D'amico International Shipping S.a. · MIL:DIS
D'amico International Shipping — Q1 2020 Earnings Presentation
44 slides from D'amico International Shipping's earnings presentation, May 7, 2020
Slide 1: Q1 2020 Presentation
Q1 2020 Presentation d’Amico International Shipping May 7, 2020
Slide 2: Disclaimer
DISCLAIMER. There shall be no offering or sale of any securities of d’Amico International Shipping S.A. in the United States of America, Switzerland, Canada, Australia, Japan, the United Kingdom or any jurisdiction in which such offer, solicitation or sale would be unlawful prior to its registration
Slide 3: Agenda
AGENDA. ▪ Executive summary ▪ DIS’ overview and key financials ▪ Market overview ▪ Why invest in DIS ▪ Appendix
Slide 4: Executive summary
Executive summary. • Net result – DIS posted a profit of US$ 1.5m in Q1’20 vs. US$ (5.5)m in Q1’19 and Adjusted net result (excluding non- recurring/non-cash items from both periods) of US$ 6.3m in Q1’20 vs. US$ (4.4)m in Q1’19. Therefore, excluding such non-recurring effects, DIS’ Q1’20 Net result
Slide 5: Executive summary (continued)
Executive summary (continued). • Market update (continued) – In early March, however, OPEC+ members failed to strike an agreement on production cuts to offset falling oil prices caused by the outbreak of the virus. OPEC+ countries started pumping oil at free will, leading to a price war between Saud
Slide 6: DIS' Overview and Key Financials
DIS’ Overview and Key Financials
Slide 7: A modern, high-quality and versatile fleet
A modern, high-quality and versatile fleet. March 31st, 2020 DIS Fleet 1 LR1 MR Handy Total % Owned 5.0 11.5 7.0 23.5 51.6% Bareboat chartered 1.0 8.0 0.0 9.0 19.8% Time chartered-in long-term 0.0 8.0 0.0 8.0 17.6% Time chartered-in short-term 0.0 5.0 0.0 5.0 11.0% TOTAL 6.0 32.5 7.0 45.5 100.0% Com
Slide 8: Rapidly declining CAPEX commitments
Rapidly declining CAPEX1 commitments. Investment plan US$/mm 250.0 194.6 200.0 3.9 DIS has no remaining newbuilding 164.4 151.1 CAPEX having fully completed its long- 150.0 12.8 0.7 term investment plan in FY’19 101.2 85.3 83.7 79.0 1.0 100.0 190.7 8.1 2.5 1.4 65.2 151.6 150.3 5.2 50.0 100.2 77.1 81
Slide 9: Lighter bank debt repayments from 2020
Lighter bank debt repayments from 2020. Forecasted bank debt financing cash-flow Daily bank loan repayment on owned vessels (Excluding overdraft facilities)1,2,3 (Excluding overdraft facilities)4,5 US$/mm US$/mm US$/mm US$/day 80.0 60.0 60.0 6,400 6,147 - 60.0 40.0 50.0 6,000 40.0 64.8 20.0 20.0 - 4
Slide 10: DIS' purchase options on leased vessels
DIS’ purchase options on leased vessels. Purch. Purch. First Ex. Option Vessel Name Build Date Option First Obligation 1 (In/Out of the money) Ex. Date Date High Trust Jan-16 Jul-19 Jul-28 In the money High Loyalty Feb-15 Oct-19 Oct-28 In the money High Priority Mar-05 Oct-19 Oct-22 In the money Hig
Slide 11: Contracts and fleet mix to drive future results
Contracts and fleet mix to drive future results. Increasing average TC rates1,2 • TC contract rates have reached a bottom in Q2’19 % of ‘employment days’ US$/day and average rates of signed contracts rise 70% 17,000 16,404 16,606 16,496 throughout 2019 and 2020. 16,171 16,500 • 16,223 TC contracts a
Slide 12: Large potential upside to earnings
Large potential upside to earnings. Estimated Fleet Evolution (Avg. N. of Vessels)1,2,4 Estimated Spot Exposure (Avg. N of Vessels)3,4 N. of ships (based on ‘available days’) N. of ships (based on ‘employment days’) 45 41.9 60 40 36.6 35.8 9.0 50 35 9.0 8.8 30 40 11.3 25 8.6 8.0 30 20 15 20 31.4 10
