precious shipping public company limited

Precious Shipping PCLPrecious Shipping PCL

PRECIOUS SHIPPING PUBLIC COMPANY LIMITED

Website http://www.preciousshipping.comE-Mail [email protected]

SET Opportunity Day

3rd March 20081


Industry OverviewIndustry Overview

2


INDUSTRY OVERVIEWINDUSTRY OVERVIEW

SHIPPING

COMMERCIAL CRAFTS

DRY TRADES

PASSENGER CARGO

CRUISE FERRIES DRY CARGO

SMALL HANDY 10-30,000 DWT

HANDYMAX30-50,000 DWT

SUPER HANDYMAX50-60,000 DWT

PANAMAX60-80,000 DWT

MULTI PURPOSE CAR CARRIERS TRAWLERS CONTAINERS REEFERS

TANKER TRADES

CHEMICAL

GAS

CLEAN

CRUDE

CAPESIZE80,000+ DWT

PSL

3

TYPE OF VESSELS


PSL FleetPSL Fleet

Number Of Vessels 44 Average Age (Simple Average) 19.59 years

Insured Value/Market Value* USD 1,241.50 Million Book Value USD 261.07 Million Total DWT 1,130,280 Total LDT 256,017 Average DWT per Vessel 25,688 * As on 1st Jan 2008

*Previous valuations: Aries Valuation as on 1st Oct 2007: USD 939 Million HSBC valuation as on 24th May 2007: USD 777 Million Aries Valuation as on 1st Jan 2007: USD 583 Million

4


BDI

Precious Shipping PCL Source :Precious Shipping PCL Source :http://http://www.cotzias.grwww.cotzias.gr

BDI (Cape, Panamax, Supramax and Handy)All time High - 11039 – 13th Nov 2007Previous High - 6208 – 6th Dec 2004All Time Low - 554 - July 1986Latest – 7187 – 22nd February 2008

Precious Shipping PCLPrecious Shipping PCL Source : Howe Robinson ShipbrokersSource : Howe Robinson Shipbrokers

Baltic Dry Index (BDI) Baltic Dry Index (BDI) -- Annual AveragesAnnual Averages

6

Source:Howe Robinson Shipbrokers, Dry Cargo Market - Outlook for 2008

1,137

2,617

4,510

3,371 3,180

7,065

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2002 2003 2004 2005 2006 2007

Index Value


Chinese Steel Chinese Steel –– How long can it continue?How long can it continue?

7

Precious Shipping PCLPrecious Shipping PCL Source : Bloomberg/other newsSource : Bloomberg/other news

China China -- Some FactsSome Facts

8

•Shanghai has built more skyscrapers in the past 15 yrs than New York did in a century

•Iron Ore imports: for 2006: 326 MMT or 50 MMT over 2005, for 2007: 383.6 MMT or 58.6 MMT over 2006, for 2008: estimated 425/450 MMT or 50% of world imports!

•Coal Imports: 2007: 51 MMT, 2008: estimated 65+ MMT after being an exporter of about 80 MMT per annum for last decade!

•Coal production increased 200/250 MMT to 2.5 BMT in 2007 needs to grow by a similar amount to sustain Electricity demand.

•Steel Production: 2004: 280.5 MMT, 2005: 349.5 MMT, 2006: 421 MMT, 2007: about 490 MMT!

•Steel Exports: 2005: 27.6 MMT, 2006: 52 MMT, 2007: 63 MMT!

