D'amico International Shipping S.a. · MIL:DIS
D'amico International Shipping — Q2 2021 Earnings Presentation
56 slides from D'amico International Shipping's earnings presentation, Jul 29, 2021
Slide 1: Q2 & H1 2021 Presentation
Q2 & H1 2021 Presentation d’Amico International Shipping July 29th, 2021
Slide 2: Disclaimer
DISCLAIMER. There shall be no offering or sale of any securities of d’Amico International Shipping S.A. in the United States of America, Switzerland, Canada, Australia, Japan, the United Kingdom or any jurisdiction in which such offer, solicitation or sale would be unlawful prior to its registration
Slide 3: Agenda
AGENDA. ▪ Executive summary ▪ DIS’ overview and key financials ▪ Market overview ▪ Why invest in DIS ▪ DIS’ ESG ▪ Appendix
Slide 4: Executive summary
Executive summary. • Net result – Due to the challenging market experienced in H1’21, DIS recorded a Net loss of US$ (15.2)m vs. a profit of US$ 17.1m in the same period of last year (Q2’21: Net loss of US$ (5.4)m vs. Q2’20: Net profit of US$ 15.6m). • Market outperformance through contract coverage
Slide 5: Executive summary (continued)
Executive summary (continued). • Opportunistic value creation through share buybacks – In Q1’21 DIS invested around € 0.3 million in share repurchases, in addition to around € 0.7 million already invested in FY’20. As at the end of June’21, DIS held nr. 18,326,911 own shares, representing 1.48% of i
Slide 6: DIS' overview and key financials
DIS’ overview and key financials
Slide 7: A modern, high-quality and versatile fleet
A modern, high-quality and versatile fleet. June 30th, 2021 DIS Fleet1 LR1 MR Handy Total % Owned 5.0 9.0 6.0 20.0 52.6% Bareboat chartered 1.0 7.0 0.0 8.0 21.1% Time chartered-in long-term 0.0 9.0 0.0 9.0 23.7% Time chartered-in short-term 0.0 1.0 0.0 1.0 2.6% TOTAL 6.0 26.0 6.0 38.0 100.0% • DIS c
Slide 8: Rapidly declining CAPEX commitments
Rapidly declining CAPEX1 commitments. Investment plan US$/mm 250.0 194.6 200.0 3.9 DIS has no remaining newbuilding 164.4 151.1 CAPEX, having fully completed its long- 12.8 150.0 0.7 101.2 term investment plan in FY’19 85.3 83.7 79.0 1.0 100.0 190.7 8.1 2.5 1.4 65.2 151.6 150.3 5.2 50.0 100.2 77.1 8
Slide 9: Lighter bank debt repayments and low refinancing risk
Lighter bank debt repayments and low refinancing risk. Forecasted bank debt financing cash-flow Daily bank loan repayment on owned vessels (Excluding overdraft facilities)1,2,3 (Excluding overdraft facilities)1,2,3 US$/mm US$/mm US$/mm US$/day 150 80 60 6,600 6,147 6,200 - 60 100 50 5,800 40 - 50 10
Slide 10: DIS' purchase options on leased vessels
DIS’ purchase options on leased vessels. Purch. Purch. Option First Ex. Option Vessel Name Build Date Obligation 1 First Ex. (In/Out of the money) Date Date High Priority2 Mar-05 Oct-19 Oct-22 Exercised in Q1'21 High Freedom Jan-14 Feb-20 Feb-28 In the money High Fidelity Aug-14 May-20 May-27 In the
Slide 11: Contracts and modern fleet to drive future results
Contracts and modern fleet to drive future results. Average TC rates1 • After peaking in 2020, current contracts rates decline % of ‘employment days’ US$/day 17,866 throughout 2021; the proportion of the fleet covered also falls gradually throughout the year. 70% 18,000 17,500 60% 17,000 • TC contra
Slide 12: Large potential upside to earnings
Large potential upside to earnings. Estimated fleet evolution (avg. n. of vessels)1,2 Estimated spot exposure (avg. n. of vessels)3 N. of ships (based on ‘available days’) N. of ships (based on ‘employment days’) 40 38.0 37.2 36.9 60 35 8.0 8.0 8.0 50 30 40 25 10.0 9.2 8.9 20 30 15 20 35.1 10 20.0 2
