Slide 1: Q109 Trading Update
Stock Code: 2343 Q109 Trading Update 23 April 2009
Slide 2: Pacific Basin Overview
Pacific Basin Overview X World’s leading dry bulk owner/operator of modern handysize vessels and a top 10 handymax operator, principally operating in the Asia Pacific region X Operating over 100 ships directly serving major industrial customers X Carrying the dry bulk commodities required for Asia’s
Slide 3: Q109 Highlight
Q109 Highlight X The dry bulk freight market improved to an unexpected degree during the first quarter of 2009 due to strong revival in demand and a much smaller than expected increase in the supply of ships Demand + ve Supply - ve XLower commodity prices XSoaring scrapping of older vessels XRe-stoc
Slide 4: Strategy
Strategy X Following 2008 strategic reorganisation: Handysize and Handymax Towage Roll on Roll off dry bulk businesses X Scale down non-core activities in China ports and maritime services X Strategic capital commitments fully funded; >75% of future capex in Towage and RoRo assets X Continue to buil
Slide 5: Business Development
Business Development PB Towage Roll on Roll off XOperates modern tugs in X6 newbuildings will deliver in Brisbane, Sydney, Melbourne, 2009 to 2011 including 2 W.Australia, Auckland and the purchase options with total Arabian Gulf. consideration of US$510m Other Operations & Business XProvide harbour
Slide 6: Roll On Roll Off (RoRo)
Roll On Roll Off (RoRo) X 4 newbuildings and 2 purchase option vessels (3,600-3,800 lane metres) set to deliver from 2009 to 2011 X Used for transportation of wheeled cargoes (mostly trucks) which are loaded over a ramp X Proven design, environmental friendly, and suitable for the common short sea t
Slide 7: Fleet Profile
Fleet Profile Fleet numbers as at 23 April 2008 Total core 118 ships Dry Bulk Fleet (excluding short term) – 84 Towage – 28 Short Term Chartered 1 – 24 Average Fleet Age: 6.7 years Tugs: 22 Barge: 6 Handysize: 67 Handymax: 15 Newbuildings 5 Owned 6 Newbuilding 2 Newbuilding 1 Chartered Owned 17 Char
Slide 8: Diversified Cargo
Diversified Cargo Total Handysize and Handymax Cargo Volume Mix Q1 2009 Log & Forestry Products 7% Fertilisers 12% Steel & Scrap 8% 6.7 Other Bulks* 6% Alumina 8% Million Cement & Tonnes Salt 5% Cement Clinker 6% Grains & Coal /Coke 7% Agriculture Products 11% Sugar 9% Ore 11% Concentrates 6% Petcok
Slide 9: Market Information
Market Information The Baltic Dry Index (BDI) The Baltic Handysize Index (BHSI) 22 April 2009 22 April 2009 1,869 $US/day US$ 9,166 (net) 12000 48,000 10000 42,000 36,000 8000 30,000 6000 24,000 4000 18,000 12,000 2000 6,000 0 0 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jun-06 Dec-06 Jun-07 Dec-07 J
Slide 10: Tonnage Demand Contracting
Tonnage Demand Contracting Changes in Tonnage Demand % change YOY 15 13.0% Significant decrease in 4Q 10.7% demand due to financial 9.4% 10 5.6% crisis, lack of trade credit, 3.9% 5 recession and slowdown -10.0% in economic growth 0 globally -5 Long term, the -10 industrialisation of China, India an
Slide 11: Fleet Development
Fleet Development Fleet Development 2007 - 2008 Million Dwt 36 8% 8% Increased scrapping of 32 7% 6.7% 7% existing old vessels 28 6.6% 7.0 6.5% 6.7% 7.3% 6% reduced the fleet afloat 0.1 6.2% 24 5% 20 4% 16 3% 12 24.7 23.4 4.0 Some 8.5mil dwt of 2% 8 0.1 1.2 1.7 Dry bulk vessels 1% 4 6.0 6.0 5.4 6.1
