Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — FY2023 Earnings Presentation

45 slides from Pacific Basin Shipping's earnings presentation, Feb 29, 2024

1. Slide 1: Presentation of Annual Results 2023

   Pacific Basin PRESENTATION OF ANNUAL RESULTS 2023

2. Slide 2: Performance and Market Review

3. Slide 3: 2023 results highlights

   P&L US$million 2023 2022  Generated an underlying profit of US$119.2 million, a net profit of EBITDA 347.2 935.1 US$109.4 million and EBITDA of US$347.2 million respectively Underlying profit 119.2 714.7 Net profit 109.4 701.9  Net borrowings of US$38.9 million Balance Sheet  Return on equity 6%

4. Slide 4: Dividends and shareholder returns

   US$m  Third consecutive year the Board has returned dividends above 50% of annual net profits  Profits of US$1.55bn over six years, paid out over US$1.07bn in dividends to shareholders, or 69% of net profits  Our distribution policy is to pay out at least 50% of our annual net profit. Any additio

5. Slide 5: Handysize and Supramax market spot rates

   Handysize Market Spot Rates (BHSI) Supramax Market Spot Rates (BSI) 38k dwt (tonnage adjusted^) 58k dwt US$/day net* US$/day net* 18,000 18,000 16,000 16,000 FFA Average*: $14,630 14,000 FFA Average^*: 14,000 $13,200 $12,520 12,000 12,000 10,000 $9,820 10,000 8,000 8,000 6,000 6,000 4,000 4,000 2,00

6. Slide 6: Dry bulk trade loadings by commodity

   2016-2019 2020 2021 2022 2023 Mill tonnes annualised 1,900 700 1,600 2,400 650 1,500 1,800 2,200 600 1,700 1,400 2,000 550 1,600 1,300 1,800 500 1,500 1,600 1,200 450 1,400 1,400 400 1,100 1,300 1,200 350 1,000 1,200 Feb Aug Sep Oct Apr May Nov Dec Jul Jan Mar Jun Feb Apr Aug Sep Oct Nov Dec Feb Apr

7. Slide 7: Core business TCE earnings and cargo cover

   Handysize Core Business TCE US$/day net*  Our Core business Handysize and Supramax daily TCE earnings in 2023 were US$12,250 25,000 and US$13,830 net per day respectively, down 48% and 51% compared to stronger 2022 20,000 $17,310  Covered 100% of Handysize and Supramax vessel days in 1Q24 at US$11

8. Slide 8: Core business operating activity

   Core Business Operating Activity Handysize Performance vs Index (BHSI)* Supramax Performance vs Index (BSI)* Operating Activity Margin US$/day net US$/day net US$/Day (net) Relative Performance Scrubber contribution Relative Performance Rolling 12 Months Relative performance Rolling 12 Months Rollin

9. Slide 9: Handysize owned fleet cash breakeven

   FY22 FY23 Indicative Owned Fleet Cash Breakeven before G&A Opex US$/Day Depreciation Finance Cost Opex US$4,930/day 14,000 Finance Cost US$90 US$4,840 12,150 12,000 11,030  Benefitted from lower crew repatriation related 10,000 8,700 8,970 8,610 costs as pandemic restrictions eased – 230 8,130 8,00

10. Slide 10: Supramax owned fleet cash breakeven

    FY22 FY23 Indicative Owned Fleet Cash Breakeven before G&A Opex US$/Day Depreciation Finance Cost Opex US$5,090/day 20,000 Finance Cost US$180 US$4,910 18,150 18,000 16,590 16,000 14,000  Increased depreciation relates to higher dry 12,000 docking costs and investments in fuel-efficiency 9,660 10,1

11. Slide 11: Fleet acquisitions and secondhand vessel prices

    Global Ultramax and Handysize Newbuild and 10-Year-Old Secondhand Vessel US$m 40.0 Ultramax Newbuild (61-64.5K) Ultramax Secondhand 10YO (61K ECO) Vessel Year Delivery/ Handysize Newbuild (38-42K) Handysize Secondhand 10YO (37K ECO) DWT MOA Type Built Expected Delivery 35.0 33.25 Ultramax 61,181 201