Slide 13: DIS focused also on cost savings
DIS focused also on cost savings. Daily operating costs – owned and General & administrative costs – total fleet bareboat vessels1 US$/day US$/m 7,800 9.0 7,600 8.0 7,400 7.0 7,200 6.0 7,000 5.0 6,800 7,534 4.0 8.1 7.0 6,600 3.0 5.9 6.2 6,400 6,796 6,809 2.0 6,679 6,200 1.0 6,000 0.0 H1'18 H1'19 H1'
Slide 14: Financial results. Net financial position
Financial results. Net financial position (US$ million) Dec. 31st, 2020 Jun. 30th, 2021 Gross debt (532.0) (505.7) IFRS 16 – additional liabilities (96.4) (92.6) Cash and cash equivalents 62.1 48.7 Other current financial assets1 4.7 3.8 Net financial position (NFP) (561.5) (545.9) Net financial pos
Slide 15: Financial results. H1'21 Results
Financial results. H1’21 Results Non-recurring items: (US$ million) Q2’20 Q2’21 H1’20 H1’21 (US$ million) Q2’20 Q2’21 H1’20 H1’21 TCE Earnings 78.7 46.1 150.1 88.9 Result on disposal of vessels 0.4 (0.5) (0.1) (1.1) Result on disposal of vessels 0.4 (0.5) (0.1) (1.1) Non-recurring financial items (0
Slide 16: Financial results. Key operating measures
Financial results. Key operating measures Key Operating Q1 2020 Q2 2020 H1 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 H1 2021 Measures Avg. n. of vessels 46.0 44.4 45.2 41.9 40.4 43.2 38.8 38.0 38.4 Fleet contact 64.6% 62.6% 63.7% 63.0% 56.6% 61.9% 49.5% 46.7% 48.1% coverage Daily TCE Spot 17,354
Slide 17: Market overview – market fundamentals
Market overview – market fundamentals
Slide 18: Asset values seem to have bottomed
Asset values seem to have bottomed. 1 Year TC MR (Eco) rate1 5 & 10 year-old MR values1 US$/day US$/m 19,000 18,550 17,875 35 18,000 31.0 28.0 17,000 15,906 30 27.0 27.5 28.0 26.5 26.8 26.0 16,000 15,500 16,575 16,625 15,250 25.0 25.0 29.0 14,850 14,875 25 27.5 15,000 14,625 22.0 26.0 25.0 13,969 23
Slide 19: Oil demand and refining throughputs recovering
Oil demand and refining throughputs recovering. Global oil demand1 Global refinery throughputs1 Million barrels per day Million barrels per day 105.0 90.0 100.6 100.6 84.1 98.8 99.0 85.0 82.9 82.9 83.1 100.0 82.1 81.2 81.8 82.1 81.8 80.6 80.1 80.2 99.4 80.0 82.4 98.1 78.2 95.0 80.4 81.1 79.9 79.1 79
Slide 20: Large but temporary build-up in floating storage
Large but temporary build-up in floating storage. Crude oil price (Brent, US$ bbl), forward curve1 CPP vs DPP and crude oil floating storage2 72.0 71.3 Million barrels 70.7 350 71.0 70.1 325 69.6 300 70.0 69.1 275 68.7 250 69.0 68.3 68.0 225 67.7 68.0 67.3 200 67.0 175 66.7 67.0 66.4 150 125 66.0 10
Slide 21: Near-term demand green shoots: vehicles are rolling
Near-term demand green shoots: vehicles are rolling Percentage change in US interstate vehicle miles traveled (VMT) vs. same week of 20191 % change vs. same week in 2019 20 10 0 -10 -20 -30 -40 -50 All Vehicles Passenger Vehicles -60 Trucks -70 Week Ending Date • Vehicle miles driven in the US have
Slide 22: Near-term demand green shoots: commercial flights
Near-term demand green shoots: commercial flights. % Change in number of commercial flights vs. 2019 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% -60.0% -70.0% -80.0% The number of commercial flights has been steadily increasing since June 2020, although currently still 24% lower than in 2019. This
Slide 23: Longer-term: healthy and resilient demand growth
