Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — Q1 2013 Earnings Presentation

31 slides from Pacific Basin Shipping's earnings presentation, Apr 18, 2013

  1. Slide 1: 18 April 2013

    Ee Pacific Basin

  2. Slide 2: 2013 First Quarter Highlights

    2013 First Quarter Highlights Pacific Basin Dry Bulk  PB Handysize vessel earnings outperformed the weak first quarter market  Spot market Handysize rates averaged US$6,530/day net 1Q13 Achieved 2Q-4Q13 Forward Cover PB Handysize US$8,820/day 50% at US$9,500/day PB Handymax US$9,930/day 68% at US$

  3. Slide 3: Pacific Basin Dry Bulk: Outperforming Weak Dry Bulk Market

    Pacific Basin Dry Bulk Outperforming Weak Dry Bulk Market As at 15 April 2013 Handysize Handymax  Our dry bulk business model 2Q-4Q Uncovered 41,000 facilitates a Revenue Days 34,010 14,610 2Q-4Q Covered valuable cargo Revenue Days * 11,200 Completed Revenue Days book Revenue Days *  Enables us to

  4. Slide 4: Dry Bulk Market Information

    Dry Bulk Market Information  Handysize spot market has followed a similar pattern to last year  A weak start giving way to improved rates going into the second quarter  Lowest quarterly average BDI since 1986  Average Handysize / Handymax daily market rates again exceeded average Capesize rates

  5. Slide 5: Nothing Wrong with Demand

    Nothing Wrong with Demand Dry Bulk Effective Demand 1Q 13 Chinese Minor Bulk Imports % change YOY M tonnes 25 14 20 12 10.0 20 10 9.0 8 7.2 15 15 6 4.1 2013 3.1 4 2012 10 2 2011 0 2010 5 -2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2008 2009 2010 2011 2012 1Q 2Q 3Q 4Q China imports of a basket

  6. Slide 6: Fleet Growth is Slowing but Still Oversupply

    Fleet Growth is Slowing but Still Oversupply Handysize Age Profile Looks Better (25,000-39,999 dwt) 2,120 vessels (68.2m dwt) on 1 Apr 2013  1Q13 net fleet growth: Handysize Dry Bulk overall 30+ years 1Q13 0% 1.6% 7% YOY 2% 8.4% 25 - 29 years 13%  Driven by 18m tonnes of new capacity in 1Q13 16 -2

  7. Slide 7: Dry Bulk Orderbook

    Dry Bulk Orderbook Handysize Orderbook 332 vessels (11.6m dwt) m Dwt 7 10%  Zero fleet growth for Handysize in 1Q– fully offset by scrapping 6  New orders for Capesize vessels increased significantly in 5 52% 1Q13, though ordering of other dry bulk ships fell 30%-55% YOY Shortfall 4 5% 5%  At 1 J

  8. Slide 8: Daily Vessel Costs - Handysize

    Daily Vessel Costs - Handysize As at 31 Dec 2012 Charter-hire Finance cost Depreciation Opex Owned* Chartered US$/day Daily charter hire rates & days 14,000 Blended US$8,910 (2011: US$9,930) 2013-2015 12,000 11,810 $10,800 $10,710 $9,460 10,000 9,340 8,200 8,000 7,710 960 1,000 6,270 9,380 5,700 6,0

  9. Slide 9: Pacific Basin Dry Bulk - Outlook

    Pacific Basin Dry Bulk - Outlook  Strong Chinese demand for minor bulk  Still excessive, but reduced, overhang of supply commodities + shipbuilding capacity  Global trade imbalances and fleet utilisation  Global economic recovery negatively impacted inefficiencies by further shocks relating to E

  10. Slide 10: PB Towage Doing Well In Australia

    PB Towage Doing Well In Australia PB Towage Fleet: 44 vessels 1Q13 Performance (as at 15 April 2013)  Seasonal, weather-related factors impacted our 1Q fleet utilisation during Australian monsoon  However, general levels of activity in Australian oil and gas sector continues to support strong util

