D'amico International Shipping S.a. · MIL:DIS
D'amico International Shipping — Q3 2021 Earnings Presentation
56 slides from D'amico International Shipping's earnings presentation, Nov 11, 2021
Slide 1: Q3 & 9M 2021 Presentation
Q3 & 9M 2021 Presentation d’Amico International Shipping 11th November, 2021
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 ▪ DIS’ ESG ▪ Appendix
Slide 4: Executive summary
Executive summary. • Net result – Due to the challenging market experienced in the first 9M’21, DIS recorded a Net loss of US$ (28.9)m vs. a Net profit of US$ 15.4m in the first 9M’20 and Adjusted net result (excluding non-recurring/non-cash items from both periods) of US$ (22.6)m in the first 9M’21
Slide 5: Executive summary (continued)
Executive summary (continued). • Opportunistic value creation through share buybacks – In Q1’21 DIS invested around € 0.3 million in share repurchases, in addition to around € 0.7 million already invested in FY’20. As at the end of September ’21, DIS held nr. 18,326,911 own shares, representing 1.48
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. September 30th, 2021 DIS Fleet1 LR1 MR Handy Total % Owned 5.0 9.0 6.0 20.0 52.6% Bareboat chartered 1.0 7.0 0.0 8.0 21.1% Time chartered-in long-term 0.0 9.0 0.0 9.0 23.7% Time chartered-in short-term 0.0 1.0 0.0 1.0 2.6% TOTAL 6.0 26.0 6.0 38.0 100.0% •
Slide 8: Rapidly declining CAPEX commitments
Rapidly declining CAPEX1 commitments. Investment plan US$/mm 250.0 194.6 200.0 3.9 DIS has no remaining newbuilding 164.4 151.1 CAPEX, having fully completed its long- 12.8 150.0 0.7 101.2 term investment plan in FY’19 85.3 83.7 79.0 1.0 100.0 190.7 8.1 2.5 1.4 65.2 151.6 150.3 5.2 50.0 100.2 77.1 8
Slide 9: Lighter bank debt repayments and low refinancing risk
Lighter bank debt repayments and low refinancing risk. Forecasted bank debt financing cash-flow Daily bank loan repayment on owned vessels (Excluding overdraft facilities)1,2,3 (Excluding overdraft facilities)1,2,3 US$/mm US$/mm US$/mm US$/day 150 60 60 6,600 6,147 - 6,200 100 40 50 5,800 - 50 109.8
Slide 10: DIS' purchase options on leased vessels
DIS’ purchase options on leased vessels. Purch. Purch. Option First Ex. Option Vessel Name Build Date Obligation 1 First Ex. (In/Out of the money) Date Date 2 High Priority Mar-05 Oct-19 Oct-22 Exercised in Q1'21 High Freedom Jan-14 Feb-20 Feb-24 In the money High Fidelity Aug-14 May-20 May-27 In th
Slide 11: Contracts and modern fleet to drive future results
Contracts and modern fleet to drive future results. Average TC and TC equivalent covered rates1 • After peaking in 2020, current contracts rates decline % of ‘employment days’ US$/day 17,866 17,708 18,000 throughout 2021; the proportion of the fleet covered 70% also falls gradually throughout the ye
Slide 12: Large potential upside to earnings
Large potential upside to earnings. Estimated fleet evolution (avg. n. of vessels)1,2 Estimated spot exposure (avg. n. of vessels)3 N. of ships (based on ‘available days’) N. of ships (based on ‘employment days’) 40 37.8 60 36.2 35.9 35 8.0 50 8.0 8.0 30 40 25 10.0 9.2 8.9 20 30 15 20 33.2 10 19.8 1
Slide 13: DIS focused also on cost savings
DIS focused also on cost savings. Daily operating costs – owned and General & administrative costs – total fleet bareboat vessels1 US$/day US$/m 7,400 14.0 7,200 12.0 7,000 10.0 6,800 8.0 6,600 7,280 6.0 12.1 10.2 9.1 9.3 6,400 6,732 4.0 6,716 6,706 6,200 2.0 6,000 0.0 9M'18 9M'19 9M'20 9M'21 9M'18
Slide 14: Financial results. Net financial position
