business overview...•us export growth of 10% in cy2018 y-o-y, due to improved lpg production and...
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BUSINESS OVERVIEW
12 February 2019
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.
Dry Bulk
CORPORATE PROFILE
Shipping (Bulk) Offshore
(Through wholly-owned subsidiary Greatship (India) Limited)
Tankers• Crude• Products/LPG
Logistics Drilling
India’s largest private sector shipping company over 70 years of experience
3
Shareholding Pattern as on 31 December 2018
SHAREHOLDING
PATTERN
FII/FPI19% Promoters
30%
Govt./FI25%
Public21%
4
FLEET
PROFILE
SHIPPING
Fleet DWT Number of Ships Average Age (Yrs.)
Crude Carriers 1,608,683 12 13.40
Product Carriers 987,207 17 11.30
Gas Carriers 273,466 6 18.78
Dry Bulk Carriers 1,026,462 13 6.31
Total 3,895,818 48* 11.38
OFFSHORE
Fleet Number of Units Average Age (Yrs.)
Jack Up Rigs 4 7.06
Platform Supply Vessels 4 9.23
Anchor handling Tug Cum Supply Vessels 8 9.08
Multipurpose Platform Supply & Support Vessels
2 8.54
ROV Support Vessels 5 7.25
5
*Contracted to sell Very Large Gas Carrier named ‘Jag Vishnu’ built in 1994
4 KEYS TO
OUR SUCCESS
Dynamically managing
cycles
Diversified Fleet
In-House technical & commercial
management
Strong balance
sheet
7
NET DEBT/EQUITY & TOTAL CAPITAL
EMPLOYED (CONSOLIDATED)
USD Mn
8
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
-
500
1,000
1,500
2,000
2,500
3,000
FY1
99
3
FY1
99
4
FY1
99
5
FY1
99
6
FY1
99
7
FY1
99
8
FY1
99
9
FY2
00
0
FY2
00
1
FY2
00
2
FY2
00
3
FY2
00
4
FY2
00
5
FY2
00
6
FY2
00
7
FY2
00
8
FY2
00
9
FY2
01
0
FY2
01
1
FY2
01
2
FY2
01
3
FY2
01
4
FY2
01
5
FY2
01
6
FY2
01
7
FY2
01
8
9M
FY2
01
9
Total Capital Employed Net Debt/Equity (RHS)
DIVIDEND/SHARE
(30+ YEARS CONTINUOUS DIVIDEND)
1%
3%
5%
7%
9%
11%
13%
15%
17%
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
FY1
99
1
FY1
99
2
FY1
99
3
FY1
99
4
FY1
99
5
FY1
99
6
FY1
99
7
FY1
99
8
FY1
99
9
FY2
00
0
FY2
00
1
FY2
00
2
FY2
00
3
FY2
00
4
FY2
00
5
FY2
00
6
FY2
00
7
FY2
00
8
FY2
00
9
FY2
01
0
FY2
01
1
FY2
01
2
FY2
01
3
FY2
01
4
FY2
01
5
FY2
01
6
FY2
01
7
FY2
01
8
Dividend/Share Dividend Yield (RHS)
INR/Share
99
ROE & ROCE
(CONSOLIDATED)
10
-10%-5%0%5%
10%15%20%25%30%35%40%45%
ROCE (Consolidated) ROE (Consolidated)
Average ROCE Average ROE
Average ROCE: 12%
Average ROE: 17%
BWTS & SCRUBBER
INSTALLATION SCHEDULE
7
36
8 912
77
0
5
10
15
20
25
30
35
40
Installed To be Installed CY2019 CY2021 CY2022 CY2023+
No
. of
Ve
sse
ls
BWTS Scrubber
• Total 7 Vessels have been fitted with BWTS and 36 vessels are scheduled to be installed with BWTS
• 7 Vessels are scheduled to be installed with Scrubbers in CY2019 11
KEY POINTS ON TANKER MARKET•VLCC 5 yr old asset prices increased about 3% Y-O-Y*
•Suezmax 5 yr old asset prices increased about 7% Y-O-Y*
Asset Prices
•BCTI rose by 10% & BDTI remained flat during full year CY18Freight Rates
•U. S. production is up about 1.9 million barrels a day year-on-year, U. S. exports were up
about 0.90 million barrels a day, whereas, imports have been flat year-on-year Q4CY18.