Precious Shipping PCLPrecious Shipping PCL Source : FT Source : FT

India Vs ChinaIndia Vs China

Year China India Gross National Saving 2002 44% 22% Trade in Goods 2002 49% 21% % of World Merchandise export 2003 5.8%

(4th largest exporter) 0.7%

(31st largest exporter) Stock of FDI 2003 $501.5bn $30.8bn Inflow of FDI 2003 $53.5bn $4.3bn Overall illiteracy 2000 6% 35% Spending on infrastructure 8x 1x Private Investment-Telecom 1996-2002 $13bn $9.3bn Private Investment-Energy 1996-2002 $14.3bn $7.5bn Change in population engaged in agriculture

1981-2001 68% - 45% 67% - 59%

Fiscal deficit % of GDP <4% 10% Formal Sector Employment >20% <10%

9

Precious Shipping PCLPrecious Shipping PCL 10

CHANGE IN NUMBER OF SHIPS AS % OF TOTAL CHANGE IN NUMBER OF SHIPS AS % OF TOTAL FLEET AS OF 1st JAN 2008 (1994FLEET AS OF 1st JAN 2008 (1994--2007)*2007)*

-25.00%

31.90% 30.10%

53.31%

39.03%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

'94-07

Small Handy Handymax Super Handymax Panamax Capesize

Source : CRS/Aries Source : CRS/Aries * Super Handymax (2002-2007)

171,18173,21418,09035,18619984Average Size (DWT)

766148015929283164Fleet - 1st Jan 2008

Precious Shipping PCLPrecious Shipping PCL 11 Source : CRS/Aries Source : CRS/Aries

Industry Over view Industry Over view –– Small Small HandiesHandies

4.3%3.70%

2.50%

1.00%

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%

'08 '09 '10 '11

As % of fleet size as at 1st Jan 2008

NEW BUILDINGS ON ORDER UPTO DEC 2011 (11.5%)NEW BUILDINGS ON ORDER UPTO DEC 2011 (11.5%)

22,18820,43718,60316,822Average Size (DWT)3278118136Numbers


POTENTIAL SCRAPPING OF SHIPS 27 YEARS OR OLDER POTENTIAL SCRAPPING OF SHIPS 27 YEARS OR OLDER UPTO DEC 2011 (47.7% !)UPTO DEC 2011 (47.7% !)

Industry Over view Industry Over view –– Small Small HandiesHandies

36.10%

4.40% 3.40% 3.80%0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%

'08 '09 '10 '11

As % of fleet size as at 1st Jan 2008

20,06020,28420,33317,733Average Size (DWT)1191081391,141Numbers


CHANGE IN NUMBER OF SHIPS AS % OF TOTAL CHANGE IN NUMBER OF SHIPS AS % OF TOTAL FLEET AS OF 1st JAN 2008FLEET AS OF 1st JAN 2008

-41.12%

-15.63%

23.18% 16.01%

56.00%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

'07-11(100%)


Assuming 100% of ships scrapped, which are over scrapping age

177,85377,92751,63833,56620,200Av. Size (DWT)

1195171719617831863Projected – 1st Jan 2011

766148015929283164Fleet - 1st Jan 2008


CHANGE IN NUMBER OF SHIPS AS % OF TOTAL CHANGE IN NUMBER OF SHIPS AS % OF TOTAL FLEET AS OF 1st JAN 2008FLEET AS OF 1st JAN 2008

11.88%

49.03%46.55%

38.04%

76.24%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

'07-11(0%)


Assuming 0% of ships scrapped, which are over scrapping age

172,72975,51450,51834,50020,425Av Size (DWT)

13502043233313833428Projected – 1st Jan 2011

766148015929283164Fleet - 1st Jan 2008


Small Handy Small Handy -- New Buildings Projected New Buildings Projected vsvs DeliveredDelivered

70

51

71

56

73

43

57

41

71

56

73

54

104

65

126

88

136

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008

Projected Delivered

809461-109-124-154-162Net Change

Precious Shipping PCLPrecious Shipping PCL 16

SoaiSoai Rap ShipyardRap Shipyard


Expert Opinions 2007 & 2008Expert Opinions 2007 & 2008

17


Estimated New Cargo Carrying Capacity for 2007 in MMTEstimated New Cargo Carrying Capacity for 2007 in MMT

