Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (June 2014)
35 slides from Great Eastern Shipping's investor presentation, June 2014
Slide 1: Business & Financial Review June 2014
The Great Eastern Shipping Co. Ltd. Business & Financial Review June 2014 1
Slide 2: Forward Looking Statements
Forward Looking Statements Except for historical information, the statements made in this presentation constitute forward looking statements. These include statements regarding the intent, belief or current expectations of GE Shipping and its management regarding the Company’s operations, strategic
Slide 3: Corporate Profile
Corporate Profile The Great Eastern Shipping Co. Ltd. Incorporated in 1948 Shipping Business Offshore Business Wet bulk Through subsidiary Greatship (India) Limited - Logistics Crude Tankers Product Tankers - Drilling Dry bulk 3
Slide 4: Company at a glance
Company at a glance India’s largest private sector Shipping Company Diverse asset base with global operations Completed 65 years of operations 30 years of uninterrupted dividend track record Shareholding Pattern as on March 31, 2014 Public FIIs 22% 26% Govt/FI 15% Promoters Bodies 31% Corporate 6% 4
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 29 ships aggregating 2.37 Mn dwt, avg.age 9.8 years 21 Tankers avg.age 10.3 years - 8 Crude carriers (4 Suezmax, 4 Aframax) avg.age 11.2 years - 12 Product tankers (4 LR1, 7 MR, 1 GP) avg.age 7.9 years - 1 Very Large Gas Carrier avg.age 24 years 8 Dry bulk carriers avg.
Slide 6: Shipping business- CAPEX plan
Shipping business- CAPEX plan Total committed CAPEX: ~ USD 205 mn Newbuilding: - 1 Medium Range (MR) Product Tanker with STX Group - expected delivery Q4FY16 - 2 Kamsarmax Dry Bulk Carriers with Tsuneishi Shipbuilding - expected delivery H1FY16 - 3 Kamsarmax Dry Bulk Carriers with Jiangsu New Yangzi
Slide 7: Asset Price Movement (5 yr old)- Tankers
20 40 60 80 0 100 120 140 160 180 Source: Clarkson 2002-01 2002-04 2002-07 2002-10 2003-01 2003-04 2003-07 2003-10 2004-01 VLCC 2004-04 2004-07 2004-10 2005-01 2005-04 2005-07 2005-10 2006-01 Suezmax 2006-04 2006-07 2006-10 2007-01 2007-04 2007-07 MR 2007-10 2008-01 2008-04 Amt in US$ mn 2008-07 200
Slide 8: Asset Price Movement (5 yr old) – Dry Bulk
- 20 40 60 80 100 120 140 160 Source: Clarkson 2002-01 2002-04 2002-07 2002-10 2003-01 2003-04 2003-07 2003-10 2004-01 2004-04 Capesize 2004-07 2004-10 2005-01 2005-04 2005-07 2005-10 2006-01 2006-04 Panamax 2006-07 2006-10 2007-01 2007-04 2007-07 2007-10 2008-01 2008-04 Amt in US$ mn 2008-07 Supram
Slide 9: Asset Price Movement
Asset Price Movement 20 year High /Low: (5 year old assets) (Amt in $mn) High Low Current Tankers VLCC 165 49 68 (2008) (1994) Suezmax 105 32 47 (2008) (1993) MR 46 20 29 (2007) (1999) Dry Bulk Capesize 155 25 46 (2008) (1999) Panamax 92 14 27 (2007) (1999) Supramax 75 13 26 (2007) (1998) 9 Source:
Slide 10: BDTI & BCTI Movement (Jan 2001 to Apr 2014)
BDTI & BCTI Movement (Jan 2001 to Apr 2014) 3500 BDTI BCTI 3000 2500 2000 1500 1000 500 0 - Sluggish demand & steady fleet growth keeping the TCYs low - Seasonal uptick in BDTI led by Winter demand and Chinese SPR program 10 Source: Baltic Exchange
Slide 11: Global Oil Demand Scenario
Global Oil Demand Scenario Global Oil demand growth Region wise demand growth 3.6% % chg 2014 (CY14 over 2.9% mn.bpd 2011 2012 2013 (E) CY13) 2.3% N.America 24.0 23.6 24.0 24.1 0.4% 1.6% 1.6% 1.4% 1.3% 1.4% 1.3% OECD Europe 14.3 13.8 13.7 13.6 (0.4)% 0.7% OECD Pacific (Japan & Korea) 8.2 8.6 8.4 8.3
Slide 12: Oil Trade – Changing patterns
