quarterly results q1fy21 · 2020-07-31 · q1 fy 2020-21 4. reported financial highlights q1fy21...

QUARTERLY RESULTS

UPDATES – Q1FY21

31 July 2020

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 future results which in turn involve

certain risks and uncertainties. Certain factors may

cause actual results to differ materially from those

contained in the forward looking statements;

including changes in freight rates; global

economic and business conditions; effects of

competition and technological developments;

changes in laws and regulations; difficulties in

achieving cost savings; currency, fuel price and

interest rate fluctuations etc. The Company

assumes no responsibility with regard to publicly

amending, modifying or revising the statements

based on any subsequent developments,

information or events that may occur.

FINANCIAL

RESULTSQ1 FY 2020-21

4

REPORTED FINANCIAL

HIGHLIGHTS

Q1FY21 Q1FY20 (Amount in Rs. Crs) Q1FY21 Q1FY20

Income Statement

1,025 569 Revenue (including other income) 1,197 773

637 165 EBITDA (including other income) 717 261

465 (50) Net Profit 468 (54)

Balance Sheet

10,284 10,283 Total Assets 14,050 14,252

5,500 5,008 Equity 7,229 6,755

3,560 4,078 Total Debt (Gross) 5,194 5,917

730 1,599 Long Term Debt (Net of Cash) 1,201 2,235

Cash Flow

637 218 From operating activities 691 305

17 64 From investing activities 31 26

(125) (86) From financing activities (190) (166)

530 197 Net cash inflow/(outflow) 531 165

GE Shipping Q1FY21 consolidated Net Profit at Rs. 468 Crores

5

Standalone ConsolidatedKey Figures

1) The impact of the exchange rate on foreign currency loans and current assets and liabilities, including cash and bank balances, has been removed

2) NCD & Currency Swap:

• Funds raised through NCDs have been swapped into USD using INR-FCY swaps, thus creating synthetic fixed rate USD loans.

• The MTM change of these swaps impacts the reported numbers.

• Normalized numbers are worked out after making necessary adjustments to reported numbers to reflect the effective cost of the synthetic USD loans.

NORMALIZED FINANCIAL

NOTES

6


HIGHLIGHTS

Q1FY21 Q1FY20 (Amount in Rs. Crs) Q1FY21 Q1FY20

Income Statement

957 631 Revenue (including other income) 1,128 833

593 232 EBITDA (including other income) 672 327

422 17 Net Profit 423 12

Balance Sheet

10,284 10,283 Total Assets 14,050 14,252

5,500 5,008 Equity 7,229 6,755

4,169 4,722 Total Debt (Gross) 5,803 6,561

1,339 2,243 Long Term Debt (Net of Cash) 1,810 2,879

Cash Flow

637 218 From operating activities 691 305

17 64 From investing activities 31 26

(125) (86) From financing activities (190) (166)

530 197 Net cash inflow/(outflow) 531 165


7

GE Shipping Q1FY21 consolidated Normalized Net Profit at Rs. 423 Crores


8

*Annualized figures


HIGHLIGHTS

Q1FY21 Q1FY20 Q1FY21 Q1FY20

Key financial figures

31.93% 1.36% *Return on Equity (ROE) (%) 24.12% 0.69%

19.58% 2.60% *Return on Capital Employed (ROCE) (%) 15.03% 3.26%

0.76 0.94 Gross Debt/Equity (x) 0.80 0.97

0.24 0.45 Net Debt/Equity (x) 0.25 0.43

28.70 1.14 Earnings per share, EPS (INR/Share) 28.77 0.78

36.59 9.38 Cash Profit per share (INR/Share) 41.08 13.56

- - Dividend per share (INR/Share) - -

456 383 Net Asset Value per share (INR/Share) 494-536 452-477

PERFORMANCE REVIEW

Revenue Days Q1 FY21 Q1 FY20

Owned Tonnage 4,018 4,142

Inchartered Tonnage - 35

Total Revenue Days 4,018 4,177

Total Owned Tonnage (mn.dwt) 3.70 3.85

Revenue Days Q1 FY21 Q1 FY20

Offshore Logistics 1,626 1,470

Drilling Services 306 314

Total 1,932 1,784

Break up of Revenue days (Shipping)