Est. dwcc Type Newbuildings M tdw Low High

Cape 9.880 62 65 Panamax 9.015 63 65 Handymax 5.806 49 52 Handy 2.190 19 22 Total 26.891 193 204 Number of voyages per year 7.2 7.6

18



Estimated Additional Cargo availability in 2007 in MMTEstimated Additional Cargo availability in 2007 in MMT

Range Cargo Low High

Iron Ore 65 70 Thermal Coal 5 10 Steel 10 25 Cement -5 0 Grain 0 5 Chinese Coastal 20 30 Other Ores 5 10 Misc 5 10 Containerisation -5 -3 Total 130 207

19



Estimated Estimated AnnualisedAnnualised Dead Weight Cargo carrying Capacity of the Dead Weight Cargo carrying Capacity of the Fleet on Order (MMT per annum)Fleet on Order (MMT per annum)

20


2008 2009 2010 VLOC/VLCC 24 24 26

Cape 59 148 270

Panamax 58 85 156 Handymax 81 145 149

Handy 30 48 39 Total 252 450 640


Forecast Dry Bulk Trade for 2008 (MMT)Forecast Dry Bulk Trade for 2008 (MMT)

21


2008f (MMT) Low High

Iron Ore +100 +110 Chinese Coastal Coal +40 +50

Thermal Coal +25 +30 Minor Bulk +25 +35

Grain +12 +16 Met Coal +7 +13

Steel +5 +10 Containers -10 -20

Total +204 +244


PSL’sPSL’s StrategyStrategy

22


PSL’sPSL’s StrategyStrategy

•Sell older ships and en-cash capital gains on a regular annual basis for the next few years

•Purchase New Buildings from shipyards to rejuvenate the fleet and replace ships sold/scrapped

•Acquire additional ships from the second-hand markets as and when opportunities present themselves over the next few years

•Fix Ships on Long Term Time Charter when markets are high and achieve a 50% forward cover on a rolling 4 year basis

•Exploit the spot market for maximising profit from the spot fleet

23


PSL New Building Strategy PSL New Building Strategy

Vessel Hull No. DWT (MT) Est Delivery Builder1 329 32,000 15th Mar 2010 ABG Shipyard 2 330 32,000 31st Jul 2010 ABG Shipyard 3 331 32,000 15th Dec 2010 ABG Shipyard 4 333 32,000 30th Apr 2011 ABG Shipyard 5 334 32,000 31st Aug 2011 ABG Shipyard 6 335 32,000 31st Dec 2011 ABG Shipyard 7 336 32,000 30th Apr 2012 ABG Shipyard 8 337 32,000 31st Aug 2012 ABG Shipyard 9 338 32,000 31st Dec 2012 ABG Shipyard

10 339 32,000 30th Apr 2013 ABG Shipyard 11 340 32,000 31st Aug 2013 ABG Shipyard 12 342 32,000 31st Dec 2013 ABG Shipyard 13 313 54,000 31st Dec 2010 ABG Shipyard 14 315 54,000 30th Jun 2011 ABG Shipyard 15 316 54,000 31st Dec 2011 ABG Shipyard 16 347 54,000 31st May 2012 ABG Shipyard 17 348 54,000 31st Oct 2012 ABG Shipyard 18 349 54,000 31st Dec 2012 ABG Shipyard

24


PSL New Buildings PSL New Buildings -- Brief DescriptionBrief DescriptionSize 32K DWT 54K DWTHull Double Hull Double Hull

Hatch Type Open hatch type Conventional LOA 182.50 m 190.00 m LBP 175.00 m 182.00 m

Beam 29.00 m 32.26 m Holds 5 5

Hatches 5 5

Hold Types 2,3,4 box type, 1 & 5 semi box with lower hopper

Conventional with top & bottom hoppers

Cargo Gear 4 x 30 MT cranes 4 x 36 MT cranes

Class NK, complying with new CSR requirements to

the highest class ABS, complying with new CSR requirements

to the highest class

Laden Speed* 14 K 13.75 K

Consumption* Laden 26MT/day, Ballast 21.5 MT/day Laden 32.5 MT/day, Ballast 29.5 MT/day

Main Engine MAN B & W 6S46MC-C Marine Diesel.