•In Q4CY2018 Y-O-Y, overall crude loadings were largely flat, however 0.50 million barrels a
day up sequentially (Q-O-Q).
Crude Market
•In Q4CY2018 Y-O-Y, overall trade growth for Core Refined Products was lower by 0.10 million
barrels a day.
•This was largely driven by drop in Gasoil and Naphtha loadings. However around 20 LR2s
switched to dirty trading which curtailed the supply side of product tankers.
Product Market
•US export growth of 10% in CY2018 Y-O-Y, due to improved LPG Production and lower
domestic consumption.
•Overall VLGC loadings is up by 3.8 Mt Y-O-Y CY2018 amidst almost flat fleet growth.
Correspondingly Baltic LPG index averaged US $ 34.50 / ton during CY 2018 up 25% Y-O-Y.
LPG Market
•Crude tankers net fleet growth in CY18 is 0.74%, product tankers net fleet growth is 2.10% and
VLGC growth in net fleet is 1.88%.
Fleet Growth
Source – Industry Reports
513* 5 yr old prices in Q4CY2018 are for Eco Tankers whereas in Q4CY2017 for Non-Eco
TANKERS – ASSET PRICE MOVEMENT
(5-YEAR OLD)
Sh
ip P
ric
e (
in m
illi
on
$)
Sh
ip P
ric
e (
in m
illi
on
$)
Source – Industry Reports
514
020406080
100120140160180
20
04
-Jan
20
05
-Jan
20
06
-Jan
20
07
-Jan
20
08
-Jan
20
09
-Jan
20
10
-Jan
20
11
-Jan
20
12
-Jan
20
13
-Jan
20
14
-Jan
20
15
-Jan
20
16
-Jan
20
17
-Jan
20
18
-Jan
20
19
-Jan
VLCC Suezmax Aframax
0
10
20
30
40
50
60
70
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
VLCC Suezmax Aframax
Wet Bulk asset prices has marginally improved in Q4CY2018 Y-O-Y.
BALTIC DIRTY & CLEAN INDEX
Source – Industry Reports
515
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
Jan
-14
May
-14
Sep
-14
Jan
-15
May
-15
Sep
-15
Jan
-16
May
-16
Sep
-16
Jan
-17
May
-17
Sep
-17
Jan
-18
May
-18
Sep
-18
Jan
-19
BALTIC DIRTY TANKER INDEX
300
400
500
600
700
800
900
1,000
Jan
-14
May
-14
Sep
-14
Jan
-15
May
-15
Sep
-15
Jan
-16
May
-16
Sep
-16
Jan
-17
May
-17
Sep
-17
Jan
-18
May
-18
Sep
-18
Jan
-19
BALTIC CLEAN TANKER INDEX
TOTAL OIL
SUPPLY & DEMAND
mil
lio
n b
arr
els
per
day
In Q4CY18 refining throughput shrunk as compared to growth seen during
Q4CY17, due to perceived non-availability of Iranian Crude and softer refinery
margins.
millio
n b
arre
ls p
er d
ay
Source – Industry Reports
516
72
74
76
78
80
82
84
858789
9193959799
101103
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
2014 2015 2016 2017 2018
Supply Demand Refinery Throughput (RHS)
CRUDE & PRODUCT
GROWTH
• Crude demand growth was approx. 0.50 Mn barrels a day in CY2018 Y-O-Y
• Core refined products demand growth was 1.00 Mn barrels a day due to middle distillate
demand growth especially diesel.
• Both crude and product demand is principally fuelled by positive demand in OECD
Americas & Non-OECD Asia.
Source – Industry Reports
517
REFINERY MARGINS
Margins deteriorated in Q4CY18 Y-O-Y due to weaker product cracks.