Longer-term: healthy and resilient demand growth. World seaborne refined products trade1 Billion Tonne-miles ‘20-’22 CAGR: 6.8% 3,500 ‘00-’19 CAGR: 3.5% 3,000 • Seaborne oil product trade demand has contracted in 2019 2,500 and fell sharply in 2020 before an 2,000 expected sharp rebound in 2021 and
Slide 24: Longer-term: large potential upside to asset values
Longer-term: large potential upside to asset values. Historical MR TC and spot rates1 Historical MR asset values1 US$/day US$/m 45,000 40,000 1 YR TC and Spot rates are 60 respectively ~58% and ~92% 55 NB, 5yr old and 10yr old vessels are 35,000 below the last cycle peak 50 respectively ~31%, ~48% a
Slide 25: Longer-term: dramatic changes in the refinery landscape
Longer-term: dramatic changes in the refinery landscape. Portion of net refinery capacity additions ‘21-’26 40% • Global refinery crude distillation capacity should rise by 4.8m b/d 30% in the ‘21-26 period. 20% • ~91% of the planned refinery net capacity additions in the ‘21-’26 28% 28% 34% period
Slide 26: Several forces spurring demolition
Several forces spurring demolition. Scrap steel price1 Iron ore price2 US$/ldt US$/Ton 600 16-Apr-2010, 10-Oct-2014, 16-Jul-2021, 250 480 515 510 530 211 500 200 165 400 19-Aug-2011, 145 151 150 133 445 117 300 154 138 95 17-Jul-2020, 100 200 04-Mar-2016, 66 270 90 240 80 100 50 65 58 0 - May-2013 M
Slide 27: Growing pool of demolition candidates
Growing pool of demolition candidates. Historical and forecasted fleet composition by age (MRs and LR1s) (dwt, as at period end) 60% 54.8% 50% 45.6% 40% 36.8% 30% 30.2% 26.8% 25.0% 20% 15.9% 20.8% 12.5% 13.7% 12.8% 16.0% 8.9% 8.2% 9.2% 10% 11.1% 8.0% 5.7% 6.4% 6.6% 6.3% 6.9% 0% 5.6% 5.4% 4.9% 6.0% 4
Slide 28: Strong pick-up in demolitions already visible
Strong pick-up in demolitions already visible MR & LR1 deliveries, 20211 30 25 N. Of vessels 20 15 27 27 21 23 10 20 17 5 0 Q1'21 Q2'21 Q3'21 Q4'21 Estimated deliveries Actual deliveries MR & LR1 demolitions, 2018-20201 18 16 14 N. Of vessels 12 10 8 17 6 13 13 12 10 9 4 7 6 5 2 4 4 3 2 1 0 Q1'18 Q2
Slide 29: Limited newbuild orders
Limited newbuild orders. MR Newbuilding parity curve vs MR & LR1 orders second-hand values1 US$ Million N. Of vessels 40.0 38.0 250 35.0 31.5 30.0 28.0 200 25.0 25.0 19.5 18.5 150 20.0 225 15.0 13.0 100 189 10.0 143 135 50 100 97 68 5.0 73 76 51 50 66 68 30 0.0 15 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 1
Slide 30: Slowing fleet growth
Slowing fleet growth. MR & LR1 deliveries and scrapping (m dwt) (lhs), and net Current MR & LR1 fleet age fleet growth (%)1 (rhs) profile1 26.8% of current fleet Million Dwt 12 11.6%11.9% 12% Million Dwt 11.3% 40 6.6% of current fleet 10 10% 4.6% of current fleet 9.7% 9.5% 33.5 8.7% 35 8 8% 30 6 6%
Slide 31: Rebound in demand meets subdued fleet growth
Rebound in demand meets subdued fleet growth. Seaborne volume and MR/LR1 fleet growth (lhs)%1 vs 1year MR and LR1 TC rate (rhs) YoY% US$/day 20 35,000 31,090 29,185 15 30,000 27,006 10 23,446 23,597 25,000 22,819 18,866 5 16,492 17,754 18,127 20,000 16,625 16,62916,838 13,914 - 12,970 14,389 15,000
Slide 32: Why invest in DIS
Why invest in DIS
Slide 33: Historical NAV evolution
Historical NAV evolution. DIS’ Historical NAV evolution1 US$/m US$/share 1000 0.94 1.00 0.89 0.90 900 0.90 800 0.76 0.80 0.72 700 0.65 0.70 600 0.56 0.60 0.53 500 0.42 0.50 374 0.40 400 334 0.35 0.34 0.40 302 0.31 314 320 313 255 0.25 0.26 0.25 266 245 300 230 222 218 240 0.30 0.22 0.20 213 0.20 0.1