7860 kW MCR MAN B & W 6S50MC-C Marine Diesel.

9480 kW x 127 rpm (MCR)

Diesel Generators 2 sets. 500 kW each approx 3 sets. 600 kW each approx Shaft Generator 1, Driven off main engine shaft -

Accommodation European style European style * Subject to model testing and sea trials.

25


PSL New Buildings PSL New Buildings -- Payment terms and fundingPayment terms and funding

Installment

Number Occasion 32K Ship

(USD) 54K Ship

(USD) Source

1st Signing the contract (20%) 5,999,999

7,599,999

Internal cash Flow

2nd Steel cutting for the ship (20%) 5,999,999

7,599,999

Planned bank loan

3rd Keel Laying of the Ship (20%) 5,999,999

7,600,000

Planned bank loan

4th Launching of the Ship (20%) 6,000,000

7,600,000

Planned bank loan

5th Delivery of the Ship (20%) 6,000,000

7,600,000

Planned bank loan

Total 29,999,997

37,999,998

Planned bank loan

26


Rolling 4 Year Forward Book (As of 1Rolling 4 Year Forward Book (As of 1stst Jan 2008)Jan 2008)

4,176

15,093

1,453

7,855

12,751

8.65%

25.51%

79.40%

91.96%

48.91%

11,61712,828

15,195

14,358 12,056

16,79016,36716,060

16,060

16,413

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

'07 '08 '09 '10 '110.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%'07 '08 '09 '10 '11

Fixed T/C days %age Fixed T/C rate Total Days

27


BDI Vs PSL Earnings per day per shipBDI Vs PSL Earnings per day per ship

1413713281

12342

128741245013087

1592814282131991255312526

1563813406

103911051912261

0

2000

4000

6000

8000

10000

12000

02-Ja

n-04

31-M

ar-04

30-Ju

n-04

30-S

ep-04

24-D

ec-04

31-M

ar-05

30-Ju

n-05

30-S

ep-05

31-D

ec-05

31-M

ar-06

30-Ju

n-06

30-S

ep-06

31-D

ec-06

31-M

ar-07

30-Ju

n-07

30-S

ep-07

31-D

ec-07

Date

BDI

02,0004,0006,0008,00010,00012,00014,00016,00018,000

Earn

ings

in U

SD

BDI Earnings Per Day per Ship

28


Earnings per day per ship Earnings per day per ship vsvs ExpensesExpenses

29


Operating Expenses Operating Expenses

•These are the fixed costs required to run a ship and are evenly spread over the entire year of 365 days•PSL’s Opex per day per ship for 2007 was USD 4,005 broken up into:

Item USD %Crew costs(Abt 26 people /ship) 1,318 32.91%Manning Expenses 218 5.44%Lub oils 301 7.52%Insurance 439 10.96%Repairs/Maintenance 111 2.77%Stores/Spares 442 11.04%Drydocks/Special Surveys 779 19.45%Victualling 167 4.17%Management Expenses 187 4.67%Misc expenses 43 1.07%Total 4,005 100.00%

30

*Included one time provisions of USD1.85 Million ($110 per day)in respect of cargo related claims made over a number of previous years. The regular average OPEX without this one-time charge is USD 3,895


Operating Expenses Comparison Operating Expenses Comparison

•OPEX Comparison with Industry compiled by Moore Stephens & Co.•OPEX excluding dry dock and special survey cost

