Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — H1 2010 Earnings Presentation
30 slides from Pacific Basin Shipping's earnings presentation, Aug 3, 2010
Slide 1: 2010 Interim Results
Pacific Basin 2010 Interim Analyst - 3 Aug 2010 Results
Slide 2: Pacific Basin Overview
Pacific Basin Pacific Basin Overview • One of the world’s leading dry bulk owner/operators of modern handysize y and handymax y vessels • Pacific Basin Dry Bulk’s business model is highly flexible • Large fleet of uniform, interchangeable, modern vessels • Mix of owned, long-term and short-term char
Slide 3: 2010 Interim Results Highlights
Pacific Basin 2010 Interim Results Highlights Revenue and Net Profit • Net Profit: US$51.9m (1H09: US$74.8m) US$ m 616.6 • Underlying Profit: US$65.6m (1H09: US$56.8m) 425.9 • Basic EPS: HK$0.21 HK$0 21 (1H09: HK$0.32) HK$0 32) Revenue 74.8 51.9 • Annualised ROE: 7% (1H09: 12%) Net Profit • Operatin
Slide 4: Dry Bulk Market Information
Pacific Basin Dry Bulk Market Information Sector Earnings Performance 1H2010 versus average 2H2009 180% Average 1H10 Handysize earnings were 160% g throughout stronger g 1H2010 Handysize +39% 140% BHSI than average earnings of 2H2009 120% Handymax +26% 100% BSI 80% Panamax Capesize earnings were +23
Slide 5: Chinese Dry Bulk Trade
Pacific Basin Chinese Dry Bulk Trade Chinese Dry Bulk Trade Volume China is a Net Importer of Coal Million Tonnes Million Tonnes 29% 1,200 , 28% 180 145 1,000 150 127 800 120 14% 11% 90 600 8% 8% % 12% 1076 60 400 957 22 15 30 427 491 594 648 200 0 0 -30 -216 -221 -129 -142 -255 -258 -200 200 -60 -4
Slide 6: Dry Bulk Demand
Pacific Basin Dry Bulk Demand Dry Bulk Fleet Demand and Supply % change YOY % Change 23.0 25 YOY 15 20 13.0 14.7 13.8 15 10.7 12 9.4 5.6 9.9 10 9 68 6.8 70 7.0 65 6.5 5 6 0 6.1 6.5 3 4.3 0.02 -5 -0.3 3.8 -10 -5 9 -5.9 0 -8.3 -15 -10.5 -3 2005 2006 2007 2008 2009 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 1Q10E 2Q10E 2
Slide 7: Dry Bulk Orderbook
Pacific Basin Dry Bulk Orderbook Orderbook as % Average of Existing Fleet Age Scheduled Orderbook by Year Million Dwt Total Dry Bulk >10,000 Dwt 61% (66%) 120 23% 100 18% Capesize 81% (96%) 11 80 15% Panamax 58% (50%) 12 60 Handymax a dy a 40 6.8% (35,000-59,999 Dwt) 48% (58%) 15 4% 20 1% Handysize
Slide 8: Dry Bulk Fleet Changes
Pacific Basin Dry Bulk Fleet Changes Dry Bulk Fleet Delivery & Scheduled Orderbook 2010 Dry Bulk Net Fleet Growth By Sector YOY Million Dwt 25% Capesize 22% 140 Scheduled Orderbook ^ 126 20% 120 Recorded Delivery Supramax 14% 100 15% Total Dry Bulk 80 Brokers’ B k ’ 10% Fleet 14% 60 non-delivery Pan
Slide 9: Pacific Basin Dry Bulk Earnings Coverage
Pacific Basin Pacific Basin Dry Bulk Earnings Coverage (as at 26 July 2010) Handysize Handymax 26,100 days Unfixed 25,810 days Fixed 2010 Total combined cover: 89% 18,940 days 2011 Total combined cover: 33% 10,640 days 9,170 days y 1,770 days 100% 86% 30% 100% 96% US$18,370 Pacific Basin Dry Bulk Fl
Slide 10: Dry Bulk Outlook
Pacific Basin Dry Bulk Outlook • Seasonal demand increase in 4Q10 • Heightened risk of unprecedented • Revival in Chinese raw materials imports vessel supply growth • Continued global economic recovery, • Unwinding Chinese economic stimulus especially y in the developing g countries such as the cool