Break up of Revenue days (Offshore)

Average TCYs earned over last few quarters in various (Shipping) categories

Average (TCY $ per day) Q1 FY21 Q4 FY20 Q-o-Q Change Q1 FY20 Y-o-Y Change

Crude Carriers 40,109 32,338 24% 14,824 171%

Product Carriers 27,112 18,274 48% 14,581 86%

LPG Carriers 28,908 25,932 11% 16,774 72%

Dry Bulk 7,218 8,321 -13% 10,998 -34%9

REVENUE VISIBILITY & COVERAGE

CategoryExtent of coverage of fleet’s

operating days Revenue Visibility

Crude Carriers 27%

Rs 513 CrProduct Carriers 16%

LPG Carriers 79%

Dry Bulk 23%

CategoryExtent of coverage of fleet’s

operating daysRevenue Visibility

Jackup Rigs 94%

Rs 472 CrAHTSV 72%

MPSVV 68%

PSV/ROVSV 92%

Category-wise coverage of operating days (Shipping) --- FY21

Category-wise coverage of operating days (Offshore) --- FY21

10

FLEET PROFILE

SHIPPING

Fleet DWT Number of Ships Average Age (Yrs.)

Crude Carriers 1,461,591 11 14.33

Product Carriers 987,207 17 12.77

Gas Carriers 224,113 5 18.89

Dry Bulk Carriers 1,026,462 13 7.78

Total 3,699,373 46 12.37

OFFSHORE

Fleet Number of Units Average Age (Yrs.)

Jack Up Rigs 4 8.81

Platform Supply Vessels 4 10.96

Anchor handling Tug Cum Supply Vessels 8 10.82

Multipurpose Platform Supply & Support Vessels 2 10.28

ROV Support Vessels 5 8.98

11

41

78 71

60

74

553

0

100

200

300

400

500

600

0

20

40

60

80

100

Jun-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25

GESCO - Standalone (USD mn)

Repayments Loan O/s (RHS)

GESCO STANDALONE

DEBT REPAYMENT SCHEDULE (NEXT

5 YEARS)

12

GESCO: We have effective all-in USD cost of debt of less than 4%. 85% of debt portfolio is fixed.

USD

Mill

ion

USD

Millio

n

IMPACT OFCOVID-19

IMPACT OF COVID-19

ON SHIPPING

15

Operational Disruptions due to COVID-19

• Drydocking

• Crew Changes

• S&P transactions

SUPPLY SIDE - SHIPPING

16

8.2%0%

10%

20%

30%

40%

50%

Crude tankers Orderbook (% of Total fleet)

Average Historical Orderbook

6.4%

0%

20%

40%

60%

80%

Product tankers Orderbook (% of Total fleet)


Historical Average: 24%

7.2%

0%

20%

40%

60%

80%

100%

Dry Bulk Orderbook (% of Total fleet)



11.0%

0%

10%

20%

30%

40%

50%

LPG Carriers Orderbook (% of Total fleet)



LOWEST ORDERBOOK

IN 20 YEARS


17Source – Industry Reports

SCRAPPING

Scrapping was low for Crude and Product tanker sector in H1CY2020

Vessel

Category

Fleet

(mn Dwt)Scrapping (% of beginning world fleet)

15 Jul 20 H1CY20 2019 2018 2017 2016 2015 2014

Crude 423 0.17% 0.61% 4.62% 2.35% 0.35% 0.23% 1.60%

Product 162 0.23% 0.43% 1.64% 1.42% 0.62% 0.61% 1.19%

Dry Bulk 900 0.87% 0.92% 0.54% 1.77% 3.67% 4.03% 2.25%

Source – Industry Reports

18

0%

5%

10%

15%

20%

25%

Crude Tankers Product Tankers Dry Bulk

Assets above 15 years as % of total fleet

Age: 16-20 Years (% of Total Fleet) Age: >20 years (% of Total Fleet)

SCRAPPING POTENTIAL

ASSET CLASS WISE


OIL CONTANGO & FLOATING STORAGE

20

BRENT OIL PRICE &

OIL CONTANGO

During March-April’20, Oil Contango was above the floating storage cost economics therefore increased in floating storage demand. While currently, Oil Contango narrowed, hence floating storage also lowered.

