Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (February 2015)
36 slides from Great Eastern Shipping's investor presentation, February 2015
Slide 1: The Great Eastern Shipping Co. Ltd. Business & Financial Review
The Great Eastern Shipping Co. Ltd. Business & Financial Review February 2015 1
Slide 2: Forward Looking Statements
Forward Looking Statements 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
Slide 3: Corporate Profile
Corporate Profile The Great Eastern Shipping Co. Ltd. Incorporated in 1948 Shipping Business Offshore Business Wet bulk Through subsidiary Greatship (India) Limited - Logistics Crude Tankers Product Tankers - Drilling Dry bulk 3
Slide 4: Company at a glance
Company at a glance India’s largest private sector Shipping Company Diverse asset base with global operations Completed 66 years of operations Over 30 years of uninterrupted dividend track record Shareholding Pattern as on December 31, 2014 Public FIIs 22% 23% Govt/FI 18% Promoters Bodies 30% Corpor
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 30 ships aggregating 2.45 Mn dwt, avg.age 10.6 years 21 Tankers avg.age 11.0 years - 8 Crude carriers (4 Suezmax, 4 Aframax) avg.age 12.2 years - 12 Product tankers (4 LR1, 8 MR) avg.age 8.4 years - 1 Very Large Gas Carrier avg.age 21.0 years 9 Dry bulk carriers avg.age
Slide 6: Shipping business- CAPEX plan
Shipping business- CAPEX plan Vessels on Order Vessel Yard CAPEX: ~ USD 180 mnExpected Total committed –ADD YR Delivery WISE 1 Medium Range Product TankerCAPEX BRK UP) STX Group Q4FY16 2 Kamsarmax Dry Bulk Carriers Tsuneishi Shipbuilding H1FY16 3 Kamsarmax Dry Bulk Carriers Jiangsu New Yangzi Shipbu
Slide 7: Asset Price Movement (5 yr old)- Tankers
0 20 40 60 80 100 120 140 160 180 Source: Clarkson 2002-01 2002-05 2002-09 2003-01 2003-05 VLCC 2003-09 2004-01 2004-05 2004-09 2005-01 2005-05 2005-09 Suezmax 2006-01 2006-05 2006-09 2007-01 2007-05 MR 2007-09 2008-01 2008-05 2008-09 2009-01 Amt in US$ mn 2009-05 - 2009-09 20 40 60 80 2010-01 2010-
Slide 8: Asset Price Movement (5 yr old) – Dry Bulk
- 20 40 60 80 100 120 140 160 Source: Clarkson 2002-01 2002-05 2002-09 2003-01 2003-05 Capesize 2003-09 2004-01 2004-05 2004-09 2005-01 2005-05 2005-09 Panamax 2006-01 2006-05 2006-09 2007-01 2007-05 2007-09 2008-01 2008-05 Supramax 2008-09 2009-01 Amt in US$ mn 2009-05 - 2009-09 10 20 30 40 50 2010
Slide 9: Asset Price Movement
Asset Price Movement 20 year High /Low: (5 year old assets) (Amt in $mn) High Low Current Tankers 165 49 VLCC 81 (2008) (1994) 105 32 Suezmax 60 (2008) (1993) 46 20 MR 25 (2007) (1999) Dry Bulk 155 25 Capesize 36 (2008) (1999) 92 14 Panamax 19 (2007) (1999) 75 13 Supramax 19 (2007) (1998) 9 Source:
Slide 10: BDTI & BCTI Movement (Jan 2005 to Jan 2015)
BDTI & BCTI Movement (Jan 2005 to Jan 2015) BDTI BCTI 2500 • Uptick in demand post refinery maintenance • Seasonal pick-up in demand for heating during winter 2000 • Stocking/Storage due to low oil prices & contango • Weather-related delays 1500 1000 500 0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 J
Slide 11: Pressure on oil prices could continue as OPEC maintains production
Pressure on oil prices could continue as OPEC decides to maintain production levels even at lower prices • Most oil analysts predict that oil surplus is likely to persist, atleast in H1 2015 • This could lead to continued pressure on prices • Decline in US rig count – A watch point 11 Source: DNB, I
Slide 12: Lower oil prices support stocking/storage
Lower oil prices support stocking/storage.. Steep contango could lead to floating storage China crude oil imports • Rising imports from China – Low oil prices and filling of the SPR • Brent contango – Steepness of contango along with availability of storage capacity China crude oil imports – barrel-