Source – Industry Reports
518
CRUDE OIL IMPORTS (US & China)
US
Cru
de
Oil
tota
l Im
po
rts
(‘0
00
bp
d)
Ch
ina
Cru
de
Oil
tota
l Im
po
rts
(‘0
00
bp
d)
In Q4CY2018, China imported 20%+ higher crude oil than
Q4CY2017 as teapot refineries rush to exhaust their import
quotas and new refineries were ramping up.Source – Industry Reports
519
7,000
7,200
7,400
7,600
7,800
8,000
8,200
8,400
8,600
8,800
Jan Mar May Jul Sep Nov
2015 2016 2017 2018
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Jan Mar May Jul Sep Nov
2015 2016 2017 2018
CRUDE OIL EXPORTS (US)
0
500
1,000
1,500
2,000
2,500
3,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2018 2017 2016 2015
In CY2018, US exported 100% higher crude oil than CY2017
20
US LPG EXPORTS OF PROPANE &
PROPYLENE
In Q4CY2018, US propane & propylene exports were flat Y-O-Y21
WORLD FLEET GROWTH
CRUDE TANKERS
Tanker Fleet - mn Dwt 23-Jan-19 1-Jan-19 1-Jan-18 1-Jan-17 1-Jan-16
VLCC 230.55 226.88 225.10 213.80 200.00
Suezmax 81.46 81.85 80.60 74.60 71.09
Aframax 67.45 67.03 67.20 66.40 64.37
Total (80k+)* 384.81 381.11 378.90 355.00 335.46
Order Book (mn Dwt) 2019 2020 2021+ Total
Orderbook as % of
current fleet6.9% 4% 1% 11.8%
Source – Industry Reports
Slippage(2018)
About 20%
522
WORLD FLEET GROWTH
PRODUCT TANKERS & VLGC
Product Fleet - mn Dwt 23-Jan-19 1-Jan-19 1-Jan-18 1-Jan-17
LR2 39.11 37.9 36.60 33.50
LR1 26.96 26.9 26.51 25.20
MR/Handy (35k+) 83.65 83.3 82.40 80.40
Total (35k+)* 152.55 150.93 147.61 139.40
Order Book(mn Dwt) 2019 2020 2021+ Total
Orderbook as % of current
fleet4.7% 2.5% 1% 8.2%
Fleet - No. of Vessels 23-Jan-19 1-Jan-19 1-Jan-18
VLGC 271 271 266
Order Book (No. of Vessels) 2019 2020 2021+ Total
Orderbook as % of current
fleet6.6% 7.7% 0.4% 14.8%
Slippage Product (2018)
About
20%
Source – Industry Reports
523
KEY POINTS ON DRY BULK MARKETS
• Capesize 5 yr old asset prices were flat in Q4CY2018 Y-O-Y
• Panamax & Supramax 5 yr old asset prices were flat in Q4CY2018 Y-O-Y
Asset Prices
• BDI hits 634 on 5-Feb-19 due to Vale’s dam incident, Seasonally low demand and
Australia’s Cyclone
• CY 2018, BDI rose about 95% from 900 to 1750+ and then closed at 1290
Freight Rates
• China total coal imports for CY2018 have risen by 3.5% Y-O-Y. Indian coal imports have
risen by 15% Y-O-Y in CY2018
Coal Market
• China’s Iron Ore imports fell by 1.1% in CY2018Iron Ore
• Dry Bulk net fleet growth in CY2018 was about 2.89%Fleet
Growth
Source – Industry Reports
524
BULKER ASSET PRICES
5-YEAR OLD
Dry Bulk asset prices were flat in Q4CY2018 Y-O-Y.
