Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Q3 FY2020 Earnings Presentation
43 slides from Great Eastern Shipping's earnings presentation, Feb 14, 2020
Slide 1: Business Overview
BUSINESS OVERVIEW 14 February 2020
Slide 2: Company’s
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 directions, prospects and f
Slide 3: Corporate Profile
CORPORATE PROFILE Offshore Shipping (Bulk) (Through wholly-owned subsidiary Greatship (India) Limited) Tankers • Crude Dry Bulk Logistics Drilling • Products/LPG India’s largest private sector shipping company over 71 years of experience 3
Slide 4: Shareholding Pattern
FII/FPI 23% Promoters 28.5% Govt./FI SHAREHOLDING 23.5% PATTERN Public 18% Shareholding Pattern as on 31 December 2020 4
Slide 5: Fleet Profile
SHIPPING FLEET Fleet DWT Number of Ships Average Age (Yrs.) PROFILE Crude Carriers 1,461,591 11 13.86 Product Carriers 987,207 17 12.31 Gas Carriers 224,113 5 18.43 Dry Bulk Carriers 1,026,462 13 7.32 Total 3,699,373 46 11.94 OFFSHORE Fleet Number of Units Average Age (Yrs.) Jack Up Rigs 4 8.35 Plat
Slide 6: Business Philosophy
BUSINESS PHILOSOPHY
Slide 7: 4 Keys to Our Success
4 KEYS TO OUR SUCCESS In-House Dynamically Strong Diversified technical & managing balance Fleet commercial cycles sheet management 7
Slide 8: Net Debt/Equity & Total Capital Employed (Consolidated)
NET DEBT/EQUITY & TOTAL CAPITAL EMPLOYED (CONSOLIDATED) USD Mn 3,000 0.80 0.70 2,500 0.60 2,000 0.50 1,500 0.40 0.30 1,000 0.20 500 0.10 - 0.00 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY
Slide 9: Dividend/Share (30+ Years Continuous Dividend)
- 2.00 4.00 6.00 8.00 16.00 10.00 12.00 14.00 INR/Share FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 DIVIDEND/SHARE FY2003 FY2004 Dividend/Share FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Dividend Yield (RHS) FY2012 FY2013 FY2014 FY2015 FY2016 (30+ YEARS CONTINUOUS DIV
Slide 10: ROE & ROCE (Consolidated)
ROE & ROCE (CONSOLIDATED) 45% 40% Average ROCE: 12% 35% Average ROE: 18% 30% 25% 20% 15% 10% 5% 0% ROCE (Consolidated) ROE (Consolidated) Average ROCE Average ROE 10
Slide 11: BWTS & Scrubber Installation Schedule
BWTS & SCRUBBER INSTALLATION SCHEDULE 40 35 35 30 No. of Vessels 25 20 15 12 9 9 10 7 7 5 5 5 2 0 Installed To be Installed CY2020 CY2021 CY2022 CY2023+ BWTS Scrubber • Total 9 Vessels have been fitted with BWTS and 35 vessels are scheduled to be installed with BWTS • 2 Vessels have been fitted with
Slide 12: Shipping Market
SHIPPING MARKET
Slide 13: IMO Regulations on Ballast Water Treatment System
IMO REGULATIONS ON BALLAST WATER TREATMENT SYTEM What is Ballast Water Treatment System(BWTS) IMO regulations? 1. Ballast water has to be taken onboard by ships for stability and can contain thousands of aquatic or marine microbes, plants and animals, which are then carried across the globe. Untreat
Slide 14: IMO 2020
IMO 2020 What is IMO 2020? 1) The International Maritime Organization (IMO) will require shipowners to reduce sulfur emissions from 3.5% currently to 0.5% starting 1st January, 2020. 2) There are two options for shipowners to comply with IMO 2020 sulfur regulations: • Installing a scrubber to enable
Slide 15: IMO 2020
IMO 2020 Type of Fuel Sulfur Content Composition 2020 Possible issues post 2020 Low Availability, Fuel oil from Scrubber HSFO 3.5% refinery Installed Vessels Higher CAPEX for scrubbers Allowed Diesel from the MGO 0.1% refinery including ECA Expensive Areas Blends HSFO with a straight Allowed in Non-
Slide 16: Key Points on Tanker Market
KEY POINTS ON TANKER MARKET Asset •VLCC 5 yr old asset prices increased about 15% Y-O-Y Q4CY19* Prices •Suezmax 5 yr old asset prices increased about 15% Y-O-Y Q4CY19* Freight •BCTI averaged 60% over Q3CY19 & BDTI averaged 90% over Q3CY19 during Q4CY19 Rates •U. S. production is up about 1.2 million
Slide 17: Tankers – Asset Price Movement
