Performance Shipping Inc. · NASDAQ:PSHG
Performance Shipping — Diana Containerships — Merger or Acquisition (January 2011)
29 slides from Performance Shipping's merger presentation, Jan 11, 2011
Slide 1: Partial Spin-off to Diana Shipping Inc. Shareholders
Partial Spin-off to Diana Shipping Inc. Shareholders January 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation is being provided for information purposes only in connection with partial spin-off of shares of Diana Containerships Inc, to the shareholders of Diana Shipping Inc., and may not be distributed, published or reproduced, in whole or in part by the recipient. Th
Slide 3: Opportunity Overview
Opportunity Overview
Slide 4: Spin Out Summary
Company Diana Containerships Inc. (“DCI”) Stock Exchange NASDAQ Ticker DCIXV (from 3 rd to 19 th of January) DCIX (from 19 th of January onwards) Security Common Stock Shares to be Distributed Approximately 2,667,066 Shares Current Shares Outstanding 6,106,161 Shares Dividend Ratio 0.032542 DCI Shar
Slide 5: Executive Management Team
Name Title Age Years in Industry Other Experience / Qualifications Symeon Palios CEO, Chairman 69 41 § Naval architect and engineer § Founded Diana Shipping Agencies S.A. in 1972 § Director of Diana Shipping Inc. since March 1999 § Board of Directors of the UK Freight Demurrage and Defence Associati
Slide 6: Independent Board of Directors
Name Title Age Other Experience / Qualifications Konstantinos Fotiadis Chairman, Audit Committee 59 § Has served as Chairman of Audit Committee since DCI’s inception § Has served as an Independent Advisor since 1994 § President and Managing Director of Reckitt & Colman (Greece) from 1990 to 1994 § G
Slide 7: Investment Highlights
Investment Highlights § Attractive point in cycle to buy containerships – Downturn has created attractive opportunities from owners, shipyards and banks – Vessel values at attractive levels – Ability to earn reasonable average yields and participate in the recovery of vessel values and charter rates
Slide 8: Diana Containerships Overview
Diana Containerships Overview § Raised gross proceeds of $88.4 million in March 2010 through equity private placement § Purchased two containerships for an aggregate purchase price of $93.5 million – 3,400 TEU German built containerships – Delivered from the yard in 2010 § Shareholder friendly struc
Slide 9: Diana Containerships' Value Creation Proposition
§ Buy “right” – Identify attractive opportunities – Purchase at favorable valuations – Type of vessels: 2,500 - 7,000 TEU § Profit from economic recovery – Operate in spot market / on short- or medium-term charters until economic recovery – Return to a favorable supply / demand equation – Benefit fr
Slide 10: Market Opportunity Overview
Market Opportunity Overview
Slide 11: Containership Overview & Historic Market Growth
Containership Deployment by Size Category World Container Port Throughput (Million TEU) Containership Overview & Historic Market Growth Source: Drewry Source: Drewry
Slide 12: Charter Rates Are Recovering From Historic Lows
Inflation Adjusted Time Charter and Operating Cost for 3,500 TEU Containership Vessel Charter Rates Are Recovering From Historic Lows Source: Drewry
Slide 13: Asset Values are Rising but Remain Below Historical Averages
Inflation Adjusted Secondhand Vessel Values for 5 year old 3,500 TEU Gearless Containerships Asset Values are Rising but Remain Below Historical Averages Source: Drewry
Slide 14: Containership Demand is Highly Correlated to Global GDP Growth
Containership Demand is Highly Correlated to Global GDP Growth 1. Source: International Monetary Fund 2. Source: Drewry. Note: World Container Cargo Growth represents Year-on-Year change in total port handling Median multiplier of 2.3x GDP growth
Slide 15: Liner Operators in Recovery
EBIT Performance of Liner Majors ($ billions) Liner Operators in Recovery Source: Drewry, represents global container liner industry, which includes companies such as AP Moller-Maersk, CMA CGM, Mitsui O.S.K. Lines, Ltd., and Orient Overseas (International) Limited.
Slide 16: Estimated Supply/Demand Balance
Estimated Supply/Demand Balance Current Market In Recovery Source: Drewry 1. Assumes no delivery slippage from previous years § Increases in supply primarily due to delivery of large vessels ~60% 1 of supply growth from the larger 8,000+ TEU vessel classes
Slide 17: Orderbook Creates Opportunity
Containership Orderbook by Size (As of Jan 1, 2011) Containership Orderbook Capacity by Scheduled Delivery Year Orderbook Creates Opportunity Source: Drewry Source: Drewry Orderbook in the Post Panamax, Panamax and Intermediate represents 15% of existing capacity in those vessel classes
Slide 18: Delays & Cancellations Impacting Orderbook
Containership Deliveries - Actual vs. Expectations § Financial difficulties faced by ship owners and liner operators, and the unwillingness and inability of the global ship finance banks to lend, is driving cancellations and deferrals to the orderbook Delays & Cancellations Impacting Orderbook Sourc
Slide 19: Slow Steaming - Increases Need for Containerships
Average Number of Vessels per String § Slow steaming is the process of adding a vessel to a scheduled liner service route – Allowing vessels to run at reduced speeds having a material impact on fuel costs – In addition to the economic benefit, slow steaming reduces carbon emissions Slow Steaming - I
Slide 20: Company Overview
Company Overview
Slide 21: Modern, High Quality Fleet
Ship Year Built Purchase Price Capacity (TEU) Gross Rate (USD Per Day) Charterer Commission Redelivery Min Max Sagitta 2010 $45.7 million 3,426 $16,000 A.P. Moller - Maersk A/S 4.25% Mar- 2011 Jun- 2011 Centaurus 2010 $47.2 million 3,426 $20,000 CSAV Valparaiso 1.25% Jul - 2012 Oct- 2012 Modern, Hig
Slide 22: Relationships with Key Charterers
Relationships with Key Charterers § Diana’s management team has significant experience working with leading charterers in the global containership market
Slide 23: Successful History Investing in Shipping
Successful History Investing in Shipping § Diana Shipping Inc. was formed near a market bottom enabling investors to realize value through an IPO Source: Factset Fundamentals
Slide 24: Successful Public Company Track Record
Total Debt / LTM EBITDA Net Debt / LTM EBITDA 2.0x 0.3x 5.0x 4.3x 8.9x 7.9x 2.5x 2.2x 5.4x 4.5x 2.9x 1.2x Successful Public Company Track Record Diana Shipping Inc. Total Appreciation Total Returns Comparison for Dry-Bulk Comps Note: Analysis a total return for all companies’ returns since the Diana
Slide 25: Financial Overview
Financial Overview
Slide 26: Financial Highlights
Financial Highlights § Limited competition for vessel acquisitions – Traditional container players are capital constrained § Maintain a conservative capital structure § Access the capital markets to fund additional vessel acquisitions § Company will consider, from time to time, whether to implement
Slide 27: Summary Capitalization
($ in millions) Amount Out % of Capital Structure Summary Capitalization Source: Company filings Note: Market capitalization based on 1/10/2011 close of $14.75
Slide 28: Better Positioned Than Peers
Net Debt / Net Book Capitalization Net Debt / Enterprise Value Recent Stock Price Performance of Peers CapEx Commitments vs. Market Capitalization § Current public containership operators constrained by balance sheets and not able to take full advantage of trough asset valuations and increasing char
Slide 29: Investment Highlights
Investment Highlights § Attractive point in cycle to buy containerships – Downturn has created attractive opportunities from owners, shipyards and banks – Vessel values at attractive levels – Ability to earn reasonable average yields and participate in the recovery of vessel values and charter rates
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