jinhui shipping & transportation limited 2009 q1 presentation · 2009 q1 presentation may 29,...
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Jinhui Shipping &Transportation Limited
2009 Q1 Presentation
May 29, 2009
Jinhui Shipping &Transportation Limited
2009 Q1 Presentation
May 29, 2009
2
Forward Looking Statements
This presentation may contain forward looking statements. These statements are based uponvarious assumptions, many of which are based, in turn, upon further assumptions, including theCompany’s management's examination of historical operating trends. Although the Companybelieves that these assumptions were reasonable when made, because assumptions are inherentlysubject to significant uncertainties which are difficult or impossible to predict and are beyond itscontrol, the Company cannot give assurance that it will achieve or accomplish these expectations,beliefs or targets.
Key risk factors that could cause actual results to differ materially from those discussed in thispresentation will include but not limited to the way world economies, currencies and interest rateenvironment may evolve going forward, general market conditions including fluctuations in charterrates and vessel values, counterparty risk, changes in demand in the dry bulk market, changes inoperating expenses including bunker prices, crewing costs, drydocking and insurance costs,changes in governmental rules and regulations or actions taken by regulatory authorities, potentialliability from pending or future litigation, general domestic and international political conditions,potential disruption of shipping routes due to accidents, piracy or political events, and otherimportant factors described from time to time in the reports filed by the Company.
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Q1 2009 Highlights
Q1 2009 revenue dropped 28% to US$82.6 million
Gearing ratio as at 31 March 2009 : 66%
Disposed 2 Supramaxes at a total consideration of US$60 million
Net profit slightly increased to US$50.4 million as compared to US$43.3 million in Q1 2008
2 newly built Supramaxes and 1 second hand Supramax were delivered
Basic EPS increased from US$0.6002 to US$0.5154
Financial Highlights
Fleet Highlights
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Financial highlights
Revenue 82,565 114,778 -28.1%
Operating profit 53,303 48,966 8.9%
EBITDA 61,260 56,294 8.8%
Net profit for the period 50,445 43,319 16.5%
Basic earnings per share US$0.6002 US$0.5154 16.5%
Q1 2008
(Unaudited)
Q1 2009
(Unaudited)QoQ (%)
For the 3 months ended 31 March 2009
US$'000
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Key financial ratios
Total assets (US$’000) 1,112,492 951,453
Return on average equity (%) 9.3% 12.9%
Return on average asset (%) 4.7% 4.9%
Interest coverage (X) 18.7X 8.7X
EBITDA / Finance costs (X) 21.4X 10.0X
Q1 2009
(Unaudited)
Q1 2008
(Unaudited)
Net gearing (%) * 66.3% 143.1%
* = Total interest bearing debts - bank balances and cash -marketable securities shareholders equity
For the 3 months ended 31 March 2009
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Jinhui’s fleet - one of the youngest in the industryOwned vessels
Current Fleet Type Size (dwt) Year Built Status Shipyard
1 Jin Tai Capesize 173,880 2004 Owned Waigaoqiao2 Jin Rui Panamax 76,583 2009 Owned Imabari3 Jin He Panamax 77,250 2006 Owned Oshima4 Jin Wan Supramax 56,897 2009 Owned Shanghai Shipyard5 Jin Shun Supramax 54,768 2009 Owned Oshima6 Jin Sui Supramax 56,968 2008 Owned Shanghai Shipyard7 Jin Tong Supramax 56,952 2008 Owned Shanghai Shipyard8 Jin Man Supramax 55,496 2008 Owned Oshima9 Jin Pu Supramax 55,496 2008 Owned Oshima
10 Jin Yuan Supramax 55,496 2007 Owned Oshima11 Jin Yi Supramax 55,496 2007 Owned Oshima12 Jin Xing Supramax 55,496 2007 Owned Oshima13 Jin Sheng Supramax 52,050 2006 Owned IHI14 Jin Yao Supramax 52,050 2004 Owned IHI15 Jin Cheng Supramax 52,961 2003 Owned Oshima16 Jin Kang Supramax 52,454 2003 Owned Tsuneishi17 Jin Quan Supramax 51,104 2002 Owned Oshima18 Jin Ping Supramax 50,777 2002 Owned Oshima19 Jin Fu Supramax 50,777 2001 Owned Oshima20 Jin Li Supramax 50,777 2001 Owned Oshima21 Jin Zhou Supramax 50,209 2001 Owned Mitsui22 Jin An Supramax 50,786 2000 Owned Oshima23 Jin Hui Supramax 50,777 2000 Owned Oshima24 Jin Rong Supramax 50,236 2000 Owned Mitsui25 Jin Bi Handymax 48,220 2000 Owned Oshima
As of 28 May 2009
Total Capacity of Owned Vessels: 1,493,956 dwtAverage Age: 4.48 years
To bedisposed
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10 Daehan #1* Capesize *170,500 2008 Nov-08 Dec-13
11 Daehan #2* Capesize *170,500 2009 Jan-09 Apr-14 Delayed
Jinhui’s fleet - one of the youngest in the industry
As of 28 May 2009
Total Capacity of Chartered-in Vessels: 934,139 dwt (exclude * Daehan#1 & 2)Average Age: 3.4 years
Name of Vessel Type Size (dwt) Year Built Charter in date ExpiryExpiry After
OptionPurchaseOption
1 Scope Capesize 174,008 2006 Jul-08 Apr-132 Channel Alliance Capesize 171,978 1996 Nov-07 Oct-093 Golden Shui Capesize 170,500 2009 May-09 Feb-144 Golden Sakura Panamax 76,662 2007 Aug-07 Jul-095 Golden Kiji Panamax 76,662 2007 Nov-07 Oct-096 Red Lily Panamax 76,500 2004 Sep-04 Jul-09 Sep-117 CMB Sakura Panamax 75,765 2006 May-08 Sep-098 Tenmyo Maru Supramax 58,470 2008 Nov-08 Oct-139 Thermidor Supramax 53,594 2007 Mar-08 Aug-09
Chartered-in vessels
Assuming the Group will not exercise the options to charter-in the vessel during the optional periods, if any.