Slide 11: PB Energy & Infrastructure Services
Pacific Basin PB Energy & Infrastructure Services FBSL PB Towage PacMarine PB Sea-Tow PB Towage Australia PB Towage Middle East (Offshore Projects) (Harbour Towage) (Offshore Projects) Towage Fleet: 40 vessels (as at 31 July 2010) PB Energy & Infrastructure Services US$m Offshore/project supply & ha
Slide 12: Energy & Infrastructure – Outlook
Pacific Basin Energy & Infrastructure – Outlook • Global economic recovery,y albeit slow • Rationalisation of containership p • Increase in oil and energy prices towage leading to less port calls • Resumption of infrastructure and • US moratorium on deep-water drilling offshore projects exerting dow
Slide 13: PB RoRo
Pacific Basin PB RoRo Net profit in 1H10: US$0.5 m (1H09: -US$0.4m) Annualised return on net assets: 1% RoRo Orderbook: 15% World RoRo Fleet 41 Vessels 460 Vessels (129,995 Lane Metres) (895,769 Lane Metres) LMs • Vessel “Humber Viking” fixed to Norfolk 6.2% 60,000 Line for 3 years, operating betwee
Slide 14: RoRo – Outlook
Pacific Basin RoRo – Outlook • Global and especially European • Significant RoRo newbuilding deliveries economic recovery to support expected in 2010 and 2011 modest growth in trailer volumes and • European austerity measures short-sea RoRo trades • Flatter Fl tt recovery in i US andd slow, l • Sign
Slide 15: 2010 Financial Highlights
Pacific Basin 2010 Financial Highlights As at 30 June 2010 1H10 1H09 Segment net profit 81.1 65.7 Treasury (11.8) (4.4) Non direct G&A (3.7) (4.5) Underlying profit 65.6 56.8 Unrealised derivative (expenses)/income (13.7) 15.0 Future onerous contracts - net provision write-back - 5.5 Net dry y bulk
Slide 16: Pacific Basin Dry Bulk – Handysize
Pacific Basin Pacifc Basin Dry Bulk – Handysize As at 30 June 2010 1H10 1H09 Change Revenue days (days) 13,940 12,460 +12% TCE earnings g ((US$/day) y) 16,840 13,610 +24% 24% Owned + chartered cost (US$/day) 11,750 9,380 +25% Segment net profits (US$m) 69 7 69.7 52 1 52.1 +34% Return on net assets (
Slide 17: Daily Vessel Costs - Handysize
Pacific Basin Daily Vessel Costs - Handysize Period ended 30 Jun 2010 Owned Chartered US$/day Blended US$11,750 (FY2009: US$9,690) Opex Charter-hire days & rates Depreciation 2010-2012 Finance cost 14,330 US$13,850 460 US$10,910 Direct overhead Charter-hire 12,820 days US$10,720 10,380 8,770 480 8,6
Slide 18: Balance Sheet
Pacific Basin Balance Sheet As at 30 June 2010 PB PB PB US$ US$m Dry Bulk EIS RoRo Treasury 30 Jun 10 31 Dec 09 Vessels & other fixed assets 725 177 194 - 1,122 998 Total assets 874 264 241 950 , 2,471 , 2,470 Long term borrowings 192 35 52 594 873 877 Total liabilities 291 45 55 597 1,020 1,014 Net
Slide 19: Cashflow
Pacific Basin Cashflow Period ended 31 June 2010 US$m 1H10 1H09 Operating cash inflows 83 61 Investing cash out / inflows (142) 13 - Vessels & other fixed assets related payments (187) (171) - Sales of vessels - 105 - Jointly controlled entities related payments and receipts (13) 40 - Net receipts f
Slide 20: Outlook
Pacific Basin Outlook • Focus on three core businesses: PB Energy & Pacific Basin Dry Bulk PB RoRo I f Infrastructure t t S Services i • For handysize and handymax bulk carriers, we expect recovery later in the year due to seasonal rebound and China restocking on balance a half year that is somewhat