TANKERS – ASSET PRICE MOVEMENT (5-YEAR OLD) VLCC Suezmax Aframax VLCC Suezmax Aframax 180 80 160 70 Ship Price (in million $) Ship Price (in million $) 140 60 120 50 100 80 40 60 30 40 20 20 10 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2018 2018 2018 2019 2019 2019 2019 Wet Bulk asset prices has improved by
Slide 18: Baltic Dirty & Clean Index
1,100 1,300 1,500 1,700 1,900 2,100 300 700 900 500 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Source – Industry Reports Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 BALTIC DIRTY TANKER INDEX Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 1,000 1,100 300 400 500 700 800 900 600 Feb-15 Ma
Slide 19: Total Oil Supply & Demand
TOTAL OIL SUPPLY & DEMAND Supply Demand Refinery Throughput (RHS) 103 87 million barrels per day million barrels per day 101 85 99 97 83 95 81 93 91 79 89 77 87 85 75 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019 2018 2018 2018 2018 2019 2019 2019 2019 In Q4CY19 Y-O-Y, refinery throughput growth
Slide 20: Oil Products & Residual Fuel Demand Growth
OIL PRODUCTS & RESIDUAL FUEL DEMAND GROWTH • In Q4CY2019, Core refined products demand growth was positive by approx. 0.6 Mn barrels a day largely due to demand growth in middle distillates. • In Q4CY2019, Residual fuel demand growth was negative by approx. 0.5 Mn barrels a day. 5 20 Source – Indust
Slide 21: Refinery Margins
REFINERY MARGINS Refining Margins in Asia and Europe were negatively impacted due to sharp collapse in fuel oil cracks and new refining capacity additions. whereas in US it was stable. 251 Source – Industry Reports
Slide 22: Crude Oil Imports (US & China)
CRUDE OIL IMPORTS (US & China) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 9,000 12,500 8,500 China Crude Oil total Imports (‘000 bpd) US Crude Oil total Imports (‘000 bpd) 11,500 10,500 8,000 9,500 8,500 7,500 7,500 7,000 6,500 5,500 6,500 4,500 6,000 3,500 Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 23: Crude Oil Exports (US)
CRUDE OIL EXPORTS (US) 2019 2018 2017 2016 2015 US Crude Oil total Exports (‘000 bpd) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct* Nov Dec In CY2019, US exported 45% higher crude oil than CY2018 23
Slide 24: US LPG Exports of Propane, Propylene, Butane & Iso Butane
US LPG EXPORTS OF PROPANE, PROPYLENE, BUTANE & ISO BUTANE 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% -20% US LPG Exports of Propane & Propylene (y-o-y growth in %) US LPG Exports of Butane & Iso Butane (y-o-y growth in %) US VLGC exports grew by 22% in Q4CY2019 Y-O-Y 24
Slide 25: World Fleet Growth Crude Tankers
WORLD FLEET GROWTH CRUDE TANKERS Tanker Fleet - mn Dwt 22-Jan-20 1-Jan-20 1-Jan-19 1-Jan-18 1-Jan-17 VLCC 248.20 247.33 227.42 225.10 213.80 Suezmax 85.20 85.00 81.86 80.60 74.60 Aframax 70.50 70.13 67.07 67.20 66.40 Total (80k+)* 409.53 408.06 381.69 378.90 355.00 *Includes panamax crude tankers Or
Slide 26: World Fleet Growth Product Tankers & VLGC
WORLD FLEET GROWTH PRODUCT TANKERS & VLGC Product Fleet - mn Dwt 22-Jan-20 1-Jan-20 1-Jan-19 1-Jan-18 LR2 40.90 40.7 37.9 36.60 LR1 28.10 27.9 26.9 26.51 MR/Handy (35k+) 87.20 86.8 83.3 82.40 Total (35k+)* 159.51 158.65 150.93 147.61 *Suezmax Product Tankers included Order Book(mn Dwt) 2020 2021 202
Slide 27: Key Points on Dry Bulk Markets
KEY POINTS ON DRY BULK MARKETS Asset • Capesize 5 yr old asset prices were down 20% in Q4CY2019 Y-O-Y Prices • Panamax & Supramax 5 yr old asset prices were flat to marginally up in Q4CY2019 Y-O-Y Freight • BDI hits 411 on 10-Feb-20, 80% down from multi year high of 2,518 on 04-Sep-19 Rates • In Q4C
Slide 28: Bulker Asset Prices
BULKER ASSET PRICES 5-YEAR OLD Capesize Panamax Supramax Capesize Panamax Supramax 180 40 160 35 Ship Price (in million $) Ship Price (in million $) 140 30 120 25 100 80 20 60 15 40 10 20 5 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2018 2018 2018 2019 2019 2019 2019 Capesize asset prices were down 20% in Q4C
Slide 29: Baltic Dry Index
