Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Kotak Conference 2018
40 slides from Great Eastern Shipping's conference presentation, Sep 25, 2018
Slide 1: Business Review - Kotak Conference
BUSINESS REVIEW KOTAK CONFERENCE 24th-25th September 2018
Slide 2: Company’s
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 directions, prospects and f
Slide 3: Corporate Profile
CORPORATE PROFILE Offshore Shipping (Bulk) (Through wholly-owned subsidiary Greatship (India) Limited) Tankers • Crude Dry Bulk Logistics Drilling • Products/LPG India’s largest private sector shipping company; Over 70 years of experience 3
Slide 4: Shareholding Pattern
FII/FPI 21% Promoters 30% Govt./FI SHAREHOLDING 22% PATTERN Public 20% Shareholding Pattern as on 30 June 2018 4
Slide 5: Fleet Profile
SHIPPING FLEET Fleet DWT Number of Ships Average Age (Yrs.) PROFILE Crude Carriers 1,608,683 12 13.00 Product Carriers 987,207 17 10.91 Gas Carriers 273,466 6 18.38 Dry Bulk Carriers 1,106,942 14 5.99 Total 3,976,298 49 10.90 OFFSHORE Fleet Number of Units Average Age (Yrs.) Jack Up Rigs 4 6.94 Plat
Slide 6: Business Philosophy
BUSINESS PHILOSOPHY
Slide 7: 4 Keys to Our Success
4 KEYS TO OUR SUCCESS In-House Dynamically Strong Diversified technical & managing balance Fleet commercial cycles sheet management 7
Slide 8: Strength & Flexibility
STRENGTH & FLEXIBILITY Strong Cash & Liquidity Position Low cost of debt capital & strong relationship with lenders Sales & Purchase: Capability to execute in secondhand/newbuilding market Stringent adherence to Risk Management policies 8
Slide 9: Net Debt/Equity & Total Capital Employed (Consolidated)
NET DEBT/EQUITY & TOTAL CAPITAL EMPLOYED (CONSOLIDATED) USD Mn 3,000 0.80 0.70 2,500 0.60 2,000 0.50 1,500 0.40 0.30 1,000 0.20 500 0.10 - 0.00 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY
Slide 10: Dividend/Share (30+ Years Continuous Dividend)
- 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 INR/Share FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 DIVIDEND/SHARE FY2002 Dividend/Share FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 Dividend Yield (RHS) FY2011 FY2012 FY2013 FY2014 FY2015 (30+ YEARS CONTINU
Slide 11: ROE & ROCE (Consolidated)
ROE & ROCE (CONSOLIDATED) 50% Average ROCE: 12% 40% 30% Average ROE: 17% 20% 10% 0% -10% -20% ROCE (Consolidated) ROE (Consolidated) Average ROCE Average ROE 11
Slide 12: Timing the Sales & Purchase of Vessels
TIMING THE SALES & PURCHASE OF VESSELS Sales & Purchase (Crude Oil Tankers) vs Suezmax 5 year old 110.00 100.00 90.00 80.00 70.00 60.00 50.00 Invested $247 Mn for 40.00 12 Crude Oil Tankers Invested $144 Mn for 5 Crude Oil Tankers 30.00 Apr-16 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09
Slide 13: Timing the Sales & Purchase of Vessels
TIMING THE SALES & PURCHASE OF VESSELS Sale & Purchase (Product Tankers) Vs MR 5 year old 55.00 $104 Mn realized on sale of 3 GP 50.00 and 2 MR Tankers 45.00 40.00 35.00 30.00 25.00 20.00 Apr-05 Apr-02 Apr-03 Apr-04 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17
Slide 14: Timing the Sales & Purchase of Vessels
TIMING THE SALES & PURCHASE OF VESSELS Sale & Purchase (DryBulk) Vs Capesize 5 year old 100.00 85.00 70.00 55.00 40.00 Invested $85 Mn for 5 Dry Bulk Carriers 25.00 10.00 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Panamax Dr
Slide 15: Shipping Market
SHIPPING MARKET
Slide 16: Tankers – Asset Price Movement
