value through good corporate governance and CSR Corporate Social Responsibility (CSR)  Guided by strategic objectives on (i) workplace practices (primarily safety), (ii) th

  24. Slide 24: Cash Flow

    Appendix: Cash Flow As at 30 June 2015 Operating cash flow US$58.8m EBITDA US$41.5m (Net of US$124m CB proceeds) 3Q15 Trading Update 24

  25. Slide 25: Convertible Bonds Due 2016

    Appendix: Convertible Bonds Due 2016 Issue size US$230 million (US$20.5m face value put back and repaid on 14 April 2014; Remaining: US$210m) Maturity Date 12 April 2016 (6 years) Investor Put Date and Price 12 April 2014 (4 years) at par Coupon 1.75% p.a. payable semi-annually in arrears on 12 Apri

  26. Slide 26: Convertible Bonds Due 2018

    Appendix: Convertible Bonds Due 2018 Issue size US$123.8 million Maturity Date 22 October 2018 (6 years) Investor Put Date and Price 22 October 2016 (4 years) at par PB’s Call Option 1) Trading price for 30 consecutive days > 130% conversion price in effect 2) >90% of Bond converted / redeemed / pur

  27. Slide 27: Convertible Bonds Due 2021

    Appendix: Convertible Bonds Due 2021 Issue size US$125 million Maturity Date 3 July 2021 (approx. 6 years) Investor Put Date and Price 3 July 2019 (approx. 4 years) at par Coupon 3.25% p.a. payable semi-annually in arrears on 3 January and 3 July Redemption Price 100% Initial Conversion Price HK$4.0

  28. Slide 28: Understanding Our Core Market

    Appendix: Understanding Our Core Market Our Focus 3Q15 Trading Update 28

  29. Slide 29: Dry Bulk Supply

    Appendix: Dry Bulk Supply Handysize Orderbook 379 vessels (13.9m dwt) m Dwt 8.9% 7 24% Shortfall Orderbook as Average Over Scrapping as % of 6 % of Existing Age 25 Years Existing Fleet 8.7% Fleet (Annualised) 5 4.7% 5.2% 4 6.6% Handysize 19% 9 8% 6% 3 (25,000-39,999 dwt) 6.5m 2 4.9m 1 Handymax 22% 8

  30. Slide 30: China Dry Bulk Trade, Iron Ore & Coal Demand

    Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand Chinese Dry Bulk Trade Volume China Coal Net Import China Iron Ore Sourcing for Steel Production % of total dry Mil Tonnes Mil Tonnes Mil tonnes Bulk trade 2100 32% 400 30% 1,400 1,301 1,292 28% 28% 350 1800 292 1,200 1,543 1,543 24% 300 1500 1,

Pacific Basin Shipping — Non-Deal Roadshow (November 2015) on 6ix