Slide 13: DIS has focused also on cost savings
DIS has focused also on cost savings. Daily Operating Costs – Owned and Daily General & Administrative Costs – bareboat vessels1 Total Fleet2 US$/day US$/day 7,600 800 7,500 790 7,400 780 7,300 770 7,200 760 7,100 750 800 7,465 785 7,000 740 783 6,900 7,172 730 6,800 6,949 720 6,700 710 6,600 700 Q1
Slide 14: Financial results. Net financial position
Financial results. Net financial position (US$ million) Dec. 31st, 2019 Mar. 31st, 2020 Gross debt (600.9) (592.6) IFRS 16 – additional liabilities (122.8) (115.9) Cash and cash equivalents 33.6 32.4 Other current financial assets1 7.3 9.4 Net financial position (NFP) (682.8) (666.7) Net financial p
Slide 15: Financial results. Q1'20 Results
Financial results. Q1’20 Results (US$ million) Q1’19 Q1’20 Non-recurring items: TCE Earnings 63.9 71.4 (US$ million) Q1’19 Q1’20 Result on disposal of vessels (0.1) (0.6) Result on disposal of vessels (0.1) (0.6) EBITDA 22.4 33.0 Non-recurring financial items (0.9) (2.3) Asset impairment - (1.6) IFR
Slide 16: Financial results. Key operating measures
Financial results. Key operating measures Key Operating Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Measures Avg. n. of vessels 49.4 49.8 48.5 47.6 48.8 46.0 Fleet contact 46.4% 48.0% 51.5% 60.4% 51.6% 64.6% coverage Daily TCE Spot 13,583 13,074 11,616 17,242 13,683 17,354 (US$/d) Daily TCE Cove
Slide 17: Market Overview – Market fundamentals
Market Overview – Market fundamentals
Slide 18: Improving asset values and TC Rates
Improving asset values and TC Rates. 1 Year TC MR (Conventional, non-Eco) rate1 5 & 10 year-old MR values1 US$/day US$/m 21,000 20,000 35 20,000 31.0 19,000 28.0 30 18,000 26.5 26.8 30.0 16,600 25.0 25.0 29.0 17,000 27.5 25 16,000 22.0 26.0 25.0 23.5 20.0 15,000 13,900 13,906 14,094 20 17.5 18.0 18.
Slide 19: The impact of Covid-19 on the product tankers market
The impact of Covid-19 on the product tankers market. % of LR2 fleet clean vs. dirty trade1 YTD’20 vs.’19 Clarksons’ MR2 spot clean earnings2 US$/day 80,000 74,081 100% 90% 70,000 80% 60,000 53% 52% 52% 70% 65% 64% 63% 65% 66% 66% 66% 66% 65% 60% 50,000 50% 40,000 40% 29,120 30,000 24,953 25,082 30%
Slide 20: Large drop in oil demand and refining throughputs
Large drop in oil demand and refining throughputs. Global oil demand1 Global refinery throughputs1 Million barrels per day Million barrels per day 100.0 90.0 90.0 84.1 85.0 82.9 82.9 83.1 80.0 82.1 81.8 82.1 81.8 80.6 81.2 80.1 80.2 70.0 80.0 82.6 75.9 80.2 60.0 78.9 75.0 78.0 77.4 100.7 97.6 77.0 5
Slide 21: Large but temporary build-up in floating storage
Large but temporary build-up in floating storage. Crude oil price (Brent, US$ bbl), forward curve1 CPP vs DPP Floating Storage2 Million barrels 36.0 34.6 325 34.1 33.5 300 34.0 32.8 32.1 275 31.3 32.0 250 30.3 225 30.0 28.9 200 28.0 27.1 175 150 26.0 24.8 125 24.0 100 21.4 75 22.0 50 20.0 25 0 Jan'2
Slide 22: Longer-term: healthy and resilient demand growth
Longer-term: healthy and resilient demand growth. World seaborne refined products trade1 Billion Tonne-miles 3,500 • Seaborne oil product trade 3,000 demand has contracted in 2019, it is expected to resume growth in 2,500 2020 has been increasing at a 2,000 strong CAGR of 3.5% since 2000. 1,500 • Fu
Slide 23: Longer-term: large potential upside to asset values
Longer-term: large potential upside to asset values. Historical MR TC and spot rates1 Historical MR asset values1 US$/day US$/m 45,000 40,000 60 1 YR TC and Spot rates are 55 NB, 5yr old and 10yr old vessels are 35,000 respectively ~34% and ~11% 50 respectively ~35%, ~44% and ~58% 30,000 below the l