Precious Shipping Public Company LimitedSource: Moore Stephens and Company

Industry PSL PSLFor year 2006 2006 2007Particulars US$ (Per Day) US$ (Per Day) US$ (Per Day)Crew Wages 1,331 1,264 1,318Provisions 149 152 167Crew Other 222 161 218Crew Cost Total 1,702 1,577 1,703Lubricants 259 238 301Stores Other 307 242 232Stores Total 566 480 533Spares 330 214 210Repairs & Maintenance 293 117 111Repairs & Maintenance Total 623 331 321P & I Insurance 215 155 153Insurance 244 163 286Insurance Total 459 318 439Registration Costs 28 0 0Management Fees 380 143 187Sundries 181 58 43Administration Total 589 201 230

Total Operating Costs $3,939 $2,907 $3,226

31


Average Average OpexOpex / TC Rates 1995 / 2007/ TC Rates 1995 / 2007

4,0053,6223,0552,8102,6702,6042,5892,6482,5902,5562,8893,1183,060

13,14711,387

14,44913,248

7,8705,8545,8555,760

4,8084,8345,742

6,6617,306

25,688

19,514

20,193

20,888

21,225

21,225

22,014

22,700

22,855

23,061

25,213

25,330

25,330

0

5000

10000

15000

20000

25000

30000

95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07

Opex(USD) Income(USD) Av Size DWT ( MT)

32

19.98

06

Av Age

Year

19.59

07

18.9817.3516.6015.8215.6515.5715.5914.5914.2416.1815.97

0504030201009998979695


FinancialsFinancials

33


FUNDED DEBT / EBITDAFUNDED DEBT / EBITDA

0.000.000.40

1.25

6.40

6.51

5.86

4.334.73

3.633.32

3.29

1.85

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07Year

Rat

io

34


FUNDED DEBT/EQUITY RATIOFUNDED DEBT/EQUITY RATIO

0.000.000.28

1.13

0.90

1.20

3.79

2.40

2.52

0.56

0.56

2.92

3.02

1.481.31

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07Year

Rat

io

35


2 4 .78- 0 .4 76 .6 21.2 6- 6 .3 56 .4 1

- 15.2 614 .4 811.4 3

110 .10

12 5.13

9 2 .6 3

154 .2 2

2 0 .8 8

4 2 .0 12 2 .4 9

16 2 .8 8

17.8 32 7.6 42 5.2 619 .3 13 1.3 3

7.4 83 6 .4 33 7.2 2

13 4 .78

19 6 .3 1

14 4 .59

4 5

3 02 83 1

3 5

4 14 14 5

3 83 5

2 9

545452

-50

0

50

100

150

200

250

94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07

Mill

ion

USD

0

10

20

30

40

50

60

Net Profit/(loss) Cash Profit(NP+Depn) Av No of Vsl

2kgg

Net Profit / Cash Profit Net Profit / Cash Profit

36


Cash Operating Profit/ Operating Profit Cash Operating Profit/ Operating Profit

134.66

196.44

40.1023.6026.1925.05

13.0014.9125.67

36.0722.49

37.22

144.57

162.43

110.07

22.875.305.171.05-12.66-10.01

2.9314.1220.88

11.43

154.35

124.68

92.51

-50

0

50

100

150

200

250

94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07

Mill

ion

USD

Cash Op P&L(EBITDA-Interest) Op P&L(EBITDA-Interest-Depreciation)

37


FINANCIAL PROFILE PRE / POST 1997 ASIAN FINANCIAL PROFILE PRE / POST 1997 ASIAN FINANCIAL CRISISFINANCIAL CRISIS

High (Year) Low (Year) Dec-07Funded Debt $256.6m (1997) $185m (1999) $0.00m Equity $94.4m (1996) $61.3m (1999) $400.81m Funded Debt/Equity 3.79 (1997) 2.40 (1996) 0.00EBITDA $52.4m (1996) $28.9m (1999) $132.47mDebt/EBITDA 6.5 (1998) 4.33 (1996) 0.00Daily Earnings $7,306 (1995) $4,808 (1999) $13,147Daily Opex $3,118 (1996) $2,556 (1998) $4,005Total Assets $367.0m (1996) $270.6m (1999) $428.94mNet Profit/(Loss) $20.9m (1995) $(15.3m) (1997) $125.13m Total Revenues $127.21 (1996) $96.53m (1995) $257.98m