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Jinhui’s fleet - capacity at a glance
Capacity of owned vessels
- 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
2009
2010 (E)
2011 (E)
2012 (E)
2013 (E)
DWT
Capesize Post-Panamax Panamax Supramax Handymax & Handysize
Our strategy: Maintain a young and modern fleet to serve our customers
Estimated number of owned vessels by 2013 : 44 vessels; average age : 6 years
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Capital expenditure
44.6
169.3
16.3
4.6
13.8
91.7
53.7
174.7
11.1
78.5
9.2
22.9
-
50.0
100.0
150.0
200.0
250.0
2009 2010 2011 2012 2013 Year
US$ (m) 2009 Delivery 2010 Delivery 2011 Delivery 2012 Delivery 2013 Delivery
As of 29 May 2009, capital expenditure represented 21 vessels including 2 Post-Panamaxes, 1 Panamax,17 Supramaxes and 1 Handysize to be delivered to the Group in year 2009 to 2013.
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1,167
2,353
7,200
1,283991
7,441
720360
4,770
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Capesize Panamax Supramax & Handymax
Nu
mbe
r of
Day
s
2008 2009 (E) 2010 (E)
100% 80%
97%
100%
86%
89%
67%
49%
50%
Contract coverage of Owned and Chartered-in vessels
Covered days 2009 -2010 forecast
Over 80% contractcoverage for year 2009
Approx. 50% contractcoverage for year 2010
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US$5,662US$6,385
US$3,543US$3,659
US$1,477US$2,371
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 Q1 2009
US$ Opex Depreciation Finance Costs
US$ 11,521US$ 11,575
Daily cost of owned vessels
Keep Lowdaily cost ofowned vessels
Daily cost = Operating expenses (crew expenses, insurance, dry-docking written off, consumablestores, spare parts, repairs and maintenance and excluding provision for impairment loss on tradereceivables) + Depreciation + Finance costs
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Breakdown of cargo type
* Including steaming coal and coking coal
Total cargo volume for both owned and chartered-in fleet
Cargo Volume Q1 2008
12%3%
59%
18%
3% 3%2%
Cargo Volume Q1 2009
53%
26%
10%3%
8%
Minerals Coal* Agricultural Products Steel Products Fertilizer Cement Alumina Others
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Breakdown of cargo typeCargo by volume Q1 2009 vs Q1 2008
* Including steaming coal and coking coal
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Minerals Coal* AgriculturalProducts
SteelProducts
Fertilizer Cement Alumina
Tonn
es
Q1 2009 Q1 2008
14
Turnover breakdown by geographyFor the 3 months ended 31 March 2009
Loading Port Analysis Q1 2009 vs Q1 2008
0
20
40
60
80
100
120
140
160
Asia ex
cludin
g Chin
aAust
ralia
Africa
China
Euro
peNor
th A
mer
icaSou
th A
mer
ica
Other
s
Mill
ion
Tonn
es
Q1 2009 Q1 2008
15
Turnover breakdown by geography
For the 3 months ended 31 March 2009
Discharging Port Analysis Q1 2009 vs Q1 2008
0
10
20
30
40
50
60
Asia ex
cludin
g Chin
aAust
ralia
Africa
China
Euro
peNor
th A
mer
icaSou
th A
mer
ica
Other
s
Mill
ion
Tonn
es
Q1 2009 Q1 2008
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Turnover breakdown by geographyTotal cargo volume by loading ports and discharging ports
Loading ports analysis - Q1 2009
43%
18%
4%
4%
3%
13%
15%
Asia excluding China Australia Africa China Europe North America South America Others
Discharging ports analysis - Q1 2009
14%
4%
58%
10%3%
1%
10%
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Owned and Chartered-in Fleet- revenue covered:
32,05426,786US$Daily TCE
4,7707,441DaysOperating daysSupramax/HandymaxFleet
38,20022,488US$Daily TCE
3601,283DaysOperating daysPanamax Fleet
83,70486,528US$Daily TCE
720991DaysOperating daysCapesize Fleet
20102009Unit
6780%Coverage
50
4989%Coverage
86%Coverage
The above operating statistic included considerable changes since last quarter 2008. These changes arelargely due to counterparties’ defaults which are beyond the Company’s prediction and control.
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36,00040,800US$Daily TCE cost
365665DaysOperating daysSupramax/HandymaxFleet
N/A29,034US$Daily TCE cost
N/A899DaysOperating daysPanamax Fleet
40,75050,319US$Daily TCE cost
730883DaysOperating daysCapesize Fleet
20102009Unit
Daily cost of chartered-in vessels
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Outlook remains to be challenging
MACRO PICTURE
SHIPPING/FREIGHT MARKET
Risk of cheap newbuilding offerings down the road, due to excess shipbuilding capacity (China & Koreain particular)
Credit market seems to be “unclogging“, but liquidity remains to be trapped within the financial sector
Dramatic improvement in sentiment despite economic recovery a long way ahead - rational expectations?
Improvement in spot rates is encouraging, likely to be temporary phenomenon as no significantimprovement in underlying fundamantals
Orderbook remains to be high despite recent reduction in number of deliveries - delayed or cancelled?
Demand for export remains sluggish - as seen in container shipping
Lending to corporates (incl. shipping) remains to be stagment - crucial to kick start economic growth
Limited period enquiries suggest cautious medium/longer term demand