Slide 34: Why invest in DIS today
Why invest in DIS today. • Young-fleet, most of which acquired at historically attractive prices and at top-tier yards. Furthermore, vessels are mostly eco-design (75% of owned and bareboat ships) and IMO classed (76% of owned and bareboat ships). • First-class in-house technical management provides
Slide 35: DIS' ESG
BA INTERNATIONAL SHI Vy “3
Slide 36: DIS' core values
DIS’ CORE VALUES. Long term vision Guided by the values of family tradition, we build our success on long term planning and turning our promises into actions. Focus onthe environment and safety We do not compromise when it comes to environmental concerns. Care and attention, prudence and respect for
Slide 37: DIS' ESG at a glance
DIS’ ESG at a glance. DIS’ Key facts and DIS Industry DIS’ Key facts and DIS figures: Figures Average figures: Figures Lost Time Injury ✓ IMO Classed Fleet (%) 1 77.5% 39% ✓ Frequency (LTIF YTD) 2,7 0 Owned and bareboat ✓ fleet Age (Years) 1,3 6.9 11.8 ✓ Percentage of female colleagues onshore 2 43.
Slide 38: DIS' ESG – Corporate Governance
DIS’ ESG – Corporate Governance DIS is listed on the most demanding segment of the Milan stock exchange (the Star), and has therefore adopted a first-class corporate governance framework: • Listed on the Star segment of the Milan Stock Exchange since 2007; • High standards of corporate governance: •
Slide 39: DIS' ESG – Social responsibility
DIS’ ESG – Social responsibility DIS seeks a diverse and inclusive work environment, where team work is highly valued. The high levels of employee satisfaction result in high retention rates. • 24 onshore personnel as at 31 December 2020; • 600 seagoing personnel as at 31 December 2020; • 74% retent
Slide 40: DIS' ESG – Environment and Safety
DIS’ ESG – Environment and Safety DIS seeks to be an industry leader on environmental and safety issues: • Among the first fleets worldwide compliant with Monitoring Reporting and Verification criteria for CO2 emissions. • Since 2011 DIS has a fleet performance monitoring department to optimize vess
Slide 41: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable DIS’ Sustainable DIS’ Sustainable Sustainability Development Sustainability Development Sustainability Development Topics Goals Topics Goals Topics Goals Vessel energy Integrated Ship recycling efficiency management system for ongoing improvement
Slide 42: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable Activity performed by DIS Sustainability Topics Development Goals Vessel energy efficiency • Renewal of the fleet with “Eco” vessels, in line with IMO directives, thanks to the implementation of innovative technologies. Innovation: • Projects aime
Slide 43: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable Activity performed by DIS Sustainability Topics Development Goals Integrated management • Transparent statement of policies governing operations on board managed ships - in system for ongoing order to ensure safety and efficiency - and of the meth
Slide 44: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable Activity performed by DIS Sustainability Topics Development Goals Ship recycling • Preparation of hazardous material inventories on all new buildings and on the existing fleet. Stakeholder engagement • Stakeholder mapping and detection of needs an
Slide 45: Appendix
INTERNATIONAL SHIPPING SA
Slide 46: DIS' Shareholdings Structure