21

58.8965.2

20

40In March, OPEC+ failed to reach an agreement on production cuts


OIL CONTANGO Vs.

FLOATING STORAGE OF OIL

22

Peaked on 8-May-20

9.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Jan

-18

Mar

-18

May

-18

Jul-

18

Sep

-18

No

v-1

8

Jan

-19

Mar

-19

May

-19

Jul-

19

Sep

-19

No

v-1

9

Jan

-20

Mar

-20

May

-20

Jul-

20

Crude Tankers 10k+ dwt (storage as % of fleet)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

Jan

-18

Mar

-18

May

-18

Jul-

18

Sep

-18

No

v-1

8

Jan

-19

Mar

-19

May

-19

Jul-

19

Sep

-19

No

v-1

9

Jan

-20

Mar

-20

May

-20

Jul-

20

Product Tankers 10k+ dwt (storage as % of fleet)

Note: These excludes dedicated storage

Peaked on8-May-20

8.8%


DEMAND SIDE - SHIPPING

23

TANKERMARKET

CRUDE OIL

DEMAND & SUPPLY IMPACT

25Sources: Industry Reports

kbpd: Thousand Barrels Per Day

(1,025)

(4,146) (4,251)

(11,875)(13,412)

(12,520)

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

Crude Oil Demand Y/Y Change (kbpd)

(23) (369)

927 1,215

(8,838)(10,696)


Crude Oil Supply Y/Y Change (kbpd)

DECLINE IN CORE PRODUCTS

DEMAND DURING JAN-JUN 2020

26

Sources: Industry Reports

-1%

-7%

-15%

-32%

-19%

-13%-3% -6%

-5%

-17%-12%

-5%-5%-7%

-29%

-63% -65%

-57%

3%

-5%-6%

-12%

-5% -4%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%


Product-wise fall in demand y/y (%)

Gasoline Gasoil Jet Naphtha

DRY BULKMARKET

DRY BULK

MARKETS

Coal 28%

Iron Ore24%Grains

9%

Minor Bulks39%

Commodity wise Break up of Global DB demand (%)

China 44%

India 8%Europe

10%

JKT 20%

SEA 8%Others 10%

Major Importers of - Iron Ore/Coal/Grains (%)

Australia 38%

Indonesia 14%

Russia 6%

S.Africa/Other Africa 5%

Brazil 14%

Argentina/S.America, …

Canada+US, 9%

EuropeUK/Med 4%

Colombia 2% Others 5%

Major Exporters - Iron ore/Coal/Grains (MMT,%)

28

Sources: Industry Reports

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2016 2017 2018 2019 H1 CY19 H1 CY20

World Steel China Steel % Growth World % Growth China

CHINA & WORLD

STEEL PRODUCTION

China Steel Production

increased marginally by

3% in H1CY2020 Y-O-Y.

Whereas, World Steel

Production growth was

negative 4%.


Ste

el P

rod

ucti

on

(in

Mil

lio

n t

on

nes

)

29

30

24

30

26

35 35 36 3634

37

34 33 33

29

22

19

30 29

34

28

31

33

2725

27

22 21

24

22

30

1

6

11

16

21

26

31

36

41

Total BR IO exports

Total BR Exports (Mt)

BRAZIL IRON ORE

EXPORTS

30


Greatship (India)

Limited(a 100% subsidiary)

OFFSHORE BUSINESS

FLEET PROFILE

Fleet Utilization

Current Owned Fleet Type Fleet CountExtent of coverage of fleet's operating days

(FY21)

Jack Up Rigs (350ft) 4 94%

Anchor Handling Tug cum Supply Vessels

(AHTSV)8 72%

Multipurpose Platform Supply and Support

Vessels (MPSSV)2 68%

Platform Supply Vessels (PSV) / ROV Support

Vessels (ROVSV)9 92%

32

As on 30th June 2020

OFFSHORE

E&P SPENDING


The E&P spending after declining marginally in 2018 was flattish in 2019. Spending in 2020 is expected to

see a sharp fall of about 20-30%.