Slide 13: Crude Oil Trade – Changing patterns
Crude Oil Trade – Changing patterns... OIL OIL OIL OIL OIL OIL OIL OIL OIL OIL 13 Source: Industry Reports
Slide 14: Significant new Refining capacity additions coming up in Asia and Middle East
Significant new Refining capacity additions coming up in Asia and Middle East… The latest IEA report (June) expects about 1.4m–1.5m bpd of added global refining capacity annually for 2014–2017. Asia-Pacific and Middle East to account for three-fourth of the total refinery additions US refining secto
Slide 15: Leading to overcapacity, potential closures in the OECD region
Leading to overcapacity, potential closures in the OECD region, lower utilization along with scaling back of certain planned expansions Refining Capacity Rationalization Chinese CDU expansions vs. previous projections Expansion in Latin America could witness delays China stalls new projects on loomi
Slide 16: Growing Product trade… Changing trade patterns
Growing Product trade… Changing trade patterns 16 Source: Industry Reports
Slide 17: BDI Movement (Jan 2001 to Jan 2015)
BDI Movement (Jan 2001 to Jan 2015) 14000 China announces $586 bn stimulus 12000 In Q4 2014, Cargo growth but China’s iron ore 10000 2008 market record NB import growth crash, BDI deliveries slowed 8000 dropped by 94% 6000 4000 2000 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Ja
Slide 18: Seaborne Bulk Trade … growing steadily
Seaborne Bulk Trade … growing steadily 5000 4500 Global dry bulk seaborne trade reached 4.5 bn tons in 2014 4000 3500 Contribution to seaborne trade growth by commodity 3000 2500 81% 2000 1500 1000 500 0 15% Mn.tons 8% Minor Bulk Grains Coal Iron Ore Iron Ore Coal Grains Minor Bulk -4% Seaborne trad
Slide 19: Dry Bulk Trade …Driven by Iron Ore Volumes
Dry Bulk Trade …Driven by Iron Ore Volumes Total Seaborne Iron Ore Supply (mt) Until 2016, iron ore Australia Brazil India RoW seaborne trade will 1000 be a function of 900 available 800 international 700 supplies 600 500 400 Post 2016, iron ore 300 seaborne trade to be 200 directed by demand 100 an
Slide 20: Dry Bulk Trade…China ore import substitution continues
Dry Bulk Trade…China ore import substitution continues 1000 mn tonnes Imported Iron Ore 933 • Continued import 820 744 800 628 619 686 substitution led to higher 600 444 383 imports 400 275 326 208 200 92 111 148 • Increasing share of Australia 0 in China’s total ore imports 2001 2002 2003 2004 2005
Slide 21: Dry Bulk Trade …Lack luster Chinese coal imports
Dry Bulk Trade …Lack luster Chinese coal imports take the sheen off !!!...India to become the growth driver.. China coal imports (mt) India coal imports (mt) 40 168 168 35 146 139 30 25 103 20 73 69 15 59 10 5 0 FY09 FY10 FY11 FY12 FY13 FY14 9MFY14 9MFY15 Jul-12 Jul-13 Jul-14 Jan-12 Apr-12 Jan-13 Ja
Slide 22: Dry Bulk Trade …Indonesian bauxite & nickel ore exports plunged
Dry Bulk Trade …Indonesian bauxite & nickel ore exports plunged to zero following the ban China bauxite imports China nickel ore imports • Slow pick-up in trade growth on account of pre-ban stocking by China • China could secure bauxite from new sources, domestic capacity expansions (China) to bridg
Slide 23: World Fleet Growth
World Fleet Growth 800 700 mn dwt Dry Bulk Crude Product 600 500 400 300 200 100 0 Mn.dwt 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 World Fleet Fleet CY2015 CY2016 CY2017+ addition (as on 1st Jan'15) (in mn dwt) Crude tankers 366 5% 6% 3% Product tankers 142 8% 6% 3% Dry bulk
Slide 24: Scrapping… too little to cheer
