Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (November 2006)
30 slides from Great Eastern Shipping's investor presentation, Nov 17, 2006
Slide 1: The Great Eastern Shipping Co. Ltd. Investors Meet
The Great Eastern Shipping Co. Ltd. Investors Meet 17th November, 2006
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: Shipping an eternal industry
Shipping an eternal industry Ø In existence from early civilisation Ø Evolved as supporting industry to the industrial revolution Ø Used as a second line of defence Ø 80% of cargo traded today is seaborne and almost 100% of hydrocarbon is transported through ocean Ø As cargo volume increased larger
Slide 4: Shipping Services
Shipping Services Shipping Liner Service Tramp Shipping Freight Passenger Freight Containers / Ferry Cruise Dry Bulk Wet Bulk Refers & others 4
Slide 5: ..truly a global industry
..truly a global industry UK BANK India MEG KOREA CHARTERER 5
Slide 6: Type of ships
Type of ships TANKERS: Crude ULCC/VLCC (200,000 + ) dwt Suezmax (120,000-199,999) dwt Aframax (80,000-119,999) dwt Product Panamax (60,000-79,999) dwt Medium Range (40,000-60,000) dwt General Purpose (< 40,000) dwt DRY BULK CARRIERS: Capesize (100,000+ ) dwt Panamax (60,000-100,000) dwt Handymax (40
Slide 7: Earnings' Drivers
Earnings’ Drivers Demand Drivers Supply Drivers Trade Growth Trade Patterns Ordering Scrapping Wet/Dry Economic World GDP Refinery Shipbldg. location capacity Life growth Wet Wet/Dry OPEC prodn Sourcing Replacement Market areas demand dynamics Oil inventory levels Dry Regional grain Steel New buildi
Slide 8: Industry Fundamentals
Industry Fundamentals Tanker Ø Oil single largest denominator of growth, no easy way to slow down the growth momentum in “energy” Ø China playing a key role in demand growth; predominance of long haul Ø Asia Pacific region expected to be a global refinery hub; US “outsourcing” refining Dry Bulk Ø Ma
Slide 9: Tanker Market Outlook
Tanker Market Outlook Ø OPEC production cut and comfortable inventories to put downward pressure on charter rates Ø Global Oil demand expected to grow at a slower pace 1.9% annually Ø US slowdown to impact US imports curbing cargo movements Ø Projected fleet growth in 2007 could surpass incremental
Slide 10: Dry bulk Carrier Market Outlook
Dry bulk Carrier Market Outlook Ø Chinese demand for Iron Ore expected to be strong Ø Slower tonnage growth will support demand resulting in strong rates Ø Drought in Australia to trigger longhaul grain movement from US & UK Ø 2008 Beijing Olympics could continue as a catalyst 10
Slide 11: Oil field services spectrum
Oil field services spectrum Seismic Studies Drilling: •Largely domesticated Exploratory & business •Tender driven Development Production 11
Slide 12: Industry Fundamentals – Offshore
Industry Fundamentals – Offshore Ø Energy security tops sovereign agenda Ø Reserve to accretion ratio depleting Ø Oil companies with huge cash surplus; E&P investments planned and committed Ø Buoyant demand and trickling tonnage growth resulting in surge in day rates 12
Slide 13: Offshore Services Market Outlook
Offshore Services Market Outlook ØExploration activity to remain buoyant ØStrong rig demand with increasing activity volume ØDeliveries for new offshore support vessels’ insufficient to meet demand ØDemand for larger vessels to increase over the next 3 years as drilling moves deeper 13
Slide 14: India's Energy Fact File
India’s Energy Fact File 6th largest oil consumer 2nd fastest growing market (112 mt per annum) (10 year CAGR at 6.1%) 7th largest oil importer Oil imports (US$38.7 bn in FY06) (77% of domestic consumption) contribute 47.20% of total imports ØIndia houses around 15% of World’s population & 0.5% of t
Slide 15: Company Profile
Company Profile Ø Incorporated on August 3, 1948 Ø More than five decades in shipping Ø 39 vessels all owned, transporting bulk commodities Ø 9 New building vessels on order Ø Rated “AAA” (Domestic Currency Debt) since 1996 Ø Demerged the offshore division on 16th October,2006 with the objective to
