Company Presentation September 2017
Safe Harbor Statement This document may contain forward- looking statements that reflects management’s expectations for the future. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. 2
Investment Highlights ✓ • Fleet has an average of 1.66 years Youngest ECO dry bulk fleet ✓ • Strong cash position, $149.3 m as of Q2-17 Industry leading balance sheet • Low financial leverage ✓ • Restriction on payments of dividends lifted First dry bulk company to • No unattractive legacy terms and conditions on financing reinstate full amortization ✓ • 52 out of 52 vessels fitted with ballast water treatment systems Compliant with future regulatory • Fuel efficient vessels suitable for new low sulfur fuel regulation requirements • Lowest orderbook as a % of fleet since 2002 ✓ • Limited newbuilding orders & continued scrapping of older Favorable supply dynamics tonnage ✓ • Dry bulk seaborne demand expected to grow 3.4% in 2017 Positive demand outlook ✓ • Six sequential quarters increase in reported TCE earnings Positive rate environment 3
Company Overview Fleet Profile Key Facts Scorpio Bulkers Inc. (“Scorpio” or the “Company”) owns and Owned TC/BB Chartered-In 40 operates dry bulk vessels 35 1 • Founded in March 2013 by the senior management team 30 of the Scorpio Group 25 • Company currently owns 52 dry bulk ‘Eco’ vessels and 20 1 time charters in two vessels 34 15 • NYSE-compliant governance and transparency, listed 10 18 under the ticker “SALT” 5 • Headquartered in Monaco, incorporated in the Marshall 0 Ultramax Kamsarmax Islands and is not subject to US income tax Scorpio Average Age vs. Worldwide Fleet • Scorpio has access to Scorpio Group’s customer and supplier relationships as well as technical and commercial Scorpio Bulkers Active Fleet management 8.5 9.0 8.0 • Scorpio’s strategy is to: 8.0 • Own and operate the latest generation of fuel 7.0 efficient dry bulk vessels built at quality shipyards 6.0 5.0 • Operate vessels in the spot market through the 4.0 Scorpio Ultramax and Scorpio Kamsarmax pools 3.0 • Maintain a strong balance sheet in the current 1.7 1.5 2.0 difficult operating environment 1.0 0.0 Handymax Panamax 4
Company Profile Current Shareholders Market Cap ($m) $1,000 # Ownership Holder 1 17.9% Scorpio Services Holding Limited $800 2 17.0% Grm Investments Ltd 3 8.4% Evermore Global Advisors, LLC $600 4 5.5% Raging Capital Management, LLC 5 BlackRock Fund Advisors 3.2% $400 6 Q Investments 2.1% 7 Anchorage Capital Group, LLC 1.7% $200 8 Impala Asset Management, LLC 1.7% 9 Warlander Asset Management, LP 1.6% $0 10 Royce & Associates, LP 1.3% Golden Star Bulk Scorpio Genco Eagle Bulk Diana Navios Ocean Bulkers Partners Stock and Bond Price Performance Trading Liquidity ($m/day) $8 Share Price (LHS) Senior Notes (RHS) $10 $26 $9 $25 $6 $8 $24 $7 $23 $4 $6 $22 $5 $21 $2 $4 $20 $3 $2 $19 $0 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Star Bulk Scorpio Golden Diana Eagle Bulk Navios Genco Bulkers Ocean Partners 5 Source: Fearnley Securities September 25th, 2017
Quarterly Time Charter Rates • Six sequential increases in reported TCE earnings for Ultramax and Kamsarmax vessels supports continued market recovery $10,000 $9,273 $9,164 $9,005 February 10, $8,749 $9,000 2016 BDI hits $8,360 $8,230 40 year low $8,000 $7,401 $7,238 $7,083 $7,000 $6,349 $6,000 $5,335 $5,263 $5,000 $4,000 $3,462 $3,331 $3,000 $2,000 $1,000 $0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17* Ultramax Kamsarmax 6 * Projections based on 56% and 50% of the days for the Ultramax fleet and Kamsarmax fleet, respectively as of July 24 th 2017
Financial Snapshot Revenue EBITDA $37.7 $40 $15 $10.9 $34.7 $10 $35 $7.0 $5 $30 $0.9 $26.8 $23.9 $0 $25 -$1.3 -$5 $20 $17.4 -$5.8 -$10 $15 $10.2 -$15 $10 -$20 -$17.0 $5 -$25 $0 -$30 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Operating Cash Flow EBIT $0 $5 $2.5 $0 -$5 -$4.7 -$1.7 -$5 -$2.1 -$10 -$4.5 -$8.5 -$10 -$15 -$14.1 -$15 -$16.2 -$20 -$19.2 -$20 -$18.1 -$25 -$25 -$30 -$30 -$27.5 -$28.8 -$35 -$35 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 7 Figures in $USD millions.
Financial Performance P&L FY 2016 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Revenues 78.4 10.2 17.4 23.9 26.8 34.7 37.7 EBITDA (23.1) (17.0) (5.8) (1.3) 0.9 7.0 10.9 EBIT (78.3) (28.8) (19.2) (16.2) (14.1) (8.5) (4.7) Net Income (99.9) (33.4) (24.7) (21.3) (20.6) (16.4) (13.4) Balance Sheet FY 2016 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Total Assets 1,547.2 1,466.9 1,522.2 1,553.1 1,547.2 1,563.1 1,532.2 PP&E 1,414.1 1,183.3 1,244.8 1,318.3 1,414.1 1,363.5 1,352.5 Cash 101.7 230.2 241.7 200.9 101.7 126.6 149.3 Equity 956.6 941.5 989.0 972.7 956.6 926.0 916.2 Debt 579.5 510.0 523.4 570.8 579.5 628.2 606.3 Cash Flow FY 2016 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Cash from operations (52.2) (27.5) (18.1) (4.5) (2.1) (1.7) 2.5 Cash from investing (235.4) 22.6 (23.0) (128.5) (106.4) (22.4) (1.5) Cash from financing 189.0 34.8 97.8 47.0 9.3 49.0 (23.1) 8 Figures in $USD millions.
Market Update 9
Dry Bulk Seaborne Demand 2009-2017 Iron Ore Coal Grains Minor Bulks Total Dry Bulk CAGR 6.5% 4.9% 6.0% 3.9% 5.0% Iron Ore Coal Grain Minor Bulk 5,074 4,895 4,829 4,833 5,000 4,588 4,342 4,080 3,844 4,000 Million Tonnes 3,429 3,000 2,000 1,000 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 (f) 10 Source: Clarksons Research Services, September 2017
Cargo Carriage - 1H 2017 Ultramax Cargo Breakdown Kamsarmax Cargo Breakdown Argribulks, 4.1% Iron Ore, 5.2% Others, 1.4% Metals & Minerals, Iron Ore, 7.8% 8.2% Metals & Minerals, 27.4% Steel Products, 13.0% Forest Products, 12.3% Coal, 55.8% Grain, 13.7% Grain, 18.2% Coal, 19.2% Steel Products, 13.7% 11
New Sulfur Emission Regulations from 2020 • Scrubbers can cost $3-$10 million to install depending on the size of the ship (1) • Modern fuel efficient ships have a competitive advantage over older tonnage through lower fuel consumption – ‘ECO Ships’ make a difference. • Increase in scrapping expected as the cost to equip older tonnage with scrubbers can exceed the scrap value of the vessel and Historical FO & MGO Prices ($/MT) (1) $1,200 $1,000 $800 $600 $400 $200 $0 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Rotterdam Singapore Houston 12 Source: Clarksons Research Services/Ocean Connect September, 2017
Recommend
More recommend