Slide 24: Longer-term: growth in refinery capacity
Longer-term: growth in refinery capacity. Capacity additions 2019-2024 by region Refinery growth 2020-2024 kb/d 2% 1800 2,039 2,091 2400 12% 1600 2000 1,665 1400 27% 1200 1600 1000 1,018 973 10% 1200 800 800 600 315 400 400 200 0 0 -200 2019 2020 2021 2022 2023 2024 -400 21% -400 OECD North America
Slide 25: Longer-term: changes in refining landscape driving demand
Longer-term: changes in refining landscape driving demand. Changes in refining throughput 2019-20251 m bbl/d 5.0 4.8 4.1 4.0 3.0 2.2 2.0 1.3 1.0 0.8 0.8 0.7 0.4 0.2 0.2 0.0 Europe FSU Other Latin India North Africa Middle China Atlantic East of Total -0.4 Asia America America East Basin Suez World -
Slide 26: Longer-term: US crude exports
Longer-term: US crude exports. US exports of crude oil1 US pipeline additions2 Million barrels/day Million barrels/day 4.0 6.0 3.5 1.0 5.0 3.0 2.5 4.0 2.3 2.0 3.0 1.5 4.8 2.0 1.0 2.5 2.5 0.5 1.0 0.0 0.0 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 Apr'20 • In FY’19 US crud
Slide 27: Slowing fleet growth
Slowing fleet growth. MR & LR1 deliveries and scrapping (m dwt) (lhs), and net Current MR & LR1 fleet age fleet growth (%)1 (rhs) profile1 21% of current fleet Million Dwt 12 11.6% 11.9% 12% Million Dwt 11.3% 10 10% 30 6% of current fleet 9.7% 9.5% 26.1 6% of current fleet 8.7% 8 8% 25 6 6% 20 4.6%
Slide 28: Reduction in fleet growth expected already in H2 '20
Reduction in fleet growth expected already in H2 ‘20. MR & LR1 deliveries, 20201 40 35 30 N. Of vessels 25 20 34 15 28 24 10 18 18 5 0 Q1'20 Q2'20 Q3'20 Q4'20 Estimated deliveries Actual deliveries MR & LR1 demolitions, 2018-20201 16 14 12 N. Of vessels 10 8 14 13 13 6 10 4 7 6 5 5 2 4 0 Q1'18 Q2'18
Slide 29: Limited newbuild orders
Limited newbuild orders. MR Newbuilding parity curve vs MR & LR1 orders second-hand values1 US$ Million N. Of vessels 40.00 36.00 250 35.00 30.00 29.40 30.00 200 25.00 22.80 150 20.00 19.00 16.19 225 15.00 100 12.00 189 10.00 143 135 73 50 100 97 5.00 73 86 66 68 30 0.00 15 8 0 0 1 2 3 4 5 6 7 8 9 1
Slide 30: Strong long-term fundamentals
Strong long-term fundamentals. Seaborne volume and MR/LR1 fleet growth (lhs)%1 vs 1 year MR and LR1 TC rate (rhs) YoY% US$/day 16.00 35,000 31,090 14.00 29,185 30,000 27,006 12.00 23,446 23,597 25,000 10.00 22,819 8.00 18,866 18,869 16,492 17,754 18,127 20,000 16,625 16,629 6.00 15,078 13,169 13,131
Slide 31: Brokers see improving product tanker market
Brokers see improving product tanker market. …Covid-19 and the demand destruction is temporary, and we should see a recovery during 2Q20. According to EIA, OPEC cuts (from Saudi Arabia) are already happening, hence part of why the market is currently weak. EIA forecasts a strong rebound in oil produ
Slide 32: Why invest in DIS
Why invest in DIS
Slide 33: Historical NAV evolution
Historical NAV evolution. DIS’ Historical NAV evolution1 US$/m US$/share 1000 0.93 1.00 0.88 900 0.90 800 0.76 0.80 0.89 0.72 700 0.64 0.70 0.56 600 0.52 0.60 500 0.42 0.50 0.39 400 0.35 0.33 0.35 0.40 0.31 296 314 285 300 374 0.25 0.26 0.30 218 230 0.23 0.24 334 320 302 0.16 200 255 0.14 0.20 230 2
Slide 34: Why invest in DIS today
Why invest in DIS today. • Young-fleet, most of which acquired at historically attractive prices and at top-tier yards. Furthermore, vessels are mostly eco-design (65% of owned and bareboat ships following delivery of all DIS’ newbuildings) and IMO classed (75% of owned and bareboat ships following
Slide 35: Appendix
INTERNATIONAL SHIPPING SA.