Sh
ip P
ric
e (
in m
illi
on
$)
Sh
ip P
ric
e (
in m
illi
on
$)
Source – Industry Reports
525
0
20
40
60
80
100
120
140
160
180
20
04
-Jan
20
05
-Jan
20
06
-Jan
20
07
-Jan
20
08
-Jan
20
09
-Jan
20
10
-Jan
20
11
-Jan
20
12
-Jan
20
13
-Jan
20
14
-Jan
20
15
-Jan
20
16
-Jan
20
17
-Jan
20
18
-Jan
20
19
-Jan
Capesize Panamax Supramax
0
5
10
15
20
25
30
35
40
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Capesize Panamax Supramax
BALTIC DRY INDEX
Baltic Dry Index hit 4.5 year high of 1,774 in Jul’18 before falling
to 634 in Feb’19
Source – Industry Reports
526
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
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
Jul-
16
Oct
-16
Jan
-17
Ap
r-1
7
Jul-
17
Oct
-17
Jan
-18
Ap
r-1
8
Jul-
18
Oct
-18
Jan
-19
Vale’s Dam Incident
CHINA IRON ORE & STEEL PRODUCTION
China Steel Production
increased 7% in CY2018
Y-O-Y
China’s iron ore import
shrunk 1% in CY2018
Y-O-Y
Source – Industry Reports
Ste
el
Pro
du
cti
on
(in
Mil
lio
n t
on
ne
s)
Iro
n o
re i
mp
ort
(in
Mil
lio
n t
on
ne
s)
527
-4%
-2%
0%
2%
4%
6%
8%
10%
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2014 2015 2016 2017 2018 4Q 2017 4Q 2018
World Steel China Steel % Growth World % Growth China
9.8%
13.8%
2.4%
7.4%
5.0%
-1.1%
-5%
0%
5%
10%
15%
0
200
400
600
800
1000
1200
2013 2014 2015 2016 2017 2018
China Iron Ore Imports % Change Y-o-Y
CHINA COAL IMPORTS
China coal imports change (Y-O-Y)
Source – Industry Reports
Mn Tonnes
528
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
Dec
-16
Jan
-17
Feb
-17
Mar
-17
Ap
r-1
7
May
-17
Jun
-17
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
Dec
-17
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Oct
-18
No
v-1
8
Dec
-18
WORLD FLEET GROWTH
DRY BULK
Fleet - Mn Dwt 23-Jan-19 1-Jan-19 1-Jan-18 1-Jan-17
Capesize 336 335 324 315
Panamax 208 207 202 196
Handymax 201 201 196 189
Handysize 99 98 96 94
Total 843 841 818 794
Orderbook
(mn Dwt)2019 2020 2021 2022+ Total
Orderbook
(%Fleet)4.9% 4.4% 1.2% 0.1% 10.7%
Slippage(2018)
About 20%
Source – Industry Reports
529
SCRAPPING
High Scrapping for Tankers, and very low for Dry bulk
Vessel
Category
Fleet
(mn Dwt)Scrapping (% of beginning world fleet)
23 Jan 19 2018 2017 2016 2015 2014
Crude 384.81 4.62% 2.35% 0.35% 0.23% 1.60%
Product 152.55 1.64% 1.42% 0.62% 0.61% 1.19%
Dry Bulk 842.90 0.54% 1.77% 3.67% 4.03% 2.25%
Source – Industry Reports
530
Greatship (India)
Limited(a 100% subsidiary)
OFFSHORE BUSINESS
FLEET PROFILE
Fleet Utilization
Category
Extent of coverage of
fleet's operating
days (3M FY19)
PSV 67%
ROVSV 82%
AHTSV 90%
MPSSV 67%
Jackup Rigs 93%
Current Owned Fleet
TypeFleet Count
Jack Up Rigs (350ft) 4
Platform Supply Vessels (PSV) 4
Anchor Handling Tug cum
Supply Vessels (AHTSV)8
Multipurpose Platform Supply
and Support Vessels (MPSSV)2
Platform / ROV Support Vessels
(ROVSV)5
532Source – Industry Reports
As on 31st December 2018
KEY POINTS ON E&P MARKETS
Q4 CY2018
Source – Industry Reports 33
• Day rates for both AHTSV & PSV have come off by ~ 45%-50% since 2014Day Rates
• Rigs: Total fleet remains broadly same compared to last quarter however,
there is a decline of about 3.8% over one year.
• OSV’s: Total fleet remains broadly same compared to last quarter however,
there is a decline of about 2% over one year. .
Fleet Growth
• Rigs: 50-60% (Term)
• Vessels: 40-50% (Term)
Fleet Utilization
• OSVs: 80%-90%(CY2017)
• Rigs: 80% - 90%(CY2017)Slippage
According to various industry reports, after the sharp fall over last 3 years,
the E&P spending declined marginally in 2018
OFFSHORE E&P SPENDING
Source – Industry Reports 34
GLOBAL FLEET SUPPLY
OFFSHORE
Fleet & Orderbook
Number Jackup Rigs AHTSVs PSV
Current Fleet 520 2029 1625
Orderbook 77 81 139
O/B to current fleet 14.8% 4.0% 8.5%
• YTD CY2018 actual deliveries have been far lower than scheduled. Due to bleak
employment scenario owners have refrained from taking delivery. Going forward slippage is
expected to remain high. About 45% of Jackup Rigs are currently 30 years and above.