DIS’ Shareholdings Structure. Key Information on DIS’ shares 3 d'Amico International SA 65.65% Others 32.87% d'Amico International Shipping SA 1.48% 100.00% 2 1 Listing market Borsa Italiana, STAR No. of shares 1,241,053,006 Market capitalisation1 €116.2 million Shares repurchased / % of share capit
Slide 47: d'Amico Group Structure
d’Amico Group Structure. 100% d’Amico Società di Navigazione Spa d’Amico International S.A. 100% 100% d’Amico Shipping Ishima Pte Ltd Italia SpA 51% 85% Mida Maritime Rudder S.A.M. Company d.a.c 76.9% 100% Sirius Ship d’Amico Dry d.a.c. Management S.r.l. 65.66% d’Amico International Shipping S.A. 33
Slide 48: IMO (MEPC 76): CII and EEXI
IMO (MEPC 76): CII and EEXI. In June 2021, IMO's Marine Environment Protection Committee (MEPC 76) adopted amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that will require ships to reduce their greenhouse gas emissions. These amendments combin
Slide 49: EU Emission Trading System (ETS) and Fuel EU
EU Emission Trading System (ETS) and Fuel EU. The European Commission has recently published a set of legislative proposals to enable the EU to attain its 2030 target of reducing its greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels. In particular, the EU Commission proposed
Slide 50: Financial results. Consolidated Income Statement
Financial results. Consolidated Income Statement Q2 2021 Q2 2020 H1 2021 H1 2020 UNREVIEWED UNREVIEWED US$ Thousand 62,916 90,987 Revenue 122,037 185,342 (16,781) (12,327) Voyage costs (33,146) (35,268) 46,135 78,660 Time charter equivalent earnings* 88,891 150,074 (1,361) (4,300) Time charter hire
Slide 51: Financial results. Consolidated Balance Sheet
Financial results. Consolidated Balance Sheet As at As at US$ Thousand 30 June 2021 31 December 2020 ASSETS Property, plant and equipment (PPE) and right-of-use assets (RoU) 880,571 901,765 Investments in jointly controlled entities - 4,312 Other non-current financial assets 11,090 12,110 Total non-
Slide 52: Financial results. Consolidated Cash Flow Statement
Financial results. Consolidated Cash Flow Statement Q2 2021 Q2 2020 US$ Thousand H1 2021 H1 2020 UNREVIEWED UNREVIEWED (5,411) 15,622 Profit (loss) for the period (15,179) 17,139 16,203 17,040 Depreciation and amortisation of PPE and RoU 32,631 34,549 - 4,425 Impairment - 6,007 90 88 Current and def
Slide 53: DIS' current fleet overview. LR1 & MR Fleet
DIS’CURRENT FLEET OVERVIEW. LR1 & MR Fleet Owned - LR1 Tonnage (dwt) Year Built Builder, Country Interest1 IMO Classified Cielo di Londra 75,000 2019 Hyundai MIPO, South Korea (Vinashin) 100% - Cielo di Cagliari 75,000 2018 Hyundai MIPO, South Korea (Vinashin) 100% - Cielo Rosso 75,000 2018 Hyundai
Slide 54: DIS' current fleet overview. MR Fleet
DIS’CURRENT FLEET OVERVIEW. MR Fleet TC - IN Long Term with purchase option Tonnage (dwt) Year Built Builder, Country Interest1 IMO Classified High Leader 50,000 2018 Japan Marine United Co., Japan 100% IMO II/IMO III High Navigator 50,000 2018 Japan Marine United Co., Japan 100% IMO II/IMO III High
Slide 55: DIS' current fleet overview. Handy Fleet
DIS’CURRENT FLEET OVERVIEW. Handy Fleet Owned Tonnage (dwt) Year Built Builder, Country Interest1 IMO Classified Cielo di Salerno 39,043 2016 Hyundai MIPO, South Korea (Vinashin) 100% IMO II/IMO III Cielo di Hanoi 39,043 2016 Hyundai MIPO, South Korea (Vinashin) 100% IMO II/IMO III Cielo di Capri 39
Slide 56: Thank you!
Thank you!
d'Amico International Shipping — Q2 2021 Earnings Presentation on 6ix