Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — H1 2007 Earnings Presentation
28 slides from Pacific Basin Shipping's earnings presentation, Aug 7, 2007
Slide 1: Interim Results 2007
Pacific Basin Stock Code: 2343 Interim Results 2007 For the six months ended 30th June 2007 7 August 2007
Slide 2: 1H07 Results Highlights
1H07 Results Highlights Profits: US$162.9m (36.4m) y Basic EPS: HK81¢ (22¢) Includes US$50.2m (Nil) disposal gains Handysize average daily charter rate: US$19,750/day (US$14,400/day) ROE: 63% (25%) y Net Profit Margin: 61% (26%) Interim dividend 2007: HK45¢ y Payout: 55% (92%) Total shar
Slide 3: What is Pacific Basin?
What is Pacific Basin? World’s largest modern handysize vessel owner/operator 17 offices worldwide, 260 shore-based staff, 1000 seafarers We carry the dry bulk commodities required for China’s and Asia’s growth Enjoying record high rate environment brought about by tight balance of ship supp
Slide 4: Fleet Profile
Fleet Profile Core fleet totals Handysize: 71 Handymax: 12 83 ships Newbuilding 1 Newbuilding Managed 2 Chartered 4 9 Chartered 8 Core & short-term fleet Operating Lease 23 Owned Newbuilding 1 totals 113 ships Chartered 3 Owned 2 41 Finance Lease 16 Investment programme totals Newbuilding 11 US$225
Slide 5: Diversified Cargo
Diversified Cargo Total Handysize and Handymax Cargo Volume in 1H07 Log & Forest Products 6% Fertilisers 11% Grains 11% Steel & Scrap 8% Cement 9% 13.2 million tonnes Alumina 3% Petcoke/Coal/Coke 14% Other Bulks* 15% Sugar 5% Ore 6% 1H07 cargo volume grew Concentrates 7% by 55% over 1H06 Salt 5% Div
Slide 6: Market Review
Market Market Review Review
Slide 7: Baltic Exchange Indices
Baltic Exchange Indices The Baltic Dry Index (BDI) The Baltic Handysize Index (BHSI) $US/day 2 Aug 2007 2 Aug 2007 8,000 7000 33,000 US$ 32,441 7,000 6,000 30,000 5,000 27,000 4,000 24,000 3,000 21,000 2,000 18,000 1,000 15,000 0 12,000 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 May-06
Slide 8: Dry Bulk – 1 Year Time-Charter Rate
Dry Bulk – 1 Year Time-Charter Rate US$/day 100,000 As at 29 July 2007 90,000 Capesize 80,000 $91,200 (Jan07: $59,138) 70,000 60,000 Panamax 50,000 $50,113 (Jan07: $29,450) 40,000 Supramax $42,750 (Jan07: $27,729) 30,000 Handysize 20,000 1-Year: $27,550 (Jan07: $18,169) 3-Year: $21,850 (Jan07: $15,8
Slide 9: Strong Growth in Dry Bulk Trade
Strong Growth in Dry Bulk Trade Global Trade in Dry Bulks Mil Tonnes Long term historical 2003-2006E CAGR: 6.4% 3,500 growth of 2,971 approx. 2%... 3,000 2,818 2,666 2,514 2,500 2,218 2,340 …but pace has quickened 2,000 in last 5 years 1,500 Dry bulk trade volume 1,000 highly correlated 2002 2003 20
Slide 10: Tonne-Mile Effect
Tonne-Mile Effect Global Trade in Dry Bulks in Tonne-miles 2003-2006E CAGR: 7.2% Voyage distances Billion tonne miles have grown… 16,000 14,600 13,745 and continue to do so 14,000 12,838 12,079 12,000 10,449 11,144 10,000 8,000 7% real growth 6,000 driver for 4,000 dry bulk ship demand 2,000 0 2002
Slide 11: Port Congestion Squeezing Supply
Port Congestion Squeezing Supply Total Vessel Congestion at Australian Ports All Vessels No. of Vessels Panamax Capesize 240 Coal demand the 200 dominant cause 160 120 Direct impact on handysize rates 80 40 0 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Source: Monson Agencies Australia 11
Slide 12: Low Orderbook in Handysize
Low Orderbook in Handysize Type of Vessels Orderbook as % of Existing Fleet Container 48% Tanker 40% All yards are almost full until 2010 Others 26% Dry Bulk 39% Capesize 100K + Ave. Age Yards starting to take 60% 11.1 more dry bulk orders Panamax 60-100K 30% 11.6 Handymax 40K-60K But still limited
Slide 13: Ageing World Fleet Points to Scrapping
Ageing World Fleet Points to Scrapping More than No. of Vessel 32% older 16% ≥30Years 32% ≥ 25Years 55% ≥20Years 58% >15Years Orderbook: than 25 years 20% 100 Jul 2007 - 25-35K dwt Total Fleet: 1,230 90 80 Uncertainty over 70 ‘real’ deliveries 60 from 2009 50 40 30 Low supply of 20 handysize despite
Slide 14: Dry Bulk Carrier Sale & Purchase Market