Slide 16: Share holding pattern as on 7th November, 2006
Share holding pattern as on 7th November,2006 FII 11% Govt & FI Public 12% 43% MFs 7% Pomoters 27% High liquidity; adequate floating stock 16
Slide 17: Business Profile
Business Profile The Great Eastern Shipping Co. Ltd Shipping Business Offshore Business Through wholly owned subsidiary Tanker Greatship (India) Ltd. Offshore oil field Support & Dry Bulk Logistics Services India’s largest private Global customer Strong sector shipping co base financials 17
Slide 18: Asset Profile
Asset Profile 39 vessels av. age 12.4 yrs. SHIPPING 2.77 mn dwt Crude (13) Product (15) Gas (2) Dry bulk (9) avg. age 9.58 yrs avg. age 17.51 yrs avg. age 23.03 yrs avg. age 15.1 yrs 1.71 mn dwt 0.64 mn dwt 0.05 mn dwt 0.38 mn dwt VLCC [1] Panamx [2] Panamax [1] Suezmax [4] Medium Range [7] Handymax
Slide 19: We manage our business through
We manage our business through: Øbroad based research Øcontinuous evaluation of fleet through judicious sale/purchase activities Øbenchmarking with global standards Øderisking Øthrough diverse asset base Ølong term employment 19
Slide 20: Performance over past five years
Performance over past five years (in Rs. Cr) 2500 2342* 40 37 2119 35* 35 31 2000 30 25 1500 1426 Revenue, PBIT 19 % RONW 19 1195 * 20 1060 1000 1007 874 15 539 10 500 303 285 5 0 0 FY 02 FY03 FY04 FY 05 FY06 Revenue PBIT RONW * Residual Company 20
Slide 21: Financial Comparison for FY 05-06
Financial Comparison for FY 05-06 Year on Year (in Rs. Cr.) FY 2004-05 FY 2005-06 % Change Total Income 2119 2342 10% EBIDTA 1159 1343 16% Interest 83 97 Depreciation 285 283 PBT 791 876 11% PAT* 809 839 4% * includes prior period adjustments 21
Slide 22: Financial Comparison Quarter on Quarter
Financial Comparison Quarter on Quarter (in Rs Cr) Q2 Q2 FY 2005-06 FY 2006-07 % Change (Unauditied ) (Reviewed) Total Income 471 593 26% EBIDTA 256 335 31% Interest 24 27 Depreciation 70 64 PBT 162 244 50% PAT* 156 235 51% * includes prior period adjustments 22
Slide 23: Historical NAV per share of GES
Historical NAV per share of GES Shipping Business 30-September-2006 Rs 400 30-June-2006 Rs 350 31-March-2006 Rs 335 31-December-2005 Rs 320 31-March-2005 Rs 300 23
Slide 24: Creating shareholder wealth
Creating shareholder wealth 23 years of uninterrupted dividend track record 12.00 37 37 38 11.22* 40 35 10.00 30 9.00 30 Rs.4 per 8.00 Share* 25 6.50 24 23 (Interim) Rs. Per Share 6.00 20 % 4.00 4.00 15 4.00 2.75 10 2.00 5 0.00 0 FY 00-01 FY 01-02 FY 02-03 FY 03-04 FY 04-05 FY 05-06 H1 FY06-07 Divid
Slide 25: Enhanced Customer Base
Enhanced Customer Base } att, © NV) Fortum € bp an 0 F I oa Pasi es ExonMobil a TrafiGura om © Og : 1: Quality Fuel Solutions 25
Slide 26: Corporate Action - Demerger
Corporate Action - Demerger Demerger Process (tentative) timeline around around 23rd –25th 23rd –25th November December GES will Relist GOL New Record Date Effective Date 15th – 16th with reduced listing with 16th October November equity of equity of Rs 152 Cr Rs 38 Cr Trading suspended on 8th Novem
Slide 27: Expanding through Subsidiary
Expanding through Subsidiary Offshore Business– Greatship (I) Ltd Ø 1 Platform Supply Vessel (PSV) currently operating in North Sea Committed Capex of around USD 380 Mn Ø 2 Secondhand PSVs to be delivered in Q2 FY 2006-07 and H2 FY 2007-08 resp. Ø 2 New Building PSVs delivery during Q2 and Q3 FY 200
Slide 28: GIL's road map
GIL’s road map Ø GES committed to invest USD 110 mn in equity over the next three years;already infused Rs 250 crores Ø Targeting 20% return on invested equity; strive to achieve target by FY 2009-10 Ø EPS accretive FY 2007-08 onwards Ø Growth envisaged through alliance with international players 28
Slide 29: Investment Positives
Investment Positives Diverse asset base with global operations Profitable through the cycle 23 yrs uninterrupted dividend track record Robust Balance Sheet Asia’s 3rd most Profitable Company 29
Slide 30: Thank You
Thank You Visit us at: www.greatship.com 30
The Great Eastern Shipping — Investor Presentation (November 2006) on 6ix