Slide 36: DIS' Shareholdings Structure
DIS’ Shareholdings Structure. Key Information on DIS’ shares 3 d'Amico International SA 65.66% Others 33.64% d'Amico International Shipping SA 0.70% 100% 2 1 Listing market Borsa Italiana, STAR No. of shares 1,241,032,474 Market capitalisation1 €135.4 million Shares repurchased / % of share capital
Slide 37: d'Amico Group Structure
d’Amico Group Structure. 66% 64.0% 1 1 DIS benefits from the support of d’Amico Società di Navigazione S.p.A. 1. Eco Tankers Ltd and DM Shipping d.a.c. are currently under liquidation 37
Slide 38: Financial results. Consolidated Income Statement
Financial results. Consolidated Income Statement US$ Thousand Q1 2020 Q1 2019 Revenue 94,355 91,031 Voyage costs (22,941) (27,173) Time charter equivalent earnings* 71,414 63,858 Time Charter hire costs (6,955) (10,220) Other direct operating costs (27,650) (27,691) General and administrative costs
Slide 39: Financial results. Consolidated Balance Sheet
Financial results. Consolidated Balance Sheet As at As at US$ Thousand 31 March 2020 31 December 2019 ASSETS Property, plant and equipment 830,464 838,863 Right-of-use assets 111,956 119,449 Investments in jointly controlled entities 4,382 4,382 Other non-current financial assets 13,558 17,348 Total
Slide 40: Financial results. Consolidated Statement of Cash Flow
Financial results. Consolidated Statement of Cash Flow Q1 2020 Q1 2019 US$ Thousand Profit / (loss) for the period 1,517 (5,514) Depreciation and amortisation 10,259 8,758 Depreciation of right-of-use leased assets 7,250 8,480 Impairment 1,582 - Current and deferred income tax 96 100 Net finance lea
Slide 41: DIS' Current Fleet Overview. LR1 & MR Fleet
DIS’CURRENT FLEET OVERVIEW. LR1 & MR Fleet Owned - LR1 Tonnage (dwt) Year Built Builder, Country Interest1 IMO Classified Cielo di Londra 75,000 2019 Hyundai MIPO, South Korea (Vinashin) 100% - Cielo di Cagliari 75,000 2018 Hyundai MIPO, South Korea (Vinashin) 100% - Cielo Rosso 75,000 2018 Hyundai
Slide 42: DIS' Current Fleet Overview. MR Fleet
DIS’CURRENT FLEET OVERVIEW. MR Fleet TC - IN Long Term with purchase option Tonnage (dwt) Year Built Builder, Country Interest1 IMO Classified High Leader 50,000 2018 Japan Marine United Co., Japan 100% IMO II/IMO III High Navigator 50,000 2018 Japan Marine United Co., Japan 100% IMO II/IMO III High
Slide 43: DIS' Current Fleet Overview. Handy Fleet
DIS’CURRENT FLEET OVERVIEW. Handy Fleet Owned Tonnage (dwt) Year Built Builder, Country Interest1 IMO Classified Cielo di Salerno 39,043 2016 Hyundai MIPO, South Korea (Vinashin) 100% IMO II/IMO III Cielo di Hanoi 39,043 2016 Hyundai MIPO, South Korea (Vinashin) 100% IMO II/IMO III Cielo di Capri 39
Slide 44: Thank you!
Thank you!
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