  11. Slide 11: Towage Segment Operating Performance Before Overheads

    Towage Segment Operating Performance Before Overheads As at 31 Dec 2012 17.0% US$m 70 7.0% Operating performance US$55.3m 60 55.3 Direct overheads US$(17.6)m 50 40 32.3 Segment net profit US$37.7m 39.4 30 Operating cash flow US$52.1m 20 25.6 10 14.6 8.2 1.3 0 -10 -1.5 2011 2012 Offshore & Infrastruc

  12. Slide 12: PB Towage - Outlook

    PB Towage - Outlook  Growing project activity in Australasia and  Hesitation in global economy recovery and construction support both domestically in Chinese slowdown – impacting Australian Australia and internationally port activity  Increased exploration and production leading  Labour market s

  13. Slide 13: Balance Sheet

    Balance Sheet PB PB Discontinued US$m Dry Bulk Towage RoRo Treasury 31 Dec 12 31 Dec 11 Vessels & other fixed assets 1,057 208 - - 1,270 1,525 Total assets 1,292 273 131 745 2,470 2,432 Long term borrowings 301 31 - 599 931 779 Total liabilities 437 55 4 618 1,138 947 Net assets 855 218 127 127 1,33

  14. Slide 14: Borrowings and Capex

    Borrowings and Capex The Group had cash balances of US$753m, borrowings of US$931m and a net borrowings ratio of 14% against the Net Book Value of property, plant and equipment 250 230 As at 31 Dec 2012 215 Redeemable in Apr 2014 200 141 150 124 100 82 Redeemable in Apr 2016 69 60 69 50 34 35 37 27

  15. Slide 15: Cash Flow

    Cash Flow 2012 Sources and Uses of Group Cash Flow US$ m Operating cash flow US$148.7m 1,000 EBITDA US$145.1m +163.1 (excluding impairment) 900 800 +148.7 +47.8 +753.5 700 -195.4 -12.5 -16.4 +618.2 600 500 Opening Operating Increase in Capex Dividend Net Others Closing Cash cash borrowings paid Inte

  16. Slide 16: Our Position, Outlook and Strategy

    Our Position, Outlook and Strategy  Focus on our two core businesses – we are now out of most non-core activities Dry Bulk  Strong cargo and customer focused business model: outperforming market, outperforming larger ships  Expect the dry bulk market to remain weak overall in 2013 with seasonal v

  17. Slide 17: 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,

  18. Slide 18: Appendix: Pacific Basin Overview

    Appendix: Pacific Basin Overview  A leading dry bulk owner/operator of Handysize & Handymax dry bulk ships  Flexible Pacific Basin Dry Bulk business model  Large fleet of uniform, interchangeable, modern ships  Mix of owned and long-term, short-term chartered ships  Operating mainly on long ter

  19. Slide 19: How we create value

    Appendix: How we create value Our large, flexible Fleet Our strong corporate profile  Large scale, high-quality dry bulk fleet  Founded in 1987  Interchangeable nature provides flexibility  Strong balance sheet enhancing our to customers and ability to optimise profile as a preferred counterpart

  20. Slide 20: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Handysize and Handymax Cargo Volume 1Q13 Enerygy Agricultural Products Coal 5.0% Agricultural Products 3.5% Petcoke 6.7% 12% Grains 12.2% Fertiliser 7.2% 27% Sugar 3.7% Metals Alumina 3.5% 19% 10.6 Ores 8.6% Concentrates & other meta

  21. Slide 21: China at late-Industrialisation Stage

    Appendix: China at late-Industrialisation Stage Steel Consumption Per Capita Tons per Capita 1.0  China growth matches historical trend in Japan and Korea 0.9  Suggests strong growth in dry bulk 0.8 segment to remain for medium term 0.7  Similar trend for electricity and cement 0.6 0.5 0.4 0.3 0.

