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The Great Eastern Shipping Co. Ltd.
1
Business & Financial Review
July 2016
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.
2
Forward Looking Statements
Corporate Profile
The Great Eastern Shipping Company
Shipping (Bulk)
Tankers
- Crude
- Products
Bulk
Offshore
(Through wholly-owned subsidiary
Greatship (India) Limited)
Drilling Logistics
India’s largest private sector shipping company.
Over 67 years of experience
3
4
Uninterrupted dividend for 30 years
Two Interim dividends amounting to Rs. 13.5 per share declared and paid in FY16
0
2
4
6
8
10
12
14
16
198
4-8
5
198
5-8
6
198
6-8
7
198
7-8
8
198
8-8
9
198
9-9
0
199
0-9
1
199
1-9
2
199
2-9
3
199
3-9
4
199
4-9
5
199
5-9
6
199
6-9
7
199
7-9
8
199
8-9
9
199
9-0
0
200
0-0
1
200
1-0
2
200
2-0
3
200
3-0
4
200
4-0
5
200
5-0
6
200
6-0
7
200
7-0
8
200
8-0
9
200
9-1
0
201
0-1
1
201
1-1
2
201
2-1
3
201
3-1
4
201
4-1
5
201
5-1
6
Dividend per share (Rs)
5
Shareholding Pattern
Shareholding Pattern as on March 31, 2016
Promoters
31%
FII
24%
Govt/FI
19%
Corporate
Bodies
6%
Public
20%
6
Shipping business - owned fleet Sr. No. Vessel Name Type
1 Jag Lalit Suezmax
2 Jag Lok Suezmax
3 Jag Lateef Suezmax
4 Jag Lakshita Suezmax
5 Jag Lyall Aframax
6 Jag Lata Aframax
7 Jag Lavanya Aframax
7 Crude Carriers ; Average Age – 12.8 years
8 Jag Aabha LR1
9 Jag Aanchal LR1
10 Jag Amisha LR1
11 Jag Aparna LR1
12 Jag Pahel MR
13 Jag Pankhi MR
14 Jag Prabha MR
15 Jag Prakash MR
16 Jag Pushpa MR
17 Jag Prerana MR
18 Jag Pranav MR
19 Jag Pranam MR
20 Jag Padma MR
21 Jag Punit MR
14 Product Carriers; Average Age – 8.9 years
Sr. No. Vessel Name Type
22 Jag Vishnu VLGC
23 Jag Vidhi VLGC
2 Gas Carriers; Age - 21 years
24 Jag Aarati Kamsarmax
25 Jag Aditi Kamsarmax
26 Jag Arya Kamsarmax
27 Jag Arnav Kamsarmax
28 Jag Ajay Kamsarmax
29 Jag Ratan Supramax
30 Jag Rahul Supramax
31 Jag Rishi Supramax
32 Jag Rani Supramax
33 Jag Roopa Supramax
10 Bulk Carriers; Average Age – 5.7 years
33 Vessels
Average Age – 9.97 years
Total dwt - 2.5 mn
7
Vessels on Order & Capital Expenditure
Vessel Yard Expected Delivery
3 Kamsarmax Dry Bulk
Carriers
Jiangsu New Yangzi
Shipbuilding Co. Ltd,
China
Q2 FY17 & Q4 FY17
1 Secondhand Capesize
Dry Bulk Carrier
Hyundai Heavy
Industries, S Korea
Q2 FY17
Vessels on Order & Expected Delivery
Committed Capex - $90-100 mn
8
Tankers – Asset Prices (5-year old)
Source – Industry Reports
0
20
40
60
80
100
120
140
160
180
2001-0
1
2002-0
1
2003-0
1
2004-0
1
2005-0
1
20
06-0
1
2007-0
1
2008-0
1
2009-0
1
2010-0
1
2011-0
1
2012-0
1
2013-0
1
2014-0
1
2015-0
1
2016-0
1
USD mn
VLCC Suezmax Aframax
0
10
20
30
40
50
60
70
80
90
2011 2012 2013 2014 2015 Q1 2016
USD mn
VLCC Suezmax Aframax
9
Bulkers – Asset Prices (5-year old)
Dry Bulk asset prices at 20-year low
Source – Industry Reports
0
20
40
60
80
100
120
140
160
180
2001-0
1
2002-0
1
2003-0
1
2004-0
1
2005-0
1
20
06-0
1
2007-0
1
2008-0
1
2009-0
1
2010-0
1
2011-0
1
2012-0
1
2013-0
1
2014-0
1
2015-0
1
2016-0
1
USD mn
Capesize Panamax Supramax
0
5
10
15
20
25
30
35
40
45
50
2011 2012 2013 2014 2015 Q1 2016
USD mn
Capesize Panamax Supramax
10
Low oil prices positively impacted tanker rates
Source – Industry Reports
400
500
600
700
800
900
1000
1100
1200
1300
1400
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Baltic Dirty Tanker Index
400
500
600
700
800
900
1000
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Baltic Clean Tanker Index
11
Lower oil prices, leading to increased demand & refinery
runs
Source – Industry Reports
72
73
74
75
76
77
78
79
80
81
85
87
89
91
93
95
97
99
2012 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
mbpd mbpd
Supply Demand Refinery Throughput (RHS)
• Crude tanker rates, although lower than Q4 2015 levels, remained healthy led
by an increase of close to 1 mbpd in refinery throughput & port congestions
• Product tanker rates fell marginally on account of warm winter in the west, a
blip down in refinery margins and increase in fleet during the quarter.