Financial results. Net financial position (US$ million) Dec. 31st, 2020 Sep. 30th, 2021 Gross debt (532.0) (497.6) IFRS 16 – additional liabilities (96.4) (86.9) Cash and cash equivalents 62.1 42.0 Other current financial assets1 4.7 3.3 Net financial position (NFP) (561.5) (539.2) Net financial pos
Slide 15: Financial results. 9M'21 Results
Financial results. 9M’21 Results Non-recurring items: (US$ million) Q3’20 Q3’21 9M’20 9M’21 (US$ million) Q3’20 Q3’21 9M’20 9M’21 TCE Earnings 54.1 42.1 204.2 131.0 Result on disposal of vessels (0.6) (0.5) (0.7) (1.6) Result on disposal of vessels (0.6) (0.5) (0.7) (1.6) Non-recurring financial ite
Slide 16: Financial results. Key operating measures
Financial results. Key operating measures Key Operating Q1 2020 Q2 2020 Q3 2020 9M 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 9M 2021 Measures Avg. n. of vessels 46.0 44.4 41.9 44.1 40.4 43.2 38.8 38.0 38.0 38.3 Fleet contact 64.6% 62.6% 63.0% 63.5% 56.6% 61.9% 49.5% 46.7% 48.4% 48.2% coverage Dai
Slide 17: Market overview – market fundamentals
Market overview – market fundamentals
Slide 18: Oil demand and refining throughputs recovering
Oil demand and refining throughputs recovering. Global oil demand1 Global refinery throughputs1 Million barrels per day Million barrels per day 105.0 90.0 100.6 100.6 84.1 98.8 99.0 85.0 82.9 82.9 83.1 100.0 82.1 81.2 81.8 82.1 81.8 80.6 80.1 80.2 98.9 80.0 82.4 78.2 95.0 97.8 80.8 80.0 95.2 78.1 77
Slide 19: Refined product inventories at low levels
Refined product inventories at low levels. Crude oil price (Brent, US$ bbl), forward curve1 CPP vs DPP and crude oil floating storage2 Million barrels 86.0 84.5 350 83.9 325 83.3 84.0 82.3 300 81.4 275 82.0 80.6 250 79.9 225 80.0 79.1 78.4 200 77.7 175 78.0 77.1 76.5 150 75.9 125 76.0 100 75 74.0 50
Slide 20: Near-term demand green shoots: vehicles are rolling
Near-term demand green shoots: vehicles are rolling. US interstate vehicle miles traveled S. Europe traffic performance vs. L. America traffic performance vs. (VMT) vs. same week of 20191 same week of 20192 same week of 20192 % change vs. same % change vs. same % change vs. same week in 2019 week in
Slide 21: Near-term demand green shoots: jet fuel recovery
Near-term demand green shoots: jet fuel recovery. % Change in number of commercial flights vs. 20191 Jet fuel2 demand by use vs 2019 Pre-Covid (mbpd) 10% 140% 0% 120% May-20 May-21 Feb-21 Jul-21 Feb-20 Mar-20 Apr-20 Jul-20 Mar-21 Apr-21 Oct-20 Oct-21 Jun-20 Nov-20 Dec-20 Jan-20 Aug-20 Sep-20 Jan-21
Slide 22: Near-term demand green shoots: oil for electricity
Near-term demand green shoots: oil for electricity1 Coal Price - Loading Richards Bay Natural Gas Price - NYME futures USGC Maya Coking Refinery Margin South Africa (US$/mt) (US$/MMBtu) (US$/bl) 250 238 6.0 5.88 16.0 13.69 200 220 5.0 5.43 14.0 12.0 10.36 11.06 4.0 11.77 150 3.24 3.08 10.0 9.17 3.93
Slide 23: Near-term demand green shoots: oil for electricity
Near-term demand green shoots: oil for electricity LR2 Fleet Trading History 100% 3% 3% 3% 2% 3% 90% 80% 39% 37% 46% 42% 47% 70% 60% 50% 40% 30% 55% 59% 60% 51% 50% 20% 10% 0% Jan-20 Jul-20 Jan-21 Jul-21 Latest Clean Dirty Unknown • LR2s are swing vessels that move from transporting clean to dirty c
Slide 24: Longer-term: healthy and resilient demand growth
Longer-term: healthy and resilient demand growth. World seaborne refined products trade1 Billion Tonne-miles ‘20-’22 CAGR: 7.3% ‘00-’19 CAGR: 3.5% • Seaborne oil product trade 3,500 3,000 demand has contracted in 2019 2,500 and fell sharply in 2020 before an expected sharp rebound in 2021 2,000 and
