Slide 1: Q311 Trading Update
Q311 Trading Update 27 Oct 2011
Slide 2: Pacific Basin Overview
Pacific Basin Overview A world leading dry bulk owner/operator of handysize & handymax vessels Highly flexible Pacific Basin Dry Bulk business model Large fleet of uniform, interchangeable, modern vessels Mix of owned, long-term and short-term chartered ships Diversified customer base of m
Slide 3: 2011 Third Quarter Highlights
2011 Third Quarter Highlights PB Dry Bulk Handysize and Handymax freight rates have increased 12% and 22% respectively since 30 June marking an earlier, stronger than anticipated improvement BDI increased 52% since mid-year driven by a 147% increase in Capesize rates mainly attributable to: A
Slide 4: Dry Bulk Market Information
Dry Bulk Market Information Handysize (BHSI) and Handymax (BSI) Secondhand Handysize Vessel Values versus Capesize (BCI) Spot Rates (5 year Old 28,000 Dwt) Handysize Average: US$10,171 US$10,897 US$9,548 US$m Capesize Average: US$7,971 US$8,274 US$16,281 55 24 Oct 2011 US$/day (net) 1Q11 2Q11 3Q11 5
Slide 5: Chinese Dry Bulk Trade - Minor Bulk
Chinese Dry Bulk Trade - Minor Bulk China Imports (m tonnes): i) Forestry Products ii) Manganese Ore iii) Copper Concentrates & Concentrates 38.1 Chinese Dry Bulk Trade Volume 13.2 6.5 m tonnes 28.9 11.6 6.1 1,200 +11% -4% 28% +39% 26% 26% 900 600 14% 11% 06 07 08 09 10 11E 06 07 08 09 10 11E 06 07
Slide 6: Dry Bulk Demand
Dry Bulk Demand Dry Bulk Fleet Effective Demand % change YOY 24.2 % Change 25 YOY 20 14.4 15 13.8 14.0 13.0 15 9.4 10.7 7.9 9.3 12 10 5.6 7.5 5.5 9 5 0 6 6.1 -5 - 0.3 3 4.3 3.8 -10 - 5.9 - 8.3 1.4 -15 - 10.5 0 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q -3 2008 2009 2010 2011E 2005 2006 2007 2008 2009
Slide 7: Dry Bulk Fleet Changes
Dry Bulk Fleet Changes Handysize Age Profile (25,000-39,999 dwt) Dry bulk capacity expanded 14% YOY net 2,035 vessels (64.8m dwt) Handysize expanded only 1% net in the third quarter 30+ years 35% of handysize fleet is over 25 years old 9% High scrap price supports healthy scrapping 0-15 year
Slide 8: Dry Bulk Orderbook
Dry Bulk Orderbook Handysize Scheduled Orderbook 583vessels (20m dwt) m dwt 12 19% 137m dwt* new dry bulk capacity scheduled to deliver in 10 15% FY 2011 8 12% Ship owners ordered 66% less newbuilding capacity 10% 6 YOY due to weak market conditions 4 4% We expect approx. 30% slippage in FY 20
Slide 9: Pacific Basin Dry Bulk Earnings Coverage
Pacific Basin Dry Bulk Earnings Coverage As at 24Oct 2011 Pacific Basin Dry Bulk Fleet: 172 Combined coverage: 2011: 95% at 24 October 2011 2012: 37% Owned Chartered Total Handysize Handymax on the on the NB NB water water 31,370 days Handysize 30 7 73 9 119 29,070 days 12,310 days Handymax 3 6 39 3
Slide 10: Pacific Basin Dry Bulk - Outlook
Pacific Basin Dry Bulk - Outlook China’s continued dependence on imported Continued excessive newbuiding deliveries minor bulks Faltering global economic recovery and Slow steaming because of high fuel prices stimulus withdrawal and weak market Less imports due to China tightening policy
Slide 11: PB Energy & Infrastructure Services
PB Energy & Infrastructure Services 3Q11 Performance Towage Fleet: 43 vessels (as at 24 October 2011) The market for both offshore and harbour towage services continued its significant improvement in the 3Q Further improved rates and trading conditions for PB Towage’s Australasia-focused busines
Slide 12: PB Energy & Infrastructure Outlook
PB Energy & Infrastructure Outlook High oil prices buoying demand for new, Faltering global economic recovery cleaner, safer fuel sources Australian commodity exports and port Australia striving to become a major LNG activity affected by tightening policy in exporter China Continued commod
Slide 13: PB RoRo
PB RoRo 3Q11 Performance: 4 out of 5 delivered vessels are employed, our final newbuilding is scheduled to deliver in Nov 2011 Nafta Gulf Bridge service has been suspended due to unsatisfactory demand, but our 2 ships previously employed in that trade have been redeployed in the US Gulf at low r
Slide 14: PB RoRo Outlook
PB RoRo Outlook Slow growth in European exports and Significant new RoRo deliveries scheduled in intra-European trade overall rest of year Gradual, slow growth in trailer volumes Most European RoRo operators still have excess capacity and are not chartering new Scrapping vessels High fue
Slide 15: Outlook
Outlook We expect: A sustained dry bulk demand, high scrapping levels and reduced newbuilding deliveries will support a continued relatively healthy supply/demand balance for minor bulk segments in 2012 overall This balance could weaken if global economic growth slows further We see evidence