12. Slide 12: Growth and fleet renewal

    Million dwt 6.0 5.2 HS 5.0 UM No. of 40K dwt Handysize No. of 40K dwt Handysize No. of 64K dwt Ultramax 4.0 Newbuilding (no scrubber) Newbuilding (50% scrubber) Newbuilding Growth and Renewal: 3.0  Long-term inward charter of both Handysize and Supramax vessels – with options to extend the charter

13. Slide 13: Financial Review

14. Slide 14: Income statement

    US$million 2023 2022 Revenue 2,296.6 3,281.6 Owned vessel costs Voyage expenses (1,015.1) (1,064.9) 2023 2022 Opex (210.1) (223.5) Time-charter equivalent ("TCE") earnings 1,281.5 2,216.7 Depreciation (150.5) (140.6) Finance (5.4) (12.0) Owned vessel costs (366.0) (376.1) Chartered vessel costs (720

15. Slide 15: Cash flow and liquidity

    US$ Million 1 2 3 4 5 6 1,200 +150 1 Operating cash inflow was US$285.9 million, inclusive of all long and short-term charter hire payments 1,000 +92 2 Proceeds from the sale of 8 smaller Handysize, 1 Supramax and 1 Ultramax +286  New US$150.0 million syndicated 3-year sustainability-linked -252

16. Slide 16: Balance sheet and capital allocation

    US$million FY23 FY22  Significant shareholder distribution, while also investing in the PP&E 1,796.7 1,772.2 purchase of second-hand vessels and further debt repayments, resulting in net debt of US$38.9 million Total assets 2,432.5 2,648.7  As at 31 December 2023, we had 61 unmortgaged vessels  W

17. Slide 17: Demand and Supply Outlook

18. Slide 18: 2024 dry bulk trade volume forecast

    2024F Dry Bulk Trade Volumes YOY Million Tonnes Coal -0.8% 1,297 Iron Ore -0.5% 1,541  2024 minor bulk seaborne demand forecast up 3.1%, supported by potential Total (Iron Ore + Coal) -0.7% 2,838 global macroeconomic improvements and expected ongoing Chinese government policy support through invest

19. Slide 19: Orderbook deliveries

    Handysize and Supramax/Ultramax Orderbook Deliveries % of Total Fleet (dwt)  Dry bulk orderbook approximately 8.5% Handysize Supramax/Ultramax 5.0%  In comparison to 2022, newbuild ordering of Handysize and Supramax vessels decreased approximately 22% in 2023 4.2%  New vessel ordering is expected

20. Slide 20: Dry bulk supply development

    Handysize / Supramax Supply Development Overall Dry Bulk Supply Development % of Total Fleet % of Total Fleet  Estimated dry bulk net fleet growth of 2.7% in 2024 5% 5% and 1.7% in 2025 4% 3.4% 3.7% 4% 3.6%  Forecast scrapping of 0.7% and 1.3% for total dry 3.2% bulk fleet, and 0.8% and 1.5% for H

21. Slide 21: Panama and Suez canal disruptions

    Bulkcarrier Panama Canal Transits (7D Moving Average) Suez Canal Transits (7D Moving Average) DWT m No. of vessel DWT m 14 Dec – near-miss incident involving 0.7 12 2.5 a Maersk vessel resulting in pause of their vessels through Red Sea 0.6 10 2.0 Last 7 days vs 0.5 1st Week of Dec 23 8 0.4 1.5 86%

22. Slide 22: Carbon intensity targets and regulation

    Carbon Intensity (EEOI) 15 Grams of CO 2 per tonne-mile  Targeting net zero emissions by 2050 PB targets -50% carbon intensity by 2030 on the  We aim to reduce our EEOI carbon intensity by 50% by 2030 10 way to net zero by 2050 8.49  We target for our fleet to comprise only low-emission vessels b