12
Rising supply, contango led to commercial stocking, SPR
filling and forced storage
Source – Industry Reports
• Lower crude oil prices - SPR filling and increase in commercial inventory
• Forced storage of oil products due to product-specific oversupply and
logistical constraints
13
US and China Crude Oil Imports
Source – Industry Reports
6000
6500
7000
7500
8000
8500
Jan
Feb
Mar
Apr
May Jun
Jul
Aug
Sep
Oct
Nov
Dec
2016 2015 2014 2013
4000
5000
6000
7000
8000
9000
Jan
Feb
Mar
Apr
May Jun
Jul
Aug
Sep
Oct
No
v
Dec
2016 2015 2014 2013
US Crude Oil Imports (‘000 bpd) China Crude Oil Imports (‘000 bpd)
Baltic Dry Index (Jan 2000 – Apr 2016)
Dry Bulk freight rates improved during the quarter
Despite improvement during the quarter, dry bulk rates remain
close to historic lows
14
Source – Industry Reports
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jan-0
0
Jun-0
0
Nov-0
0
Apr-
01
Sep
-01
Feb
-02
Jul-
02
Dec
-02
May
-03
Oct
-03
Mar
-04
Aug-0
4
Jan-0
5
Jun-0
5
Nov-0
5
Apr-
06
Sep
-06
Feb
-07
Jul-
07
Dec
-07
May
-08
Oct
-08
Mar
-09
Aug-0
9
Jan-1
0
Jun-1
0
Nov-1
0
Apr-
11
Sep
-11
Feb
-12
Jul-
12
Dec
-12
May
-13
Oct
-13
Mar
-14
Aug-1
4
Jan-1
5
Jun-1
5
Nov-1
5
Apr-
16
Baltic Dry Index
China’s iron ore import growth picked up
15
Source – Industry Reports
-10%
-5%
0%
5%
10%
15%
0
500
1000
1500
2000
2013 2014 2015 Q1 2015 Q1 2016
mt
World Crude Steel Production China Steel Production
Growth in World Steel Production (LHS) Growth in China Steel Production (LHS)
Steel Production fell during the quarter
China’s iron ore import grew 6% in Q1 2016
745 819
932 953
227 242
0
200
400
600
800
1000
1200
2012 2013 2014 2015 Q1 2015 Q1 2016
mt Australia Brazil Others
-15
-10
-5
0
5
10
Jan
-15
Mar
-15
May
-15
Jul-
15
Sep
-15
No
v-1
5
Jan
-16
Mar
-16
mt
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
Jan
-14
Ap
r-1
4
Jul-
14
Oct
-14
Jan
-15
Ap
r-1
5
Jul-
15
Oct
-15
Jan
-16
Ap
r-1
6
Coal imports by top importers on a declining trend
China coal imports India coal imports
16
Source – Industry Reports
mt
World Fleet Growth
Gross Fleet Addition (on
current fleet)
Fleet
CY2016 CY2017 CY2018+ May 16
(in mn dwt)
Crude tankers 341 7% 8% 4%
Product tankers 144 7% 6% 2%
Dry bulk carriers 779 9% 4% 3%
0
200
400
600
800
1000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Dry Bulk Crude Product
mn dwt
Fleet
17
Source – Industry Reports
18
Accelerated scrapping in Dry Bulk
Scrapping as % of world fleet (year-wise)
Vessel
Category
Fleet as on Scrapping
May 16 2016 YTD 2015 2014 2013
(in mn dwt) (% of beginning fleet)
Crude 341 0.1% 0.2% 1% 2%
Product 144 0.3% 0.2% 1% 2%
Dry Bulk 779 2% 4% 2% 3%
Source – Industry Reports
Greatship (India) Limited (a 100% subsidiary)
Business Review
July 2016
20
Current Owned Fleet
• 4 Jack Up Rigs (350ft)
• 5 Platform Supply Vessels (PSV)
• 8 Anchor Handling Tug cum Supply
Vessels (AHTSV)
• 2 Multipurpose Platform Supply and
Support Vessels (MPSSV)
• 6 Platform / ROV Support Vessels
(ROVSV)*
Offshore business- Fleet Profile
The Greatship Group
Category
Extent of coverage of
fleet's operating days
(per cent)
(FY17)
PSV 25
ROVSV 31
AHTSV 88
MPSSV 44
Jackup Rigs 95
High Fleet Utilization
* Includes Greatship Ragini (ROVSV) which has been contracted for sale with expected delivery in H2FY17
21
Greatship’s Modern & Technologically Advanced Fleet & High
Utilization
- Higher utilization rates
- Minimum down time Revenue
Efficiencies
- Lower Operating costs
- Reduced maintenance
capex & opex
Cost
Efficiencies
Young Fleet
Young jack-up fleet with an average age
of approx. 4.5 years
Demand shifting to modern vessels,
especially as safety becomes a major
concern for oil companies
Technologically Advanced
Specialized/technologically advanced
vessels equipped with DP I/DP II
(Dynamic Positioning) and FiFi I (Fire
Fighting) technologies
Equipped to operate in challenging
environments
Efficient and versatile vessels
22
Double-digit decline in capex spending in 2016
2 years of continuous decline in capex spending
Source – Industry Reports
Outlook likely to have worsened since the last survey
23
Source: Rigzone, Marinebase, Industry Reports
• YTD actual deliveries have been far lower than scheduled. Due to bleak employment scenario
owners have refrained from taking delivery. A lot of deliveries due in 2016 have now been
pushed back to 2017.