Slide 25: Longer-term: large potential upside to asset values
Longer-term: large potential upside to asset values. Historical MR TC and spot rates1 Historical MR asset values1 US$/day US$/m 45,000 40,000 1 YR TC and Spot rates are 60 35,000 respectively ~59% and ~89% 55 NB, 5yr old and 10yr old vessels are 30,000 below the last cycle peak 50 respectively ~24%,
Slide 26: Longer-term: dramatic changes in the refinery landscape
Longer-term: dramatic changes in the refinery landscape. Portion of net refinery capacity additions ‘21-’26 40% • Global refinery crude distillation capacity should rise by 4.8m b/d 30% in the ‘21-26 period. 20% • ~91% of the planned refinery net capacity additions in the ‘21- 28% 28% 34% ’26 period
Slide 27: Several forces spurring demolition
Several forces spurring demolition. Scrap steel price1 Iron ore price2 US$/ldt US$/Ton 700 22-Oct-2021, 250 605 211 16-Apr-2010, 10-Oct-2014, 600 480 515 510 200 500 151 145 400 150 125 19-Aug-2011, 445 142 300 100 88 80 120 106 200 17-Jul-2020, 04-Mar-2016, 81 270 50 71 240 69 100 47 0 - Apr-2011 O
Slide 28: Growing pool of demolition candidates
Growing pool of demolition candidates. Historical and forecasted fleet composition by age (MRs and LR1s) (dwt, as at period end) 60% 55.8% 50% 46.6% 40% 37.7% 30% 31.0% 27.5% 25.0% 20% 15.9% 20.8% 12.5% 13.7% 12.6% 16.0% 8.9% 8.2% 9.0% 10% 11.1% 8.0% 5.7% 6.4% 6.2% 6.1% 6.7% 0% 5.6% 5.4% 4.9% 6.0% 4
Slide 29: Strong pick-up in demolitions already visible
Strong pick-up in demolitions already visible. MR & LR1 deliveries, 20211 30 25 20 N. Of vessels 15 27 27 23 24 10 21 19 18 5 0 Q1'21 Q2'21 Q3'21 Q4'21 Estimated deliveries Actual deliveries MR & LR1 demolitions, 2018-20211 20 18 16 N. Of vessels 14 12 10 18 18 8 6 13 13 12 10 4 7 8 6 5 2 4 4 2 1 3
Slide 30: Limited newbuild orders
Limited newbuild orders. MR Newbuilding parity curve vs MR & LR1 orders second-hand values1 US$ Million N. Of vessels 45.0 41.5 250 40.0 34.3 35.0 200 30.0 28.0 27.2 25.0 150 20.0 20.0 17.5 225 100 189 15.0 11.0 143 135 10.0 50 100 97 68 55 53 5.0 66 68 73 76 30 0.0 15 0 0 1 2 3 4 5 6 7 8 9 10 11 12
Slide 31: 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 27.5% of current fleet Million Dwt 12 11.6%11.9% 12% 11.3% Million Dwt 10 9.7% 10% 40 9.5% 34.5 6.2% of current fleet 8.7% 4.5% of current fleet 8 8% 35 6 6% 30
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 0.94 1.00 0.89 0.90 900 0.90 800 0.76 0.80 0.72 700 0.65 0.70 600 0.56 0.60 0.53 500 0.42 0.50 374 0.40 400 334 0.35 0.34 0.40 302 0.31 314 291 300 255 0.25 240 245 0.24 0.30 230 222 218 213 0.20 0.20 0.16 0.17 200 0.14 0.
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 (75% of owned and bareboat ships) and IMO classed (76% of owned and bareboat ships). • First-class in-house technical management provides
Slide 35: DIS' ESG
BA INTERNATIONAL SHI Vy “3
Slide 36: DIS' core values
DIS’ CORE VALUES. Long term vision Guided by the values of family tradition, we build our success on long term planning and turning our promises into actions. Focus onthe environment and safety We do not compromise when it comes to environmental concerns. Care and attention, prudence and respect for
Slide 37: DIS' ESG at a glance
DIS’ ESG at a glance. DIS’ Key facts and DIS Industry DIS’ Key facts and DIS figures: Figures Average figures: Figures Lost Time Injury ✓ IMO Classed Fleet (%) 1 77.5% 39% ✓ Frequency (LTIF YTD) 2,7 0 Owned and bareboat ✓ fleet Age (Years) 1,3 6.9 11.8 ✓ Percentage of female colleagues onshore 2 43.