23. Slide 23: Strategy Focus and Market Outlook

24. Slide 24: Strategic priorities

     Maintain and grow our position as the leading minor bulk owner  Support our teams to ensure we continue to deliver a quality and operator service to our customers while maximising our earnings  Continue our long-term Supramax fleet growth and Handysize  Ensure our crews’ physical and mental wel

25. Slide 25: Market outlook and demand drivers

     IMF forecast global GDP growth of 3.1% and 3.2% in 2024 and 2025  Significant global infrastructure spend required to drive development respectively and “green transition”  China focused on economic policy to support domestic property  Global population growth to increase demand for food and se

26. Slide 26: Investor relations resources

     Annual and Interim Reports  Quarterly Trading Updates  Presentations and press releases on business activities  Analysts Day & Investor Perception Study  Sell-side conferences  Investor/analyst calls and enquiries  Corporate Information  CG, Risk Management and CSR  Fleet Profile and Downl

27. Slide 27: Appendix

28. Slide 28: Global economic growth forecasts

    2023 5.0% 5.2% 2024 2025 2023 2024 2025 4.2% 4.6% 4.1% 2023 2024 2025 2023 2024 2025 3.0% 3.1% 2.9% 3.1% 3.2% 2.5% 2.1% 2.1% 1.5% 1.7% 1.7% 1.2% 0.7% 0.5% 0.9% Oct Jan Oct Jan Jan Oct Jan Oct Jan Jan Oct Jan Oct Jan Jan Oct Jan Oct Jan Jan 23 24 23 24 24 23 24 23 24 24 23 24 23 24 24 23 24 23 24 24

29. Slide 29: China dry bulk seaborne imports

    Growth in China Dry Bulk Quarterly Seaborne Imports YoY YoY% Change  Ongoing Chinese government policy support expected to increase +90% dry bulk demand in 2024 through investments in infrastructure, industrial construction, energy and utilities construction and green +80% +78% transition initiativ

30. Slide 30: Scrapping trend

    Scrapping Trend % of Fleet 3.5%  Average age of Handysize and Supramax vessels scrapped between 2019 and 2023 is about 28 years 3.0%  Handysize and Supramax fleet over 25 years old approximately 8% and 4% respectively – scrapping pool continues to increase 2.5%  A total of 5.4m dwt scrapped in 20

31. Slide 31: Fleet size and orderbook by vessel segment

    9.6% 13 14% 0.4% (10,000–40,000 dwt) (40,000–70,000 dwt) 9.3% 12 11% 0.7% (70,000–100,000 dwt) 11.7% 12 12% 0.9% (100,000+ dwt) 5.7% 11 3% 0.3% 8.5% 12 8% 0.6% Source: Clarksons Research, data as at February 2024 ^ Data as at 26 February 2024

32. Slide 32: New IMO goals

    New IMO Goals (since July 2023) July 2023, IMO adopted a revised and 0% more ambitious GHG Strategy IMO Total Emissions: -10% -20% 1. Net Zero by about 2050 2. Reduce CO2 intensity by 40% by 2030, compared to 2008 -20% IMO Carbon Intensity: 3. Reduce total GHG emissions by 20-30% by 2030 and by -40%

33. Slide 33: Pacific Basin at a glance

     We operate one of the world’s largest fleets of interchangeable modern Handysize and Supramax vessels, equipping us for efficient trading and reliable service any time and anywhere  Cargo system business model – outperforming market rates  Our Core fleet consists of 132 Handysize and Supramax ve

34. Slide 34: Our focus

    Tankers for oil, gas & chemicals The dry bulk industry carries dry commodities and other non- containerised cargo. Larger vessels including Capesize and Panamax carry mainly iron ore, coal and grain. We specialise in the versatile, mid-size, geared Handysize and Supramax vessels that carry a wide ra

