1 23 Sep 2013
World’s Largest Handysize Bulker Owner/Operator Pacific Basin Dry Bulk Fleet Development 224 With a growing Handymax fleet No. of vessels on the water Listed in Hong Kong 155 US$1.3bill market cap (at 19 Sep 2013) Global geographically Diversified customers & cargo Focus & growth of core business, 08 09 10 11 12 13 exit non-core activities (As at Handysize 22 July) Handymax Post-Panamax 2 RS Platou – NY Shipping Conference
Why Handysize? Bulk Carrier Fleet Growth Index 350 deadweight basis, Sep 2003 = 100 pts 313 300 Modest Handysize fleet growth 269 Older age profile – higher scrapping 250 Capesize 100k+ 225 Robust minor bulk demand Panamax 65-100k 200 Handymax 40-60k A segment in which scale & Handy 10-40k operations make a difference 150 120 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 RS Platou – NY Shipping Conference
Cargo Contract Business Model Pacific Basin Handysize – Outperformance Compared to Market Large portfolio of cargo contracts – US$/day No outward timecharters 20,000 Large fleet of high-quality 15,000 substitutable ships $10,460 $9,290 High laden percentage 10,000 Model allows for both/either owning 5,000 or chartering in ships 0 Average premium last 5 years = 2009 2010 2011 2012 1H13 US$2,764/day PB Margin over BHSI BHSI - net rate 4 RS Platou – NY Shipping Conference
Why Secondhand Ships? Handysize Newbuilding* 10 year old* A slow steaming strategy Price 24 Mill 11 Mill Well designed secondhand Japanese TCE / day 11,000 10,500 ships remain operationally competitive Opex & dd / day 5,000 5,500 EBITDA / year 2.2 Million 1.8 Million 28 Depreciation / year 0.8 Million 0.5 Million 24 EBIT / year 1.4 Million 1.3 Million 20 EBIT / price 6% 12% 16 12 X Twice the return and 8 higher upside potential 4 10 25 Years * Japanese built ships - The 10-year old example is the ship we bought in September 2012 5 RS Platou – NY Shipping Conference
Taking Advantage of Strong Cash Position & Historically Low Prices Owned fleet of bulkers is growing from Pacific Basin Dry Bulk Owned Fleet 37 to 72 during 2013 No of Ships All ships acquired in past year are 72 80 Japanese 70 60 Access to Japanese export credit 50 financing 37 40 Balance sheet remains strong with net 30 gearing of 29% and cash of US$442 mil 20 10 1H2013 underlining profit of US$14 mil 0 (1H12: US$3mil) Beginning of End of 2013 2013 1H2013 EBITDA of US$59 mil (1H12: US$54mil) 6 RS Platou – NY Shipping Conference
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, uncertainties and other factors which may cause the actual results or performance of Pacific Basin to be materially different from any future results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding Pacific Basin's present and future business strategies and the political and economic environment in which Pacific Basin will operate in the future. Our Communication Channels: Financial Reporting Company Website - www.pacificbasin.com Annual & Interim Reports Corporate Information Voluntary quarterly trading updates CG, Risk Management and CSR Press releases on business activities Fleet Profile and Download Investor Relations: Shareholder Meetings and Hotlines financial reports, news & announcements, excel Analysts Day & IR Perception Study download, awards, media interviews, stock Sell-side conferences quotes, dividend history, corporate calendar and Investor/analyst calls and enquiries glossary Contact IR – Emily Lau Social Media Communications E-mail: elau@pacificbasin.com Follow us on Facebook, Twitter and Linkedin! ir@pacificbasin.com Tel : +852 2233 7000 7 RS Platou – NY Shipping Conference