Slide 38: DIS' ESG – Corporate Governance
DIS’ ESG – Corporate Governance DIS is listed on the most demanding segment of the Milan stock exchange (the Star), and has therefore adopted a first-class corporate governance framework: • Listed on the Star segment of the Milan Stock Exchange since 2007; • High standards of corporate governance: •
Slide 39: DIS' ESG – Social responsibility
DIS’ ESG – Social responsibility DIS seeks a diverse and inclusive work environment, where team work is highly valued. The high levels of employee satisfaction result in high retention rates. • 24 onshore personnel as at 31 December 2020; • 600 seagoing personnel as at 31 December 2020; • 74% retent
Slide 40: DIS' ESG – Environment and Safety
DIS’ ESG – Environment and Safety DIS seeks to be an industry leader on environmental and safety issues: • Among the first fleets worldwide compliant with Monitoring Reporting and Verification criteria for CO2 emissions. • Since 2011 DIS has a fleet performance monitoring department to optimize vess
Slide 41: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable DIS’ Sustainable DIS’ Sustainable Sustainability Development Sustainability Development Sustainability Development Topics Goals Topics Goals Topics Goals Vessel energy Integrated Ship recycling efficiency management system for ongoing improvement
Slide 42: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable Activity performed by DIS Sustainability Topics Development Goals Vessel energy efficiency • Renewal of the fleet with “Eco” vessels, in line with IMO directives, thanks to the implementation of innovative technologies. Innovation: • Projects aime
Slide 43: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable Activity performed by DIS Sustainability Topics Development Goals Integrated management • Transparent statement of policies governing operations on board managed ships - in system for ongoing order to ensure safety and efficiency - and of the meth
Slide 44: UN's Sustainable Development Goals
UN’s SUSTAINABLE DEVELOPMENT GOALS. DIS’ Sustainable Activity performed by DIS Sustainability Topics Development Goals Ship recycling • Preparation of hazardous material inventories on all new buildings and on the existing fleet. Stakeholder engagement • Stakeholder mapping and detection of needs an
Slide 45: Appendix
INTERNATIONAL SHIPPING SA
Slide 46: DIS' Shareholdings Structure
DIS’ Shareholdings Structure. Key Information on DIS’ shares 3 d'Amico International SA 65.65% Others 32.87% d'Amico International Shipping SA 1.48% 100.00% 2 1 Listing market Borsa Italiana, STAR No. of shares 1,241,053,006 Market capitalisation1 €126.9 million Shares repurchased / % of share capit
Slide 47: d'Amico Group Structure
d’Amico Group Structure. 100% d’Amico Società di Navigazione Spa d’Amico International S.A. 100% 100% d’Amico Shipping Ishima Pte Ltd Italia SpA 51% 85% Mida Maritime Rudder S.A.M. Company d.a.c 76.9% 100% Sirius Ship d’Amico Dry d.a.c. Management S.r.l. 65.66% d’Amico International Shipping S.A. 10
Slide 48: IMO (MEPC 76): CII and EEXI
IMO (MEPC 76): CII and EEXI. In June 2021, IMO's Marine Environment Protection Committee (MEPC 76) adopted amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that will require ships to reduce their greenhouse gas emissions. These amendments combin
Slide 49: EU Emission Trading System (ETS) and Fuel EU
EU Emission Trading System (ETS) and Fuel EU. The European Commission has recently published a set of legislative proposals to enable the EU to attain its 2030 target of reducing its greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels. In particular, the EU Commission proposed
Slide 50: Financial results. Consolidated Income Statement
Financial results. Consolidated Income Statement 9 MONTHS 9 MONTHS Q3 2021 Q3 2020 US$ Thousand 2021 2020 59,298 64,337 Revenue 181,335 249,679 (17,192) (10,255) Voyage costs (50,338) (45,523) 42,106 54,082 Time charter equivalent earnings* 130,997 204,156 (895) (877) Time charter hire costs (2,515)
Slide 51: Financial results. Consolidated Balance Sheet
Financial results. Consolidated Balance Sheet As at As at US$ Thousand 30 September 2021 31 December 2020 ASSETS Property, plant and equipment and Right-of-use assets 847,022 901,765 Investments in jointly controlled entities - 4,312 Other non-current financial assets 10,346 12,110 Total non-current
Slide 52: Financial results. Consolidated Cash Flow Statement
Financial results. Consolidated Cash Flow Statement 9 MONTHS 9 MONTHS Q3 2021 Q3 2020 US$ Thousand 2021 2020 (13,751) (1,732) Profit (loss) for the period (28,930) 15,406 16,428 16,805 Depreciation and amortisation 49,059 51,354 5,763 2,300 Impairment 5,763 6,286 (4) 19 Current and deferred income t
Slide 53: 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 54: 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 55: 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 56: Thank you!
Thank you!
d'Amico International Shipping — Q3 2021 Earnings Presentation on 6ix