Scrapping… too little to cheer Scrapping as % of world fleet (year wise) Fleet as on Scrapping Vessel Category CY2012 CY2013 1st Jan 2015 2014 (in mn dwt) (in mn dwt) 366 6 Crude 3% 2% 142 2.3 Product 2% 2% 756 15.9 Bulk 5% 3% * LR 2 product tankers included in Crude Require acceleration in scrappin
Slide 25: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary) Business & Financial Review December 2014 25
Slide 26: Offshore business- Fleet Profile
Offshore business- Fleet Profile The Greatship Group Current Owned Fleet 3 Jack Up Rigs (350ft) 5 Platform Supply Vessels (PSV) 9 Anchor Handling Tug cum Supply Vessels (AHTSV) 2 Multipurpose Platform Supply and Support Vessels (MPSSV) 6 Platform / ROV Support Vessels (ROVSV) On Order: 1 Jackup Rig
Slide 27: Greatship’s Modern & Technologically Advanced Fleet
Greatship’s Modern & Technologically Advanced Fleet Young Fleet Young fleet with an average age of approx. 4 years by FY 2013-14 - Higher utilization rates Revenue Demand shifting to modern vessels, especially as Efficiencies - Minimum down time safety becomes a major concern for oil companies Techn
Slide 28: Offshore Service Value Chain
Offshore Service Value Chain Exploration Development Production Length of - 3 to 5 years - 2 to 4 years - 5 to 55 years Typical Cycle - Collection of survey data - Construction & installation of - Management of oil & gas production platforms, production - Analysis & interpretation Description pipeli
Slide 29: E&P spending to decline in response to lower oil prices
E&P spending to decline in response to lower oil prices Barclays E&P survey Low oil prices has led to E&P spending cut announcements Impact likely to be higher on Deep and Ultra deepwater projects. However, day rates across segment will remain under pressure 29 Source: Barclays E&P Survey
Slide 30: Global Fleet Supply – Offshore
Global Fleet Supply – Offshore (Nos) Jackup AHTSVs PSV / Rigs Supply Current Fleet 504 2,039 1,463 Orderbook 135 178 344 % of O/B to 29% 9% 24% current fleet • High fleet growth to impact rates • However, utilization for modern assets to be higher • Potential scrapping as current world fleet of jack
Slide 31: Financial Highlights Q3 FY 2015
FINANCIAL HIGHLIGHTS Q3 FY 2015 31
Slide 32: Q3FY 2015 Financial Highlights
Q3FY 2015 Financial Highlights Standalone Key Figures Consolidated Q3FY'15 Q3FY'14 9MFY'15 (Amount in Rs. crs) Q3FY'15 Q3FY'14 9MFY'15 Income Statement 512.52 415.43 1555.31 Revenue (including other income) 944.25 792.99 2810.66 206.90 157.34 668.69 EBITDA (including other income) 406.84 360.62 1334
Slide 33: Q3FY 2015 Financial Highlights
Q3FY 2015 Financial Highlights Standalone Key Figures Consolidated Q3FY'15 Q3FY'14 9MFY'15 Q3FY'15 Q3FY'14 9MFY'15 40.37% 37.87% 42.99% EBITDA Margin (%) 43.09% 45.48% 47.50% 5.55% 1.08% 7.19% Return on Equity (ROE) (%) 9.87% 5.99% 11.44% 5.76% 3.13% 6.69% Return on Capital Employed (ROCE) (%) 7.52%
Slide 34: Q3 FY 2015 Performance Highlights
Q3 FY 2015 Performance Highlights Breakup of revenue days Revenue Days Q3’FY15 Q3’FY14 Owned Tonnage 2,547 2,599 Inchartered Tonnage 0 0 Total Revenue Days 2,547 2,599 Total Owned Tonnage (mn.dwt)* 2.45 2.42 * As on 31st December, 2014 Mix of Spot & Time Days (in %) Q3’FY15 Q3’FY14 Average TCY Detai
Slide 35: Book Value & Net Asset Value (NAV) comparison
Book Value & Net Asset Value (NAV) comparison Last 4 quarters Consol. Book Consol. NAV Value (Rs. Per share) (Rs. Per share) December 2014 496 557 September 2014 480 558 June 2014 468 560 March 2014 449 550 35
Slide 36: THANK YOU
THANK YOU visit us at www.greatship.com 36
The Great Eastern Shipping — Investor Presentation (February 2015) on 6ix