o Going forward slippage is expected remain high.
• Asset utilisation levels continue to come off. For premium Jack ups, lack of contract renewals
has resulted in utilisation levels coming down from around 90% at the start of 2014 to around
65% as on date.
• In case of PSVs and AHTSVs more than half the fleet is either idle/stacked or working in spot
market at a very low utilisation.
(Nos) Jackup Rigs AHTSVs PSV
Current Fleet 464 1942 1439
Orderbook 120 191 234
% of O/B to current fleet 26% 10% 16%
Fleet & Orderbook
Global Fleet Supply – Offshore
FINANCIAL HIGHLIGHTS
Q4 FY 2015-16
25
Q4 FY 2015-16 Financial Highlights
Standalone Consolidated Key Figures
FY'16 FY'15 (Amount in Rs. crs) FY'16 FY'15
Income Statement
2279.53 2010.51 Revenue (including other income) 4078.51 3713.53
1153.13 840.93 EBITDA (including other income) 2269.57 1708.74
609.90 317.30 Net Profit 1039.40 748.24
Balance Sheet
9412.71 9335.93 Total Assets 15631.55 15535.15
5203.64 4930.76 Equity 8283.90 7430.62
2884.10 3069.33 Total Debt (Gross) 5794.11 6539.61
22.37 202.79 Long Term Debt (Net of Cash) 1894.42 2806.28
Cash Flow
969.71 530.12 From operating activities 2051.22 1448.58
(600.38) 489.68 From investing activities (917.52) (776.05)
(809.43) (649.88) From financing activities (1694.55) (228.28)
(440.10) 369.92 Net cash inflow/(outflow) (560.85) 444.25
26
Q4 FY 2015-16 Financial Highlights
Standalone Consolidated Key Figures
FY'16 FY'15 (Amount in Rs. crs) FY'16 FY'15
Key financial figures
50.59% 41.83% EBITDA Margin (%) 55.65% 46.01%
12.04% 6.52% Return on Equity (ROE) (%) 13.23% 10.54%
9.83% 6.28% Return on Capital Employed (ROCE) (%) 9.44% 7.81%
0.55 0.62 Gross Debt/Equity Ratio (x) 0.70 0.88
0.00 0.04 Net Debt/Equity Ratio (x) 0.23 0.38
65.30 61.13 Exchange rate USD/INR, average (Rs) 65.30 61.13
66.25 62.50 Exchange rate USD/INR, end of period (Rs)
66.25 62.50
Share related figures
40.45 21.04 Earnings per share, EPS (Rs) 68.94 49.63
40.37 21.00 Diluted earnings per share (Rs) 68.80 49.53
63.25 42.50 Cash Profit per share (Rs) 124.34 90.38
13.50 11.00 Dividend per share (Rs) 13.50 11.00
27
Q4 FY 2015-16 Performance Highlights Breakup of revenue days
Average TCY Details
Mix of Spot & Time
Revenue Days Q4’FY16 Q4’FY15
Owned Tonnage 2,574 2,603
Inchartered Tonnage 85 0
Total Revenue Days 2,659 2,603
Total Owned Tonnage (mn.dwt)* 2.4 2.3
Average (TCY $ per day) Q4’FY16 Q4’FY15 % Chg
Crude Carriers 33,838 30,324 12%
Product Carriers (Incl. Gas) 21,613 23,034 (6)%
Dry Bulk 4,418 7,717 (43)%
* As on 31st March
Days (in %) Q4’FY16 Q4’FY15
Dry Bulk
Spot % 63% 95%
Time % 37% 5%
Tankers
Spot % 66% 63%
Time % 34% 37%
Total
Spot % 65% 73%
Time % 35% 27%
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