33

KEY POINTS ON E&P MARKETS

Q2CY2020


36

• The steep fall in oil price and Covid-19 impact on the world economy has stalled the recovery.

• Some regions have witnessed early terminations & renegotiations. As a result charter rates have again come

under pressure.

Day Rates

• Rigs: Competitive fleet has remained unchanged over last 1 year and has shrunk by 6-7% over the last 5

years due to scrapping and cold stacking.

• OSV’s: Competitive fleet has reduced marginally over last 1 year and by about 8-9% over the last 5 years.

• Very few new orders for vessels as well as rigs in last 4-5 years.

Fleet Growth

• Rigs: 60-70% (Term) (Decreased by about 3.5% from June19 levels and by about 5% in the last quarter)

• Vessels: 40-50% (Term) (Utilization remained almost flattish from June 19 till Mar 20 but decreased by about

6% during last quarter)

Global Fleet Utilization

• OSVs: 80%-90%(CY2019)

• Rigs: 50% - 60%(CY2019)Slippage


GLOBAL FLEET SUPPLY

OFFSHOREFleet Profile

Number Jackup Rigs PSVs + AHTSVs

Current Fleet 526 3591

Orderbook 47 178

O/B to current fleet 8.9% 5%

Scrapping over last 5 years (as %age of fleet) 3.64% 1.9%

No. of Vessels/Rigs more than 20/30 years old

(as %age of fleet)39% 19%


Fleet composition is expected to correct over next few years with older vessels and rigs expected to get scrapped.

35

23 23 32

43

97 218

0

50

100

150

200

250

0

20

40

60

80

100

120

Jun-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25

GIL (USD mn)

Repayments Loan O/s (RHS)

GIL STANDALONE

DEBT REPAYMENT SCHEDULE (NEXT

5 YEARS)

36

USD

Mill

ion

USD

Millio

n

• Most challenging years for the offshore sector since the late 80s.

• Utilization levels across asset classes dropped to historic lows, charter rates came down to levels that barely generated any +ve EBIDTA.

• Large part of the industry went through financial restructuring/reorganization/forced consolidation.

• How did we fare?

Mar 15 : USD 118 M

Mar 20: USD 138 M

Mar 15: USD 555 M

Mar 20: USD 225 M

Net Bank Debt to Equity:

Mar 15: 0.75

Mar 20: 0.22

Gross bank debt

Cash on the balance sheet:

LAST 5 YEARS: SNAPSHOT

OFFSHORE

37

KEY VALUATIONS CONSIDERATIONS

38

0%

10%

20%

30%

40%

50%

60%

-

50

100

150

200

250

300

350

400

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 Q1FY2021

Net Debt/Equity & Market Value of Fleet

Net Debt (LHS) Net Debt to Market Value of Fleet Net Debt to Equity

NET DEBT/EQUITY & MARKET VALUE

OF FLEET - STANDALONE

Fleet Expansion

Phase

Net Debt Reduction

Phase

39

USD Mn

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0

100

200

300

400

500

600

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Q1FY21

Consolidated NAV Share Price/Consol. NAV (RHS)

SHARE PRICE TO

CONSOLIDATED NET ASSET VALUE

40

INR

/Sh

are

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Q1FY21

Market Cap Consolidated Cash & Cash Equivalent

MARKET CAPITALIZATION VS

CONSOLIDATED CASH & CASH

EQUIVALENTINR Crores

41

Market Positives (Shipping):• Historically low orderbook• Potential Scrapping• Demand/Supply – Finely balanced

Market Negatives (Shipping):• Commodity demand uncertainities

Market Negatives (Offshore):• E&P spends reduced significantly

Company Positives:• Deleveraged balance sheet• Proven ability to manage shipping cycles• Capital Available for future buying opportunities

SUMMARY –

SHIPPING & OFFSHORE

42

visit us at www.greatship.com

THANK YOU

43

quarterly results q1fy21 · 2020-07-31 · q1 fy 2020-21 4. reported financial highlights q1fy21...

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