Oil Trade – Changing patterns... Oil supply dynamics changing Oil demand sourcing matrix changing US – Shale revolution China & India in forefront Iran – Uncertainty on Sanctions Latin America – Increase in imports North Sea – Decreasing Supply of Refined Products Venezuela – Diversifying Customer b
Slide 13: Products Trade…Continues to grow steadily
Products Trade…Continues to grow steadily Global refinery crude distillation capacity set to rise by 9.5 mb/d from 2013 to 2018, Asia accounting for about 60% and M.E about 22%. Total world refining capacity will reach 106.7 mb/d by the end of 2018, of which 60% will be in non- OECD countries. US re
Slide 14: Products trade… Evolving Trade Patterns
Products trade… Evolving Trade Patterns 14
Slide 15: BDI Movement (Jan 2001 to April 2014)
BDI Movement (Jan 2001 to April 2014) 14000 China announces 12000 $586 bn stimulus 10000 Cargo growth but record NB 2008 market deliveries 8000 crash, BDI Robust dropped by 94% growth in 6000 imports from China 4000 2000 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Slide 16: Seaborne Bulk Trade … growing steadily
Seaborne Bulk Trade … growing steadily 5000 Global dry bulk seaborne trade 4500 reached 4.3 bn tons in 2013 4000 3500 Contribution to seaborne trade growth by commodity 3000 36% 2500 2000 1500 1000 22% 500 0 15% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (E) Mn.tons Minor Bulk Grains Coal Iro
Slide 17: Dry Bulk Trade … Evolving Trade Patterns
Dry Bulk Trade … Evolving Trade Patterns China… imports to continue India… catching up -Iron ore & Coal imports running at a -To be leading coal importer in the steady pace world - Coastal trade to firm up due to inland - Developing ports to specifically suit transport restrictions the trade - UMPPs
Slide 18: China’s dependency on imported iron ore
China’s dependency on imported iron ore Imported Iron Ore Steel Output (mn tonnes) CHINA: Iron ore import dependency has increased from 2013 820 775 37% in 2001 to 72% in 2013 and growing. 744 2012 717 Main Import Drivers 2011 686 683 2010 619 Domestic Iron ore (Fe) content < 25% and declining. 637
Slide 19: World Fleet Growth
World Fleet Growth 800 700 Dry Bulk Crude Product 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Mn.dwt Fleet growth 2002-2013 (mn dwt) 2003 2008 2013 % change (2013 over 2003) Dry 302 418 723 239% Crude 229 287 365 159% Product 76 116 138 182% 19 Source: Clark
Slide 20: … Fleet continues to grow
… Fleet continues to grow World Fleet Fleet CY2014 CY2015 CY2016+ addition* (1st May’14) (in mn dwt) Crude tankers 365 4% 3% 5% Product tankers 139 5% 5% 5% Dry bulk carriers 738 7% 7% 7% *includes only new building from yards … but high slippages may happen 20 Source: Clarkson
Slide 21: Scrapping… too little to cheer
Scrapping… too little to cheer Scrapping as % of world fleet (year wise) Fleet as on 1st May’14 Scrapping CY2010 CY2011 CY2012 CY2013 (in mn dwt) 365 Crude 1% 4% 5% 3% 139 Product 2% 2% 3% 2% 738 Bulk 5% 2% 2% 2% Require acceleration in scrapping to minimize the demand supply mismatch 21 Source: Cla
Slide 22: Global Shipbuilding… Shrinkage in Capacity
Global Shipbuilding… Shrinkage in Capacity Capacity to contract due to combination of: yard closures return to pre-boom business models such as ship repairs use of shipbuilding berths and workforces for non-shipbuilding activity reduction in berth productivity 22
Slide 23: Global Shipbuilding… Shrinkage in Capacity