Slide 12: Orderbook
Orderbook Type of Vessels Orderbook as % of Existing Fleet (dwt) Dry Bulk * 70% Few new orders Ave. Age placed Capesize 100K + 105% 11.6 Panamax 60-100K 52% 12.0 Handymax 35K-60K Bank constraints 60% 15.3 limit desire and ability to order Handysize 25,000- 34,999 47% 17.6 Source: Clarksons Mar 2009
Slide 13: Slow Pace of Deliveries
Slow Pace of Deliveries 2008-2009 Dry Bulk Fleet Delivery Mil Dwt 32 2008 Orderbook In 2008, Orderbook: 30.4mil * 28 23% Reduction VS 2008 Actual Deliveries 24 Actual delivery:23.4mil 20 16 2009 scheduled An apparent Orderbook: 12 large shortfall 71.3 mil dwt ^ 8 4 Year to date deliveries 2008 and 2
Slide 14: Handysize Age Profile
Handysize Age Profile Orderbook Existing Fleet 25,000-34,999dwt (46%) Total handysize 25,000- 34,999 dwt fleet : 1,261 Vessels (37.1 mil dwt) 20% 17.4% 17.0% 16% 16% ≥ 30+Years 30+ years 16% 12% 10.1% 0-15 years 30% ≥ 25+Years 25-29 years 14% 51% 8% 4% 2.2% 16-24 years 18% 48% > 15+Years 0% 2009 201
Slide 15: Dry Bulk Carrier Sale & Purchase Market
Dry Bulk Carrier Sale & Purchase Market 2nd-hand five year old handysize vessel price (25K-35K dwt) Clarksons has stopped publishing handysize Last Update from Clarkson: (indeed any dry bulk US$ mil US$ 44 m (3 Oct 08) carrier) vessel values 55 50 Market turbulence has 45 affected secondhand 40 vess
Slide 16: Balance Sheet
Balance Sheet 31 Dec 08 31 Dec 07 US$mil Net book value of fixed assets 1 794.6 755.9 Gross borrowings 847.8 660.2 Cash 1,023.7 649.5 Net cash / (borrowings) 175.9 (10.7) Shareholder's equity 1,218.7 867.6 Net cash (borrowings) / Fixed assets 21.8% (1.4)% Net cash (borrowings) / Shareholder's equity
Slide 17: Daily Vessel Costs - Handysize
Daily Vessel Costs - Handysize As at 31 Dec 08 Owned Chartered US$/day Blended US$13,210 (2007: US$10,240) $16,820 530 15,000 Opex $12,850 Depreciation 12,500 620 Finance cost $9,410 Direct Overhead 10,000 $8,640 Charter-hire 1,160 1,080 +33% 7,500 1,660 12,230 16,290 1,720 5,000 2,670 2,590 2,500 3
Slide 18: Lower Future Charter Expenses
Lower Future Charter Expenses 2 adjustment items: One-off early termination Provision for onerous payments US$41.8 million charter contracts for new lower cost charters US$53.9 million PB Handysize PB Handymax Operating leases Operating leases US$/day Before After Days Before After Days Year 2009 15
Slide 19: Borrowings and Capex
Borrowings and Capex As at 31 Dec 2008 US$ mil 350 324 Funded from US$1,024 million cash, 291 300 new loans, and 250 225 future operating cashflows 200 150 91 100 57 69 44 47 33 45 50 34 32 32 18 16 20 8 14 15 17 0 2009 2010 2011 2012 2013 2014 2015 2016-2018 Capex (US$563mil) Bank borrowings (US$33
Slide 20: Capex and Combined Value by Vessel Types
Capex and Combined Value by Vessel Types As at 31 Dec 2008 A Combined View of Vessels Commitments Vessel Carrying Values and Commitments US$ mil US$ mil Total US$563 mil Total US$1,392 mil 350 737 291 750 300 4 130 600 78 250 225 533 25 200 450 114 265 150 529 403 300 100 26 47 150 122 50 30 25 13 6
Slide 21: Earnings Coverage
