lse asiapac 191006 v3 - pacific basin shipping limited · presentation to lse asia pacific ship...

Pacific Basin

19 October 2006

Presentation to

LSE Asia Pacific Ship Finance Conference 2006

“Future prospects for owners in the Asia- Pacific region”

Richard Hext, CEO

2

www.pacbasin.com 2343.HK

World Seaborne Dry Bulk Trade

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E 2006E

mill

ion

tonn

es

Iron Ore Coal Grains

Bauxite/Alumina Phosphate Other Dry Bulks*

2,039 1,895 1,897 1,911

1,816

World Seaborne Dry Bulk Trade (million tons)

Source: Clarkson

2,097 2,169

2,453 2,557 2,645

2,291

*Includes Sugar, Agribulks, Fertiliser, Scrap, Cement, Coke, Pig Iron, Forest Products, Steel Products, Others

3


Asia’s Increasing Dominance

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1998 1999 2000 2001 2002 2003 2004 2005 2006E

Other

Asia

Europe

Regional share of seaborne trade in major bulks* (million tonnes)

29% 27%27%

26% 25%26%

24%22%

22%

51%53%

54%55% 56%

57%59% 61% 62%

20% 20% 20% 19% 18% 17% 17% 17% 16%

*Includes all imports of iron ore, petcoke, thermal coal, grains. Source: Clarkson, Sept 2006

4


China’s Steel Production

Source: IISI

5

10

15

20

25

30

35

40

Oct-98 Jul-99 Apr-00 Jan-01 Oct-01 Jul-02 Apr-03 Jan-04 Oct-04 Jul-05 Apr-06-10%

0%

10%

20%

30%

40%

50%

60%

Metric Tonnes (millions)

% y-o-y grow th

China Steel Production

5


Demand - China’s Iron Ore Imports

30

0

5

10

15

20

25

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

7.9

9.110.7

9.5

11.4 12.8 12.7 12.5

16.915.7

17.819.0

21.1

22.722.6

25.4

2002 2003 2004 2005

2002 average : 9.3

2003 average :12.4

2004 average :17.3

2005 average :22.9

Mil Tons/ Month 2006 average: 27.5

Q1

2006

26.9 26.9

Q2

Source: Bloomberg

Q3

28.6

6


Demand – China’s Steel Exports

Source: Everbright Securities

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2002 2003 2004 2005 2006

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2002 average : 0.5

2003 average : 0.6

2004 average : 1.2

2005 average : 1.7

0.30.4

0.6 0.5 0.50.7

0.6 0.6 0.5

1.0

1.4

1.91.7

2.1

1.41.6

2.2

3.5

Mil Tons/ Month2006 YTD average : 3.34.5

4.1

Q3

7


Demand – China’s Cement Exports

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2002 2003 2004 2005

Q1

2006

Q2

0.40.5 0.4 0.4 0.4 0.4 0.5 0.5

0.30.6

0.7 0.70.9

1.7

2.4 2.42.6

3.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Mil Tons/ Month

2002 average : 0.4

2003 average :0.5

2004 average :0.6

2005 average :1.9

Source: Bloomberg

2006 YTD average : 3.0

8


China’s Growth Pattern – Steel Consumption

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

0 5 10 15 20 25 30

China (from 1990)Japan (from 1950)Korea (from 1970)

Steel consumption per capita (tons)

YearSource: UBS

9


China’s Growth Pattern – Electricity Consumption

0

1000

2000

3000

4000

5000

6000

0 5 10 15 20 25 30


Electricity consumption per capita (MWh)

Year Source: UBS

10


China’s Growth Pattern – Cement Consumption

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

0 5 10 15 20 25 30


Cement consumption per capita (MWh)

YearSource: UBS

11


China’s Growth Pattern – Motor Vehicles per capita

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0 5 10 15 20 25 30


Motor vehicles per capita

YearSource: UBS

12


World Fleet & Orderbook

Source: Clarksons

105

123

360

359

27

59

75

123

0 100 200 300 400 500

Oth

er ty

pes

Con

tain

erD

ry B

ulk

Tank

er

October 06

34%

21%

48%

26%

% of Existing FleetOrderbookExisting Orderbook

Mil dwt

13


Drybulk Fleet & Orderbook

Source: Clarksons

Han

dysi

zeC

apes

ize

Han

dym

axPa

nam

ax

0 50 100 150

Existing 2006 2007 2008+

117 5 22

99 3 8

70 2 7

35

9

8

5

11 2

30% 11.2

19% 11.5

20% 11.4

Orderbook

Fleet (%)