Slide 21: Disclaimer
Pacific Basin 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 u
Slide 22: Appendix: Chinese Iron Ore Demand
Pacific Basin Appendix: Chinese Iron Ore Demand China Iron Ore Sourcing for Steel Production Chinese Steel & Iron Ore Prices Million Tonnes 1,032 US$/Tonne Steel Iron Ore 1,000 Price Price 960 906 800 200 800 628 566 720 Steel Price 180 600 (Hot Rolled Coil) 466 640 160 400 278 560 140 200 480 120 I
Slide 23: Appendix: China at late-Industrialisation Stage
Pacific Basin Appendix: China at late-Industrialisation Stage g Steel Consumption Per Capita Tons per Capita China (from 1990) China growth matches Japan (from 1950) 1.0 Korea (from 1970) historical trend in India (from 2005) 0.9 Japan and Korea 0.8 0.7 0.6 Suggests strong 0.5 growth in dry bulk 0.4
Slide 24: Appendix: Pacific Basin Dry Bulk - Diversified Cargo
Pacific Basin Appendix: Pacific Basin Dry Bulk - Diversified Cargo Pacific Basin Dry Bulk Cargo Volume 1H10 (Handysize and Handymax) Alumina 6% (-1%) Coal / Coke 8% (0%) Concentrates 11% (+3%) Other Bulks Bulks* 5% (0%) 15.6 15 6 Fertilisers 7% (-1%) Cement & Million Cement Clinker 6% (-2%) Tonnes L
Slide 25: Appendix: Pacific Basin Dry Bulk – Handymax
Pacific Basin Appendix: Paciifc Basin Dry Bulk – Handymax As at 30 June 2010 1H10 1H09 Change Revenue days (days) 5,570 5,150 +8% TCE earnings (US$/day) 23,680 19,840 +19% Owned + chartered cost (US$/day) 22,050 17,580 +25% Segment net profits (US$m) 8.8 11.5 -23% Return on net assets (%) 32% 102% -
Slide 26: Appendix: PB Energy & Infrastructure Services, PB RoRo
Pacific Basin Appendix: PB Energy & Infrastructure Services PB RoRo R R As at 30 June 2010 1H10 1H09 PB Energy & Infrastructure Services Offshore and project supply and harbour towage services (“Towage”) (1.2) 1.6 Fujairah Bulk Shipping (“FBSL”) 4.5 4.1 PacMarine Services 0.7 0.9 Segment net profit
Slide 27: Appendix: Borrowings and Capex
Pacific Basin Appendix: Borrowings g and Capex p At latest practical date Funded from US$970m cash, new borrowings, and US$ US$m future operating cashflows 250 230 200 174 Redeemable 150 in Feb 2011 138 120 120 100 69 57 50 42 42 40 42 42 36 23 16 17 18 20 8 9 8 0 2010 2011 2012 2013 2014 2015 2016
Slide 28: Appendix: Capex and Combined Value by Vessel Types
Pacific Basin Appendix: Capex and Combined Value by Vessel Types At latest practical date Vessels Commitments A Combined View of (including purchase options) Vessel Carrying Values and Commitments US$m Total US$354m US$m Total US$1,511m 250 900 866 119 174 200 33 38 700 11 150 138 3 500 469 3 22 100
Slide 29: Appendix: Impact of Financial Instruments
Pacific Basin Appendix: Impact of Financial Instruments Period ended 30 June US$ m Realised Unrealised 1H10 1H09 Net Gains / (Losses) Forward freight agreements (4.6) (1.2) (5.8) (12.3) Bunker swap contracts 2.7 (11.1) (8.4) 33.0 Interest rate swap contracts (2.8) (1.4) (4.2) 1.4 (4.7) (13.7) (18.4)
Slide 30: Appendix: Convertible Bonds Due 2016
Pacific Basin Appendix: Convertible Bonds Due 2016 Issue size US$230 million 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 April and 12 October Redemption Price 100% Initial Conversion Price H
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