Dry Bulk Carrier Sale & Purchase Market 2nd-hand 5-year old handysize vessel price (25K-35K dwt) US$ million August 07: Now worth approx. 40 US$39.0 mil US$39m (Clarkson), but US$41 million 35 by our estimates 30 25 Our asset value moves 20 in line with rising market values 15 10 Jan-00 Jan-01 Jan-0
Slide 15: Financial Review
Financial Financial Review Review
Slide 16: 1H07 Financial Highlights
1H07 Financial Highlights 1H07 1H06 TCE Earnings (US$m) 269.2 140.4 Vessel disposal gains 50.2 - Reported net profit 162.9 36.4 Return on average shareholders’ equity 63% 25% Basic EPS (HK¢) 81 22 Dividends (HK¢ per share) 45.0 20.0 Payout ratio 55% 92% 16
Slide 17: Results – Handysize Freight & Charter-hire
Results – Handysize Freight & Charter-hire Drivers of the results 1H07 1H06 % Change Revenue days (days) 9,590 7,570 +27% TCE earnings (US$/day) 19,750 14,400 +37% Owned + chartered cost (US$/day) 9,370 8,540 +10% Contribution (US$m) 99.5 44.4 +124% Deliveries of 2006 1H07 TCE rates Blended cost ref
Slide 18: Results – Handymax Freight & Charter-hire
Results – Handymax Freight & Charter-hire Drivers of the results 1H07 1H06 % Change Revenue days (days) 2,260 1,320 +71% TCE earnings (US$/day) 25,180 15,690 +60% Owned + chartered cost (US$/day) 20,580 17,710 +16% Contribution (US$m) 10.0 (3.0) Division fully operational Exceptional 2Q07 TCE rates
Slide 19: Daily Vessel Costs - Handysize
Daily Vessel Costs - Handysize Opex Owned Chartered US$/day Depreciation Blended US$9,370 (FY2006: US$8,880) $11,580 Finance cost 12,000 400 Direct Overhead $10,040 Charter-hire 10,000 570 $8,480 $8,330 8,000 960 830 Contracted Charter-hire 2,000 1,710 6,000 FY 07: US$11,600 11,180 9,470 FY 08: US$1
Slide 20: Balance Sheet
Balance Sheet 30 Jun 07 31 Dec 06 US$mil Net book value of fixed assets 1 763.5 741.0 Gross borrowings 319.5 350.5 Cash 83.3 63.2 Net borrowings 236.2 287.3 Shareholder's equity 599.5 485.0 Net borrowings / Fixed assets 30.4% 38.1% Net borrowings / Shareholder's equity 39.4% 59.2% Note 1 Insured val
Slide 21: Cashflow
Cashflow US$m 1H07 1H06 Operating cash inflows 131.3 57.3 Investing cash outflows (24.1) (91.4) - Payments for property, plant and equipment (167.6) (97.5) - Sales of vessels 176.0 - - Purchase of shares of other listed shipping companies (37.8) - - Others 5.3 6.1 Financing cash outflows (87.2) (5.5
Slide 22: Dividend
Dividend Continue to payout at least 50% of annual attributable profits Actual payout ratio has consistently exceeded the stated policy Year Dividend US$mil HK ¢ per share Payout Ratio 2006 Interim (paid 7Sep06) 33.4 22.0 Final (paid 17Apr07) 45.1 22.5 Total for year 78.5 42.5 71% 1H07 Interim (ex d
Slide 23: New Developments & Outlook
New New Developments Developments & & Outlook Outlook Jiangmen Nanyang Shipyard – Hull 101
Slide 24: Other Operations in China
Other Operations in China First co-investment in a Chinese bulk cargo terminal - with Nanjing Port Group Pacific Basin holds 45% interest with equity commitment of US$16 million in 2007 China Coal Trade Joint ship owning venture Mil Tons agreed with the shipping arm of Export 80 Import China’s
Slide 25: Listed Shipping Investments
Listed Shipping Investments Q107 – Pacific Basin began investing a portion of cash reserves in a selection of other shipping equities Taking advantage of in house knowledge of the shipping market and excellent access to industry information flows Investments as of 30 June amounted to US$34.9 m
Slide 26: Earnings Coverage
Earnings Coverage Handysize Handymax Revenue Days 25,000 9% 21,920 days 20,040 days 20,000 Unfixed 17% Fixed 72% 15,000 10,000 4,590 days 5,000 83% 28% 2,420 days 95% US$20,000* US$18,710* US$23,700 US$21,000 31% 0 2007 2008 2007 2008 * includes an approximate US$1,000/day anticipated uplift from ef
Slide 27: Outlook
Outlook Interim dividend 2007: HK45¢ Handysize revenue days set to increase by 22% in 2007, and 9% in 2008 72% of 2008 handysize days uncovered; current spot market at almost US$32,500 per day net Record high vessel prices Active development of business model into complementary areas Ind
Slide 28: 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,
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