35. Slide 35: Why Handysize and Supramax

     More diverse customer, cargo and geographical exposure enables high utilisation  A segment where scale and operational expertise make a difference 44  Better daily TCE earnings driven by a high laden-to- ballast ratio  Sound long-term demand expectations and modest fleet growth

36. Slide 36: Vessels in operation

    116 Vessels 17 LT 133 133ST 266 Total Total owned Chartered Chartered Vessels in Operation Total Average Capacity Age Long-term Short-term Owned1 Chartered Sub-total Chartered2 Total (million dwt) Costs Owned Owned fluctuate with Substantially fixed costs market Handysize 65 10 75 46 121 2.3 13 Supr

37. Slide 37: Global offices

    11 commercial offices 4 technical & crewing offices Our Hong Kong headquarters is home to executive management, commercial, technical, crewing and all central functions

38. Slide 38: Cargo mix

    Minerals 11% Agricultural Products & Related 30% Salt 6% - 11% Grains & Agricultural Products 16% +1pp Sand & Gypsum 4% - Fertiliser 11% -1pp Soda Ash 1% - 11% 30% Sugar 3% - 15% 30% Energy 15% 13% Coal 9% +1pp Petcoke 5% +1pp Construction Materials 28% Wood Pellets 1% - 16% Cement & Cement Clinkers

39. Slide 39: Core business and operating activity

     Contract and spot cargoes  Spot cargoes  Owned and long-term chartered vessels /  Short-term vessels carrying spot cargoes Short-term vessels carrying contract cargoes  Costs largely fixed and disclosed  Costs fluctuate with freight market  Key KPI = TCE per day  Key KPI = Margin per day 

40. Slide 40: Core business and operating activity explained

    Our “Core business” is to optimally combine our owned and long-term chartered vessels with multi-shipment contract cargos and spot cargoes to achieve the highest daily TCE earnings. Our Core business also uses short-term chartered vessels to carry contract cargoes to maximise the utilisation and TCE

41. Slide 41: Earnings sensitivity and breakeven

    Core TCE1 x owned & LTC2 revenue days + Blended cost x owned & LTC cost days3 - = X Core TCE1 x owned & LTC2 revenue days + Blended cost x owned & LTC cost days3 - = X Operating margin x operating days X X - X = X Sensitivity: +/- US$1,000 daily TCE = US$35-40 million per year Adjusted for ca. 20-25

42. Slide 42: Cargo cover for 2024

    Handysize Supramax US$/Day (net) US$/Day (net) $13,680 $13,310 $13,480* 14,000 $13,460 14,000  We have covered 100% and 100% of our Handysize and $12,490 $12,610* 12,000 Supramax vessel days for the first quarter of 2024 at 12,000 $11,170* US$11,170 and US$13,480 per day net respectively $10,160* 1

43. Slide 43: Vessel days and charter costs

    Handysize Supramax Handysize Supramax Days FY2022 FY2023 FY2022 FY2023 Average cost Average cost Year Vessel days (US$) Vessel days (US$) Core business revenue days 30,310 28,420 17,340 20,230 2024 3,890 12,370 1,330 16,770 – Owned revenue days 26,680 24,960 14,930 17,070 2025 2,930 13,080 610 14,83

44. Slide 44: EEXI, CII and EU ETS

     From January 2023, IMO’s global EEXI and CII regulations require vessels to combine technical and operational measures to improve their carbon intensity  Shipping included in European Union Emissions Trading System (EU ETS) from January 2024  Technical design criteria  Some impact on PB vessels

45. Slide 45: Scrubber investment recovery

     Fully recovered the approximately US$62 million scrubber investment made prior to the implementation of the IMO 2020 sulphur cap  As at September 2022 this investment is fully recovered considerably faster than expected through the savings achieved by using HSFO  Elevated oil prices and resultan

Pacific Basin Shipping — FY2023 Earnings Presentation on 6ix