2013 Interim Results – Group Highlights 1H13 1H12 US$3.2m Underlying Profit US$13.6m EBITDA US$59.4m US$53.7m Underlying Profit US$m Net Profit / (Loss) US$0.3m US$(195.9)m 13.6 Earnings per Share HK¢0.1 HK¢(79) Cash Position US$442.3m US$753.5m (31 Dec) 3.2 Group results were impacted by: 1H12 1H13 valuable cargo book & business model 32% outperformance + + 16-18% reduction in our daily vessel costs EBITDA + solid US$12.6m contribution from PB Towage weakest half-year dry bulk market since 1986 US$m 59.4 one-off US$6m lease break costs and exchange rate losses 53.7 Balance sheet remains healthy with substantial cash position: US$442m total cash and deposits 29% group net gearing 1H12 1H13 Acquired 27 dry bulk ships and long-term chartered another 9 YTD Fully-funded capital commitments of US$298m relating to 19 dry bulk ships No dividend for first half… …but will consider a payout based on the Group’s full -year performance 8 RS Platou – NY Shipping Conference
Pacific Basin Dry Bulk – 1H13 Performance 1H13 Handysize US$ million Handysize daily rate: US$9,290 (-12% YOY) Dry Bulk net profit 11.3 PB outperformed spot market by 32% Handysize contribution 22.4 Respectable performance reflects value of our industrial and Handymax contribution 4.3 customer-focused business model Direct overheads (18.3) EBITDA 50.7 Handymax Positive contribution in 1H13 – Turned around our 1H2012 loss Return on net assets 3% (annualised) Handymax daily rate: US$10,570 (-14% YOY) PB outperformed spot market by 28% Now benefiting from lower vessel costs due to: - less expensive charters - increased number of lower-cost, owned Handymax ships Post-Panamax 2 Post-Panamax ships continue to operate satisfactorily under long-term charters Further investment in dry bulk Since September 2012, we have acquired: 27 Handysize ships 4 Handymax ships (25 secondhand & 6 newbuildings) 9 RS Platou – NY Shipping Conference
Pacific Basin Dry Bulk Earnings Cover as at interim results announcement date Handymax Handysize Uncovered 39,800 16,420 Strong dry bulk Days Days Covered business model 33,060 1H Completed Days enables us to 28,740 10,680 2H Revenue Days Days 66% 2H 64% outperform the US$9,350 Days US$10,060 2H 64% spot market: US$11,710 83% 2H 6,430 23,740 days US$12,520 av. BHSI: $7,060 9,050 days Days 19,210 days 6,940 days 100% 100% av. BSI: $8,270 100% 100% US$10,570 US$9,290 US$10,540 US$11,520 21% 31% US$10,500 US$12,370 2012 2013 2014 2012 2013 2014 Pacific Basin Dry Bulk Fleet: 246 (on the water: 224) average age of core fleet: 6 years old PB Dry Bulk Fleet Development No. of vessels on water Chartered Owned Total Last year 224 31 Dec 2012 Delivered Newbuilding Delivered Newbuilding 22 July 2013 155 Handysize 56 1 8 101 10 175 134 10 1 55 Handymax 3 1 69 51 Post-Panamax 1 0 1 0 2 2 08 09 10 11 12 13 Total 67 11 157 11 246 187 (As at Handysize 22 July) Handymax 1 Including recent secondhand acquisitions of 5 Handysize and 1 Handymax vessels not yet delivered Post-Panamax 10 RS Platou – NY Shipping Conference
Dry Bulk Market Information Continued oversupply of larger ships impacted freight rates across all dry bulk segments Lowest half-year average BDI since 1986 Handysize and Handymax freight rates significantly outperformed rates for larger Capesize ships Increased buying interest and owners’ reluctance to sell vessels supported higher secondhand ship values 5 year old Handysize value: US$18m (increase 13% since 2H2012) Price difference between secondhand and newbuilding narrowing Handysize Vessel Values Baltic Handysize Index (BHSI) & Baltic Supramax Index (BSI) US$ Million US$/day net* 60 14,000 9 Sep 13: Handymax average 50 12,000 market spot rate: BSI: US$8,270 net US$9.586 10,000 40 9 Sep 13: 8,000 Newbuilding: 30 US$21.75m BHSI: 6,000 US$7,344 20 4,000 Handysize average market spot rate: Secondhand: 10 US$7,060 net 2,000 US$18m 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 5-year old second hand (32,000dwt) * US$ freight rates are net of 5% commission Newbuilding (35,000dwt) 11 RS Platou – NY Shipping Conference Source: Clarksons, The Baltic Exchange
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