  22. Slide 22: China Dry Bulk Trade, Iron Ore & Coal Demand

    Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand Chinese Dry Bulk Trade Volume China Coal Import China Iron Ore Sourcing for Steel Production % of total dry m tonnes m tonnes m tonnes bulk trade 1,204 1,200 1,134 1,200 32% 400 +13% 29% +6% 28% 350 27% 323 1,000 26% 900 24% 24% 300 289 -2% 20%

  23. Slide 23: 2012 Annual Financial Highlights

    Appendix: 2012 Annual Financial Highlights US$ m 2012 2011 Segment net profit 74.5 89.5  Treasury (6.1) (12.8)  Discontinued Operations - RoRo (12.1) (10.6)  Non direct G&A (8.5) (8.3) Underlying profit 47.8 57.8  Unrealised derivative expenses (3.3) (1.6)  RoRo vessel impairment charge & excha

  24. Slide 24: Pacific Basin Dry Bulk

    Appendix: Pacific Basin Dry Bulk Handysize 2012 2011 Change Revenue days (days) 41,000 32,710 +25% TCE earnings (US$/day) 10,460 13,530 -23% Owned + chartered costs (US$/day) 8,910 9,930 +10% Handysize contribution (US$m) 62.0 115.2 -46% Handymax & Post Panamax (US$m) 12.6 (1.7) +841% Direct overhea

  25. Slide 25: Pacific Basin Dry Bulk - Handymax

    Appendix: Pacific Basin Dry Bulk - Handymax 2012 2011 Change Revenue days (days) 14,610 13,310 +10% TCE earnings (US$/day) 11,720 15,090 -22% Owned + chartered costs (US$/day) 11,240 15,390 +27% Handymax contribution (US$m) 6.7 (4.7) +243% Post Panamax contribution (US$m) 5.9 3.0 +97% Total contribu

  26. Slide 26: Daily Vessel Costs – Handymax

    Appendix: Daily Vessel Costs – Handymax Charter-hire As at 31 Dec 2012 Finance cost Depreciation Opex Owned Chartered US$/Day Blended US$11,240 (2011: US$15,390) Daily charter hire rates & days 20,000 2013-2015 15,590 3,500 $14,500 15,000 days $13,720 11,430 $11,510 10,000 8,560 8,550 3,750 1,360 3,

  27. Slide 27: PB RoRo

    Appendix: PB RoRo 2012 PB RoRo net loss US$(12.1)m (Excluding US$199m impairment and exchange loss) Operating cash flow US$3.1m  Considered a discontinued operation  Continued severe weakness in the RoRo sector impacted results and prospects for our RoRo business  Mid-year impairment and decision

  28. Slide 28: PB RoRo Impairment & exchange loss in 2012

    Appendix: PB RoRo Impairment & exchange loss in 2012  Euro-centric RoRo market severely impacted by protracted European debt crisis and macro-economic and political uncertainty significantly reduced demand for chartered RoRos  18 June, announced US$190m non-cash impairment and intention to exit Ro

  29. Slide 29: Capex and Combined Vessel Value

    Appendix: Capex and Combined Vessel Value As at 31 Dec 2012 A Combined View of Vessels Commitments Vessel Carrying Values and Commitments US$ m Total US$236m Total US$1,506m US$ m 240 215 1,600 200 1,400 1,298 1,200 236 160 102 1,000 189 120 800 80 600 113 400 873 21 208 40 200 21 208 0 0 2013 2014

  30. Slide 30: Convertible Bonds Due 2018

    Appendix: Convertible Bonds Due 2018 Issue size US$123.8 million Maturity Date 22 October 2018 (6 years) Investor Put Date and Price 22 October 2016 (4 years) at par PB’s Call Option 1) Trading price for 30 consecutive days > 130% conversion price in effect 2) >90% of Bond converted / redeemed / pur

  31. Slide 31: Convertible Bonds Due 2016

    Appendix: Convertible Bonds Due 2016 Issue size US$230 million Maturity Date 12 April 2016 (6 years) Investor Put Date and Price 12 April 2014 (4 years) at par Coupon 1.75% p.a. payable semi-annually in arrears on 12 April and 12 October Redemption Price 100% Initial Conversion Price HK$7.98 (Curren

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