• Although the activity has started to pick up in the Jack-up and OSV space, the charter rates
are expected to remain at low levels till the excess supply in the market is cleared.
• In case of PSVs and AHTSVs more than half the fleet is either idle/stacked or working in
spot market at a very low utilization.
Source – Industry Reports 35
FINANCIAL
RESULTS
Q3 FY 2018-19
36
FINANCIAL HIGHLIGHTS
Q3’FY19 Q3’FY18 9M’FY19 (Amount in Rs. Crs) Q3’FY19 Q3’FY18 9M’FY19
Income Statement
812.01 594.60 2028.26 Revenue (including other income) 1044.18 836.67 2734.55
337.02 230.37 685.19 #EBITDA (including other income) 463.29 367.17 1087.74
264.01 55.02 (155.08) Net Profit 298.63 98.19 (169.92)
Balance Sheet
10608.10 10641.93 10608.10 Total Assets 14700.45 15704.60 14700.45
4909.66 5236.78 4909.66 Equity 6648.70 7318.97 6648.70
4341.84 4435.79 4341.84 Total Debt (Gross) 6311.75 6547.83 6311.75
1854.45 1638.50 1854.45 Long Term Debt (Net of Cash) 2535.46 2507.59 2535.46
Cash Flow**
188.48 171.77 463.73 From operating activities 343.05 308.66 828.43
116.34 (14.57) (427.57) From investing activities 110.45 (40.58) (463.87)
(258.95) (88.97) (299.71) From financing activities (336.29) (169.87) (536.00)
45.87 68.23 (263.55) Net cash inflow/(outflow) 117.21 98.21 (171.44)
GE Shipping Q3FY19 Consolidated Net Profit at Rs. 298.63 Crores
Standalone ConsolidatedKey Figures
** Non GAAP Measures and Placement of Bank deposits and sale and purchase of Mutual Funds are not considered in Cash flow as they are considered as cash and cash equivalent
37
FINANCIAL HIGHLIGHTS
Q3’FY19 Q3’FY18 9M’FY19 Q3’FY19 Q3’FY18 9M’FY19
Key financial figures
41.50% 38.74% 33.78% EBITDA Margin 44.37% 43.88% 39.78%
8.72% 1.08% 0.34% #*Return on Equity (ROE) 5.29% 2.78% 0.65%
8.51% 3.90% 4.14% #*Return on Capital Employed (ROCE) 6.81% 3.90% 4.42%
0.88 0.85 0.88 Gross Debt/Equity Ratio 0.95 0.89 0.95
0.38 0.31 0.38 Net Debt/Equity Ratio 0.38 0.34 0.38
72.11 64.97 69.27 Average Exchange rate USD/INR 72.11 64.97 69.27
69.77 63.87 69.77 End of Period Exchange rate USD/INR 69.77 63.87 69.77
Share related figures(in Rs.)
17.51 3.65 (10.29) Earnings per share, EPS 19.81 6.51 (11.27)
17.48 3.64 (10.29) Diluted earnings per share 19.77 6.50 (11.27)
13.94 12.17 27.82 Cash Profit per share 16.79 19.23 44.43
- - - Dividend per share - - -
Standalone ConsolidatedKey Figures
38
# Excluding Exception items
*Annualized figures
Breakup of Revenue Days
Revenue Days Q3 FY19 Q3 FY18
Owned Tonnage 4,210 4,329
Inchartered Tonnage 16 141
Total Revenue Days 4,226 4.470
Total Owned Tonnage (mn.dwt) 3.90 3.92
Average TCY Details
Average (TCY $ per day) Q3’FY19 Q3’FY18 % Change
Crude Carriers 21,053 16,811 25%
Product Carriers (Incl.
Gas)15,383 15,259 1%
Dry Bulk 14,571 12,231 19%
Mix of Spot & Time
Days (in %) Q3’FY19 Q3’FY18
Dry Bulk
Spot % 93% 79%
Time % 07% 21%
Tankers
Spot % 85% 76%
Time % 15% 24%
Total
Spot % 87% 77%
Time % 13% 23%539
FINANCIAL HIGHLIGHTS
THANK YOU
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THANK YOU
40