BALTIC DRY INDEX 2,650 80% fall 2,450 from the 2,250 Vale’s Dam peak 2,050 Incident 1,850 1,650 1,450 1,250 1,050 850 650 450 250 Aug-16 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 May-18 Feb-20 Feb-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Baltic Dry Index hit mu
Slide 30: China Iron Ore & Steel Production
CHINA IRON ORE & STEEL PRODUCTION World Steel China Steel % Growth World % Growth China 2000 15% Steel Production (in Million tonnes) 1500 10% 1000 5% China Steel Production increased 7% in CY2019 500 0% Y-O-Y 0 -5% 2013 2014 2015 2016 2017 2018 2019 China Iron Ore Imports % Change Y-o-Y 1200 16.0%
Slide 31: China Coal Imports
5.0 10.0 15.0 -15.0 -10.0 -5.0 0.0 Mn Tonnes Jan-17 Feb-17 Mar-17 Apr-17 May-17 Source – Industry Reports Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 CHINA COAL IMPORTS May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 China coal imports change (Y-O-Y) F
Slide 32: World Fleet Growth Dry Bulk
WORLD FLEET GROWTH DRY BULK Fleet - Mn Dwt 22-Jan-20 1-Jan-20 1-Jan-19 1-Jan-18 Capesize 350 348 335 324 Panamax 218 218 207 202 Handymax 209 208 201 196 Handysize 105 100 98 96 Total 882 875 841 818 Orderbook 2019 2020 2021 2022+ Total (mn Dwt) Orderbook 5.8% 3.0% 0.5% 0.0% 9.3% (%Fleet) Slippage A
Slide 33: Scrapping
SCRAPPING Fleet Vessel (mn Dwt) Scrapping (% of beginning world fleet) Category 22 Jan 20 2019 2018 2017 2016 2015 2014 Crude 409.53 0.61% 4.62% 2.35% 0.35% 0.23% 1.60% Product 159.51 0.43% 1.64% 1.42% 0.62% 0.61% 1.19% Dry Bulk 882.10 0.92% 0.54% 1.77% 3.67% 4.03% 2.25% Scrapping was low for all th
Slide 34: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary)
Slide 35: Offshore Business Fleet Profile
OFFSHORE BUSINESS FLEET PROFILE Fleet Utilization Current Owned Fleet Extent of coverage of Fleet Count Category fleet's operating Type days (FY20) Jack Up Rigs (350ft) 4 PSV 93% Platform Supply Vessels (PSV) 4 Anchor Handling Tug cum ROVSV 100% 8 Supply Vessels (AHTSV) AHTSV 96% Multipurpose Platfo
Slide 36: Key Points on E&P Markets
KEY POINTS ON E&P MARKETS CY2019 • Charter rates and utilization have started to pickup form the lows in many Day Rates geographies. We have seen this impact in Indian market as well. • Rigs: Total fleet remains broadly same compared to last quarter and over Fleet one year. Growth • OSV’s: Total fle
Slide 37: Offshore E&P Spending
OFFSHORE E&P SPENDING The E&P spending after declining marginally in 2018 is expected to remain flattish in 2019. Source – Industry Reports 37
Slide 38: Global Fleet Supply Offshore
GLOBAL FLEET SUPPLY OFFSHORE Fleet & Orderbook Number Jackup Rigs AHTSVs PSV Current Fleet 525 1997 1615 Orderbook 49 68 115 O/B to current fleet 9.33% 3.41% 7.12% • CY2019 actual deliveries have been far lower than scheduled. Due to bleak employment scenario owners have refrained from taking delive
Slide 39: Financial Results Q3 FY 2019-20
FINANCIAL RESULTS Q3 FY 2019-20 39
Slide 40: Financial Highlights
FINANCIAL HIGHLIGHTS GE Shipping Q3FY20 consolidated Net Profit at Rs. 330.71 Crores Standalone Key Figures Consolidated Q3FY20 Q3FY19 9M’FY20 (Amount in Rs. Crs) Q3FY20 Q3FY19 9M’FY20 Income Statement 941.88 749.39 2252.23 Revenue (including other income) 1170.83 1036.47 2897.68 536.08 496.50 920.9
Slide 41: Financial Highlights
FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated Q3FY20 Q3FY19 9M’FY20 Q3FY20 Q3FY19 9M’FY20 Key financial figures 56.92% 66.25% 40.89% EBITDA Margin 54.48% 65.14% 42.12% 20.64% 6.84% 4.28% *#Return on Equity (ROE) 15.43% 4.63% 3.02% 15.34% 7.53% 6.01% *#Return on Capital Employed (ROCE) 12.
Slide 42: Financial Highlights
FINANCIAL HIGHLIGHTS Breakup of Revenue Days Revenue Days Q3 FY20 Q3 FY19 Owned Tonnage 4,227 4,210 Inchartered Tonnage - 16 Total Revenue Days 4,227 4,226 Total Owned Tonnage (mn.dwt) 3.70 3.90 Average TCY Details Mix of Spot & Time Average (TCY $ per day) Q3’FY20 Q3’FY19 % Change Days (in %) Q3’FY
Slide 43: Thank You
THANK YOU THANK YOU visit us at www.greatship.com 43
The Great Eastern Shipping — Q3 FY2020 Earnings Presentation on 6ix