TANKERS – ASSET PRICE MOVEMENT (5-YEAR OLD) Suezmax Aframax MR 100 90 80 Ship Price (in million $) 70 60 50 40 30 20 10 0 Crude Tanker asset prices marginally improved compared to CY2017. Whereas, Product Tankers asset prices have improved 10% compared to CY2017. 16 5 Source – Industry Reports
Slide 17: Crude Oil Supply & Demand
CRUDE OIL SUPPLY & DEMAND Supply Demand Refinery Throughput (RHS) 101 82 million barrels per day 99 81 97 80 million barrels per day 95 79 93 78 91 77 89 76 87 75 85 74 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2016 2016 2016 2017 2017 2017 2017 2018 2018 In Q2CY18 refining throughput growth wa
Slide 18: Crude & Product Growth
CRUDE & PRODUCT GROWTH Majority of the demand growth is fuelled by positive growth in OECD Americas & Non-OECD Asia. 18 5 Source – Industry Reports
Slide 19: Crude Inventories
CRUDE INVENTORIES Total Crude Inventories (Mn barrels) min range 2018 2017 5yr avg. (17-13) 5yr avg. (16-12) 1650 1600 1550 1500 1450 1400 1350 1300 1250 1200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Crude Inventories in 2018 is amongst the lowest in last five years due to high stock draws. 1
Slide 20: Crude Oil Imports (US & China)
CRUDE OIL IMPORTS (US & China) 2015 2016 2017 2018 2015 2016 2017 2018 8,800 10,000 China Crude Oil total Imports (‘000 bpd) 8,600 9,500 US Crude Oil total Imports (‘000 bpd) 8,400 9,000 8,200 8,500 8,000 8,000 7,500 7,800 7,000 7,600 6,500 7,400 6,000 7,200 5,500 7,000 5,000 Jan Mar May Jul Sep Nov
Slide 21: Crude Oil Exports (US)
CRUDE OIL EXPORTS (US) 2015 2016 2017 2018 US Crude Oil total Exports (‘000 bpd) 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec In 2018, US significantly increased their crude oil exports due to margins improvement and high crude production 21
Slide 22: World Fleet Growth Crude Tankers
WORLD FLEET GROWTH CRUDE TANKERS Tanker Fleet (mn Dwt) 20-Jul-18 1-Jan-18 1-Jan-17 1-Jan-16 1-Jan-15 1-Jan-14 VLCC 223.88 225.10 213.80 200.00 193.75 186.13 Suezmax 81.80 80.60 74.60 71.09 69.68 68.43 Aframax 67.07 67.20 66.40 64.37 64.15 63.71 Total 378.23 378.90 355.00 335.46 327.58 318.27 Order B
Slide 23: World Fleet Growth Product Tankers & VLGC
WORLD FLEET GROWTH PRODUCT TANKERS & VLGC Product Fleet (mn Dwt) 20-Jul-18 1-Jan-18 1-Jan-17 1-Jan-16 LR2 37.95 36.60 33.50 30.10 LR1 26.65 26.51 25.20 24.00 MR/Handy (35k+) 82.86 82.40 80.40 76.70 Total 150.31 147.61 139.40 130.80 Order Book(mn Dwt) 2018 2019 2020+ Total Orderbook as % of current 3
Slide 24: Bulker Asset Prices
BULKER ASSET PRICES 5-YEAR OLD Capesize Panamax Supramax 100 80 Ship Price (in million $) 60 40 20 0 Dry Bulk asset prices on average rose by about 7% in Q22018 compared to Q22017. In Q2CY2018, Capesize prices have increased marginally. 24 5 Source – Industry Reports
Slide 25: Baltic Dry Index
BALTIC DRY INDEX 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 Jul-13 Jan-14 Apr-14 Jul-14 Jan-15 Apr-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Apr-16 Apr-17 Apr-18 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Baltic Dry Index hits 4.5 year high of 1,774 in Jul’18 from a low of 291 in Feb’
Slide 26: China Iron Ore & Steel Production
CHINA IRON ORE & STEEL PRODUCTION World Steel China Steel % Growth World % Growth China 1800 16% 14% Steel Production (in Million tonnes) 1600 1400 12% 1200 10% 8% 1000 6% China Steel Production 800 4% increased 6% in 600 2% 400 H1CY2018 Y-O-Y 0% 200 -2% 0 -4% 2013 2014 2015 2016 2017 H1 2017 H1 201
Slide 27: China Coal Imports
10.0 12.0 0.0 2.0 4.0 6.0 -6.0 -4.0 -2.0 8.0 Mn Tonnes Jun-16 Jul-16 Aug-16 Sep-16 Source – Industry Reports Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 CHINA COAL IMPORTS Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 China coal imports change (Y-O-Y) Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-1