Earnings Coverage Earnings coverage as at 22 April 2008 Revenue Day Handysize Handymax ^ 25,000 22,770 days 21,800 days Fixed Unfixed 20,000 2010 Cover: Handysize: 39% 15,000 Handymax:165% 10,000 US$29,250 US$15,430 5,690 days 3,610 days 5,000 100% 78% US$44,870 US$31,310 100% 121% 0 2008 2009 2008
Slide 22: Counterparty Risk Management
Counterparty Risk Management Customer XDiversified customer base (over 200 customers) & ~100 different commodities carried X95%-100% of contracted dry bulk freight is payable upon completion of loading XFixing long term contracts with large, often blue chip commodity companies with a successful trac
Slide 23: Outlook
Outlook X Focus on three core segments of dry bulk, towage, and RoRo X Solid balance sheet as at 31 December 2008– US$176 million net cash, and shareholders’ equity of US$1.2 billion X 78% of 2009 handysize days covered at almost US$15,500 per day. 2009 total combined cover is 86% X Unchanged divide
Slide 24: Disclaimer
Disclaimer This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Pacific Basin and certain plans and objectives of the management of Pacific Basin. Such forward looking statements involve known and unknown risks,
Slide 25: Appendix - 2008 Financial Highlights
Appendix - 2008 Financial Highlights 2008 2007 TCE Earnings (US$m) 909.4 700.5 Vessel disposal gains 149.8 137.4 Reported net profit 409.1 472.1 One-off termination payments 41.8 - Provision for onerous charter contracts 53.9 - Net mark-to-market expenses for equity investment 23.1 - Impairment for
Slide 26: Appendix - Measures Taken in 2008
Appendix - Measures Taken in 2008 We are well positioned to weather the shipping and economic crisis and strengthen the Group: Adjusted Profit US$547m US$472m US$138m XWe have taken charges of US$138m for: Adjustment X One-off advance charter hire payments (US$42m) 409 X Provision for charter-in ves
Slide 27: Appendix - Results – Handysize Freight & Charter-hire
Appendix - Results – Handysize Freight & Charter-hire Drivers of the results 1H08 2H08 2008 2007 % Change Revenue days (days) 11,540 11,230 22,770 20,100 +13% TCE earnings (US$/day) 32,460 25,950 29,250 23,200 +26% Owned + chartered cost (US$/day) 12,840 13,590 13,210 10,240 +29% Contribution (US$m)
Slide 28: Appendix - Results – Handymax Freight & Charter-hire
Appendix - Results – Handymax Freight & Charter-hire Drivers of the results 1H08 2H08 2008 2007 % Change Revenue days (days) 2,900 2,790 5,690 4,870 +17% TCE earnings (US$/day) 46,100 43,590 44,870 30,040 +49% Owned + chartered cost (US$/day) 32,940 38,120 35,460 23,050 +54% Contribution (US$m) 38.2
Slide 29: Appendix – Impact of Financial Instruments
Appendix – Impact of Financial Instruments Year ended 31 December US$ mil Realised Unrealised 2008 2007 Net Gains / (Losses) Interest rate swap contracts (0.8) (5.9) (6.7) (1.4) Bunker swap contracts 11.8 (59.0) (47.2) 35.4 Forward freight agreements 5.2 71.8 77.0 (51.9) 16.2 6.9 23.1 (17.9) Complet
Slide 30: Appendix - Cashflow
Appendix - Cashflow US$ mil 2008 2007 Operating cash inflows 459.1 314.0 Investing cash (out) / inflows (244.5) 102.0 - Vessels & other fixed assets related payments (378.1) (259.4) - Sales of vessels 313.5 365.9 - Jointly controlled entities related payments (84.7) (1.5) - Purchase of available-for