38


Dividend policy: not less than 25% of net profitDividend policy: not less than 25% of net profitActual Dividend Paid OutActual Dividend Paid Out

0.75

1.50

1.00

0.75

0.50

0.25

1.555

0.7750.775

0.375

56.1%

69.7%

25.0%27.5%

42.3%

0

0.5

1

1.5

2

2003 2004 2005 2006* 2007Year

divi

dend

s B

aht

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

divi

dend

s as

% o

f EP

S

Interim Dividends Final Dividends As % of EPS

39

•*2006 Final Dividend includes 1:1 bonus share at par•All dividends shown adjusted for 1:1 bonus shares at par•2007 Final dividend as proposed by BODs, pending shareholder’s approval.


Awards and AchievementsAwards and Achievements

40


Industry Awards and Honors

41


Marine Money Ranking: MethodologyMarine Money Ranking: Methodology

Source Marine MoneySource Marine Money

Methodology: Simple Average of Performance Ranks Performance Ranks:

Total Return to Shareholders (TRS)

(Change in Share Price + Dividend)/ (Share Price at the beginning of Period)

Assets Turnover Sales / Total Assets

Profit Margin EBITDA / Sales

Return on Equity(ROE)

Net Income / Average Shareholders Equity

Return on Assets(ROA)

EBIT / Average Total Assets

Price / Book Value Market Value of Equity / Book Value of Equity

42


Marine Money International Ranking 2006Marine Money International Ranking 2006

Source Marine MoneySource Marine Money43

Marine Money International Rankings 2006Summary of 1st Ranks Vs. PSL Rank Performance RanksParticulars 1st Rank 1st Rank Ratio PSL Rank PSL Ratio Industry MedianTotal Return to Shareholders (TRS) Precious Shipping 235.07% 1 235.07% 14.14%Turnover Rate Noble Group 3.60 28 0.66 0.39Profit Margin Double Hull Tankers 75.71% 13 64.55% 32.35%Return on Equity(ROE) Frontline Limited 77.18% 14 29.68% 16.94%Return on Asstes(ROA) Courage Marine Group 32.39% 2 26.19% 9.23%Price / Book Value Trailer Bridge Inc 107.61 17 2.21 1.65


Shareholder’s returnsShareholder’s returns

44


SHAREHOLDER SCORECARDSHAREHOLDER SCORECARD--Bangkok Post 18th May 2007Bangkok Post 18th May 2007

45


Total Return to Shareholders: 1993 to 2007Total Return to Shareholders: 1993 to 2007

46

-85

4 6 9 625

51 6082.2

61-10

-85 -81 -75 -85 -76 -70-45

6

149.2

209.2

67

-100

-50

0

50

100

150

200

250

IPO19

93 D

ividen

d19

94 D

ividen

d1 F

or 1 R

ight(1

995)

1995

Divid

end

1996

Divi

dend

2003

Divid

end

2004

Divid

end

2005

Divid

end

2006

Divid

end (

and 1

for 1

bonu

s)

2007

Inter

im D

ividen

d

Bah

t

0510152025303540

No

of s

hare

s

Inflow/Outflow

Net Cash Position before sale of investment

No of Shares held

1 IPO share value after 14 years @ 25.50 B / share (as of 29th D1 IPO share value after 14 years @ 25.50 B / share (as of 29th Dec 2007) adjusted for ec 2007) adjusted for rights , splits and bonus = 1020 Bahtrights , splits and bonus = 1020 BahtTotal net Cash position = Baht 1229.2, Returns = 14.46 timesTotal net Cash position = Baht 1229.2, Returns = 14.46 times


A A PRECIOUS SHIPPING PRECIOUS SHIPPING

PRESENTATIONPRESENTATION

47

precious shipping public company limited

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