Slide 28: World Fleet Growth Dry Bulk
WORLD FLEET GROWTH DRY BULK Fleet(in mn Dwt) 20-Jul-18 1-Jan-18 1-Jan-17 1-Jan-16 Capesize 330 324 315 309 Panamax 205 202 196 195 Handymax 199 196 189 180 Handysize 97 96 94 93 Total 831 818 794 776 Orderbook 2018 2019 2020 2021+ Total (mn Dwt) Orderbook 2% 4% 3% 1% 9.6% (%Fleet) Slippage 32% (YTD
Slide 29: Scrapping
SCRAPPING Fleet Vessel Scrapping(% of beginning world fleet) (mn Dwt) Category 19 July 18 2018 (YTD) 2017 2016 2015 2014 Crude 378.35 3.40% 2.35% 0.35% 0.23% 1.60% Product 150.31 1.01% 1.42% 0.62% 0.61% 1.19% Dry Bulk 831.00 0.27% 1.77% 3.67% 4.03% 2.25% High Scrapping for Tankers, and very low for
Slide 30: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary)
Slide 31: Offshore Business Fleet Profile
OFFSHORE BUSINESS FLEET PROFILE Fleet Utilization Current Owned Fleet Extent of coverage of Fleet Count Category fleet's operating Type days (FY19) Jack Up Rigs (350ft) 4 PSV 60% Platform Supply Vessels (PSV) 4 Anchor Handling Tug cum ROVSV 66% 8 Supply Vessels (AHTSV) AHTSV 88% Multipurpose Platfor
Slide 32: Key Points on E&P Markets Q2 CY2018
KEY POINTS ON E&P MARKETS Q2 CY2018 Day Rates • Day rates for both AHTSV & PSV have come off by ~ 45%-50% since 2014 • Rigs: Total fleet has reduced by about 3% during the quarter due to Fleet scrapping of cold stacked rigs and limited new building deliveries. The Growth effective marketed supply ha
Slide 33: Offshore E&P Spending
OFFSHORE E&P SPENDING According to various industry reports, after the sharp fall over last 3 years, the E&P spending is expected to further decline, albeit marginally, in 2018 Source – Industry Reports 33
Slide 34: Global Fleet Supply Offshore
GLOBAL FLEET SUPPLY OFFSHORE Fleet & Orderbook Number Jackup Rigs AHTSVs PSV Current Fleet 516 2055 1638 Orderbook 91 93 136 O/B to current fleet 17.6% 4.5% 8.3% • Q2CY2018 actual deliveries have been far lower than scheduled. Due to bleak employment scenario owners have refrained from taking delive
Slide 35: Financial Highlights Q1 FY19
FINANCIAL HIGHLIGHTS Q1 FY19 35 5
Slide 36: Financial Highlights
FINANCIAL HIGHLIGHTS GE Shipping Q1FY19 consolidated Net Loss at Rs. 245.08 Crore Standalone Key Figures Consolidated Q1 FY19 Q1 FY18 (Amount in Rs. Crs) Q1 FY19 Q1 FY18 Income Statement 677.27 506.88 Revenue (including other income) 876.44 777.16 (14.13) 274.01 EBITDA (including other income) 84.56
Slide 37: Financial Highlights
FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated Q1 FY19 Q1 FY18 Q1 FY19 Q1 FY18 Key financial figures -2.09% 54.06% EBITDA Margin 9.65% 55.17% -18.24% 5.57% Return on Equity (ROE) * -14.34% 5.70% -5.94% 6.27% Return on Capital Employed (ROCE) * -3.53% 5.87% 0.90 0.85 Gross Debt/Equity Ratio
Slide 38: Financial Highlights
FINANCIAL HIGHLIGHTS Breakup of Revenue Days Revenue Days Q1 FY19 Q1 FY18 Owned Tonnage 4,190 3,998 Inchartered Tonnage 56 77 Total Revenue Days 4,246 4.074 Total Owned Tonnage (mn.dwt) 3.97 3.80 Average TCY Details Mix of Spot & Time Average (TCY $ per day) Q1’FY19 Q1’FY18 % Change Days (in %) Q1’F
Slide 39: Investment Case
INVESTMENT CASE Long term history of reading the cycles along with proven capability to time the cycles Low leverage, strong liquidity gives the ability to ride out the bad markets Cost of debt among the lowest in the industry We are in the top 10th percentile of worldwide listed shipping companies
Slide 40: Thank You
THANK YOU visit us at www.greatship.com 40