Slide 16: Capex and Combined Value by Vessel Types
Capex and Combined Value by Vessel Types As at 30 June 2011 Vessels Commitments A Combined View of (including authorised commitments) Vessel Carrying Values and Commitments Total US$348m Total US$1,890m 160 140 US$ m 140 1,400 118 1,240 120 1,200 100 39 314 1,000 80 70 115 89 800 60 34 600 429 34 40
Slide 17: Borrowing and Capex
Borrowing and Capex As at 30 June 2011 Funded from US$631m cash, new borrowings, and US$ m future operating cashflows 250 230 200 Redeemable in Apr 2014 150 140 135 118 100 76 70 69 54 55 60 37 50 27 36 18 20 20 29 17 8 8 0 2011 2012 2013 2014 2015 2016 2017 2018-2021 Vessel capital commitments (US$
Slide 18: Cash Flow
Cash Flow US$m 1H11 1H10 Operating cash inflows 69 83 Investing cash outflows (33) (142) Vessels & other fixed assets related payments (111) (187) Jointly controlled entities related receipts and payment 9 (13) Disposal of our remaining holdings in GDG 81 - Change in restricted cash, structu
Slide 19: 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,
Slide 20: Differentiated from BDI & Traditional Ship Owning
Appendix: Differentiated from BDI & Traditional Ship Owning Smaller bulk carrier segment benefits from: Handysize orderbook smaller than ship capacity over 25 years old Diverse range of commodities carried and trade patterns Greater access to ports Growing minor bulk trade imbalances Fleet U
Slide 21: Pacific Basin Dry Bulk – Diversified Cargo
Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Dry Bulk Cargo Volume 1Q - 3Q 2011 Sugar Logs & Forest 13% 4% Products Concentrates 6% Grains & Agriculture 15% Ore Products 5% Other Bulks 8% Coal/Coke 8% 26.7 Cement & Salt 6% m tonnes 9% Cement Clinker Steel & 4% Scrap Fertilisers
Slide 22: China at late-Industrialisation Stage
Appendix: China at late-Industrialisation Stage Steel Consumption Per Capita Tons per Capita 1.0 China growth matches historical trend in Japan and Korea 0.9 Suggests strong growth in dry bulk 0.8 segment to remain for medium term 0.7 Similar trend for electricity and cement 0.6 0.5 0.4 0.3 0.
Slide 23: China Iron Ore & Coal Demand
Appendix: China Iron Ore & Coal Demand China is a net importer of coal in 2011 China Iron Ore Sourcing for Steel Production m Tonnes m Tonnes 1,200 13% 1,130 200 1,000 166 1,002 157 150 800 9% 672 619 600 100 458 400 383 50 19 16 200 0 0 2004 2005 2006 2007 2008 2009 2010 2011E -50 (Aug11 2006 2007
Slide 24: 2011 Interim Financial Highlights
Appendix: 2011 Interim Financial Highlights 1H11 1H10 Segment net profit 28.8 81.1 Treasury (5.8) (11.8) Non direct G&A (4.2) (3.7) Underlying profit 18.8 65.6 Unrealised derivative income / (expenses) 8.4 (13.7) Gain from sale of shares in Green Dragon Gas 55.8 - Vessel impairment charges
Slide 25: Pacific Basin Dry Bulk - Handysize
Appendix: Pacific Basin Dry Bulk - Handysize 1H11 1H10 Change Revenue days (days) 14,620 13,940 +5% TCE earnings (US$/day) 13,660 16,840 -19% Owned + chartered cost (US$/day) 10,640 11,750 -9% Segment net profit (US$m) 42.9 69.7 -38% Return on net assets (%) 13% 26% -13% Earnings: 1H11 TCE rates r
Slide 26: Pacific Basin Dry Bulk - Handymax
Appendix: Pacific Basin Dry Bulk - Handymax 1H11 1H10 Change Revenue days (days) 6,390 5,570 +15% TCE earnings (US$/day) 15,130 23,680 -36% Owned + chartered cost (US$/day) 16,190 22,050 -27% Segment net (loss)/profits (US$m) (7.5) 8.8 -185% Return on net assets (%) -19% 32% -51% Earnings: 1H11 TC
Slide 27: Daily Vessel Costs - Handysize
Appendix: Daily Vessel Costs - Handysize Direct overhead Charter-hire Owned Chartered Finance cost As at 30 June 2011 Depreciation Opex Blended US$10,640 (FY10: US$11,970) Charter-hire rates & days 2011-2013 US$/day 16,000 14,700 14,000 500 12,580 12,000 550 $11,690 $11,350 $11,400 10,000 8,690 8,69
Slide 28: Balance Sheet
Appendix: Balance Sheet PB PB PB US$m Treasury 30 Jun 11 31 Dec 10 Dry Bulk EIS RoRo Vessels & other fixed assets 926 221 395 - 1,549 1,519 Total assets 1,096 287 408 654 2,524 2,555 Long term borrowings 177 38 56 574 845 860 Total liabilities 306 53 60 576 1,014 1,011 Net assets 790 234 348 78 1,51
Slide 29: Impact of Financial Instruments
Appendix: Impact of Financial Instruments US$m Realised Unrealised 1H11 1H10 Net Gains / (Losses) Forward freight agreements (0.7) 0.9 0.2 (5.8) Bunker swap contracts 6.7 7.9 14.6 (8.4) Interest rate swap contracts (2.8) (0.4) (3.2) (4.2) 3.2 8.4 11.6 (18.4) Contracts to be settled in future perio
Slide 30: Convertible Bonds Due 2016
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 HK$7.79 (Curren