Global Shipbuilding… Shrinkage in Capacity Yard Output (mn.gt) 60 49 48 50 42 40 37 35 30 27 19 20 10 0 2002 2006 2008 2010 2011 2012 2013 Yard output to decline from a peak of 49 mn gt in 2010 to 37 mn gt in 2013 …. A decline of 25% 2013 yard capacity still higher than the pre boom capacity of 2006
Slide 24: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary) Business & Financial Review March 2014 24
Slide 25: Offshore business- Fleet Profile
Offshore business- Fleet Profile The Greatship Group Current Owned Fleet 3 Jack Up Rigs (350ft) 4 Platform Supply Vessels (PSV) 9 Anchor Handling Tug cum Supply Vessels (AHTSV) 2 Multipurpose Platform Supply and Support Vessels (MPSSV) 6 Platform / ROV Support Vessels (ROVSV) On Order: 1 Jackup Rig
Slide 26: Greatship’s Modern & Technologically Advanced Fleet
Greatship’s Modern & Technologically Advanced Fleet Young Fleet Young fleet with an average age of approx. 4 years by FY 2013-14 - Higher utilization rates Revenue Demand shifting to modern vessels, especially as Efficiencies - Minimum down time safety becomes a major concern for oil companies Techn
Slide 27: Offshore Service Value Chain
Offshore Service Value Chain Exploration Development Production Length of - 3 to 5 years - 2 to 4 years - 5 to 55 years Typical Cycle - Collection of survey data - Construction & installation of - Management of oil & gas production platforms, production - Analysis & interpretation Description pipeli
Slide 28: E&P Activities – Steady Growth
E&P Activities – Steady Growth Global E&P Spending 2014 E&P spending breakup - National Oil Companies remain the largest - Global E&P spending to increase to ~$650bn in 2014 contributor to the E&P spending - Up 4% from 2013 - Energy security: key concern for every nation E&P spending to remain at a
Slide 29: Global Fleet Supply -Offshore
Global Fleet Supply -Offshore Average age of existing jackup rig fleet is about 21 years (Nos) Jackup Rigs AHTSVs PSV/Supply Current Fleet 484 2,874 2,190 Orderbook 142 185 452 % of O/B to current fleet 29% 6% 21% As of end Apr’14 - With increased focus on safety and efficiency, utilization for mode
Slide 30: Financial Highlights Q4 FY 2014
FINANCIAL HIGHLIGHTS Q4 FY 2014 30
Slide 31: FY 2014 Financial Highlights
FY 2014 Financial Highlights Standalone Key Figures Consolidated 2011-12 2012-13 2013-14 (Amount in Rs. crs) 2011-12 2012-13 2013-14 Income Statement 2,005 2,034 1,780 Revenue (including other income) 3,233 3,400 3,333 781 730 781 EBITDA (including other income) 1,364 1,553 1,677 143 146 205 Net Pro
Slide 32: FY 2014 Financial Highlights
FY 2014 Financial Highlights Standalone Key Figures Consolidated 2011-12 2012-13 2013-14 2011-12 2012-13 2013-14 38.97% 35.88% 43.86% EBITDA Margin (%) 42.18% 45.68% 50.32% 2.70% 2.89% 4.17% Return on Equity (ROE) (%) 5.34% 8.72% 8.75% 4.67% 4.03% 4.99% Return on Capital Employed (ROCE) (%) 6.16% 6.
Slide 33: Q4 FY 2014 Performance Highlights
Q4 FY 2014 Performance Highlights Breakup of revenue days Revenue Days Q4’FY14 Q4’FY13 Owned Tonnage 2,582 2,745 Inchartered Tonnage - 195 Total Revenue Days 2,582 2,940 Total Owned Tonnage (mn.dwt) 2.42 2.53 Mix of Spot & Time Days (in %) Q4’FY14 Q4’FY13 Dry Bulk Average TCY Details Spot % 75% 53%
Slide 34: Book Value & Net Asset Value (NAV) comparison
Book Value & Net Asset Value (NAV) comparison Last 4 quarters Consol. Book Value Consol. NAV (Rs. Per share) (Rs. Per share) March 2014 449 550 December 2013 454 539 September 2013 444 532 June 2013 439 494 34
Slide 35: Thank You
THANK YOU visit us at www.greatship.com 35
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