Average

Age

Mil dwt

October 2006

11% 19.7PB average vessel age = 6 years

32% of world handysize fleet > 25 years old

14


Dry Bulk Scrapping

Capesize100K+

Panamax60-100K

Handymax40-60K

Handysize(10-40K)

Handysize(25-35K)

OrderbookFleet > 20 years

56%115%

112%

740%

452%

Source: Clarksons

34.1

18.7

13.7

6.24.2

0

5

10

15

20

25

30

35

40

45

50

DWT million

15


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jan-02

Apr-02

Jul-02

Oct-02

Jan-03

Apr-03

Jul-03

Oct-03

Jan-04

Apr-04

Jul-04

Oct-04

Jan-05

Apr-05

Jul-05

Oct-05

Jan-06

Apr-06

Jul-06

Oct-06

The Baltic Dry Index

5681

2622

6208

1747

4159

16


1-Year Time Charter Rates

61,500

28,250

29,250

18,750

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06

Handysize Handymax Panamax Capesize

$US/day

Source: Clarkson's

17


Dry Bulk Carrier Sale & Purchase Market

75

100

125

150

175

200

225

250

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Reb

ased

pric

e in

dex

(Jan

00

= 10

0)

Clarkson’s 5 year-old Secondhand Dry Bulk Vessel Price Index

18


Pacific Basin Group Overview

• World’s largest modern handysize vessel owner/operator

• Established in 1987 as specialist in Asia Pacific region

• Listed twice (NASDAQ 1994, HKEX 2004), privatized 1996

• Experienced management and personnel with proven track record in shipping (Swire, Jardines, Maersk, Torm)

• Headquartered at the heart of the world’s fastest growing economies

19


Our Fleet

31 Dec 2004Delivered


October 2006incl. newbuildings

1

33

7

4

2

17

4

6

22

2

9

2

0

10

20

30

40

50

60

70

80

4550

17Finance Lease

10Operating

Lease

72

17Finance Lease

14Operating

Lease

27

31

33

Handymax

OwnedCharteredManagedNewbuilding

Handysize

42

Number of vessels

19

17

41


5

20


Cargoes Carried

*Includes Cement Clinker, Gypsum, Alumina, Sands, Soda Ash, Agriculture Products, Ore, Aggregates and other bulk products

Handysize1H06 Cargo Volume

Log & Forest Products

13%

Cement12%

Steel & Scrap

6%

Grains9%

Fertilisers10%

Other Bulks*

27%

Concentrates7%

Petcoke5%

Coal/Coke7%

Salt4%

7.3mt

21


What the brokers are saying…Broker Analysts 12mth Target Recommendation

1 Lehman Thomas Kim HK$ 7.50 Overweight

2 Merrill Lynch Teddy Tsai HK$ 5.10 Buy

3 UBS Damien Horth HK$ 5.00 Buy

4 Fearnley Fonds Rikard Vabo HK$ 5.00 Buy

5 Evolution Neil Juggins HK$ 5.00 BuyJane Guo

6 Goldman Sachs Jean-Louis Morisot HK$ 4.80 BuyJulie Lim

7 Cazenove Alex Chang HK$ 4.80 Outperform

8 Macquarie Michael Chan HK$ 4.75 Outperform

9 DBS Gideon Lo HK$ 4.50 Hold

10 Daiwa Geoffrey Cheng HK$ 4.45 Hold

11 Credit Suisse Andrew Lee HK$ 4.30 NeutralPeter Hilton

12 Bank of China Jimmy Lam HK$ 3.56 Underweight

13 CLSA Debra Lui HK$ 3.00 Sell

Ship brokers covering the handysize sector: JE Hyde, Fearnleys, HSBC

22


Thank You

This presentation will be available on

www.pacbasin.com

23


This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Pacific Basin and certain plans and objectives of the management of Pacific Basin.

Such forward looking statements involve known and unknown risks,uncertainties and other factors which may cause the actual results or performance of Pacific Basin to be materially different from any future results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding Pacific Basin's present and future business strategies and the political and economic environment in which Pacific Basin will operate in the future.

Disclaimer

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