Attached files
| file | filename |
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| 8-K - Eagle Bulk Shipping Inc. | d1225996_8-k.htm |
EAGLE BULK SHIPPING
INC.
Jefferies 2011 Global Shipping Conference
7 September 2011
EAGLE BULK
SHIPPING INC.
2
Forward Looking Statements
This presentation contains certain statements that may be deemed to be “forward-looking statements” within the
meaning of the Securities Acts. Forward-looking statements reflect management’s current views with respect to
future events and financial performance and may include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and other statements, which are other
than statements of historical facts. The forward-looking statements in this presentation are based upon various
assumptions, many of which are based, in turn, upon further assumptions, including without limitation,
management's examination of historical operating trends, data contained in our records and other data available
from third parties. Although Eagle Bulk Shipping Inc. believes that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant uncertainties and contingencies which
are difficult or impossible to predict and are beyond our control, Eagle Bulk Shipping Inc. cannot assure you that
it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could
cause actual results to differ materially from those discussed in the forward-looking statements include the
strength of world economies and currencies, general market conditions, including changes in charterhire rates
and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and
unscheduled drydocking, changes in our vessel operating expenses, including dry-docking and insurance costs,
or actions taken by regulatory authorities, ability of our counterparties to perform their obligations under sales
agreements, charter contracts, and other agreements on a timely basis, potential liability from future litigation,
domestic and international political conditions, potential disruption of shipping routes due to accidents and
political events or acts by terrorists. Risks and uncertainties are further described in reports filed by Eagle Bulk
Shipping Inc. with the US Securities and Exchange Commission.
meaning of the Securities Acts. Forward-looking statements reflect management’s current views with respect to
future events and financial performance and may include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and other statements, which are other
than statements of historical facts. The forward-looking statements in this presentation are based upon various
assumptions, many of which are based, in turn, upon further assumptions, including without limitation,
management's examination of historical operating trends, data contained in our records and other data available
from third parties. Although Eagle Bulk Shipping Inc. believes that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant uncertainties and contingencies which
are difficult or impossible to predict and are beyond our control, Eagle Bulk Shipping Inc. cannot assure you that
it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could
cause actual results to differ materially from those discussed in the forward-looking statements include the
strength of world economies and currencies, general market conditions, including changes in charterhire rates
and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and
unscheduled drydocking, changes in our vessel operating expenses, including dry-docking and insurance costs,
or actions taken by regulatory authorities, ability of our counterparties to perform their obligations under sales
agreements, charter contracts, and other agreements on a timely basis, potential liability from future litigation,
domestic and international political conditions, potential disruption of shipping routes due to accidents and
political events or acts by terrorists. Risks and uncertainties are further described in reports filed by Eagle Bulk
Shipping Inc. with the US Securities and Exchange Commission.
EAGLE BULK
SHIPPING INC.
3
§ Strategy
§ Company
§ Industry
§ Financials
§ Key Takeaways
Agenda
Strategy
EAGLE BULK
SHIPPING INC.
Global Leader in the Supramax Asset Class
5
5
|
Company Statistics
|
||||
|
|
June 2005
|
September 2011
|
% Change
|
|
|
Fleet
|
Number of vessels
|
11
|
45*
|
+309.1%
|
|
Total DWT
|
540,456
|
2,451,641
|
+353.6%
|
|
|
OTW Average Age (years)
|
5.8
|
4.4
|
-24.1%
|
|
|
Commercial
Chartering Strategy (6 months, 2nd half)
|
Fixed
|
100%
|
55%
|
-
|
|
Indexed
|
0%
|
8%
|
-
|
|
|
Open
|
0%
|
37%
|
-
|
|
|
Operational
|
Fleet Utilization
|
n/a
|
99.5%
|
-
|
|
Technical Managers
|
1
|
3**
|
-
|
|
|
Financial
|
Enterprise Value
|
$509m
|
$1,203m
|
+136.3%
|
**Including in-house unit.
*Includes one remaining newbuilding.
EAGLE BULK
SHIPPING INC.
6
Source: Clarksons
Supramax Asset Class Continues to Outperform
Eagle Bulk supramaxes generating positive cash flow
2011 Average Daily Spot Rates
(January 1 to August 31)
EAGLE BULK
SHIPPING INC.
Evolving Commercial Strategy, Supramax Focused
7
7
Almost 10m tons in COA business booked, equating to 2,500 vessel days
Company
EAGLE BULK
SHIPPING INC.
9
|
|
Vessel
|
DWT
|
Year
Built |
|
Vessel
|
DWT
|
Year
Built |
|
Vessel
|
DWT
|
Year
Built |
|
1
|
Roadrunner
|
57,809
|
2011
|
16
|
Thrasher
|
53,360
|
2010
|
31
|
Skua
|
53,350
|
2003
|
|
2
|
Puffin
|
57,809
|
2011
|
17
|
Golden Eagle
|
55,989
|
2010
|
32
|
Shrike
|
53,343
|
2003
|
|
3
|
Petrel
|
57,809
|
2011
|
18
|
Egret Bulker
|
57,809
|
2010
|
33
|
Tern
|
50,200
|
2003
|
|
4
|
Owl
|
57,809
|
2011
|
19
|
Crane
|
57,809
|
2010
|
34
|
Kittiwake
|
53,146
|
2002
|
|
5
|
Oriole
|
57,809
|
2011
|
20
|
Canary
|
57,809
|
2009
|
35
|
Goldeneye
|
52,421
|
2002
|
|
6
|
Nighthawk
|
57,809
|
2011
|
21
|
Bittern
|
57,809
|
2009
|
36
|
Osprey I
|
50,206
|
2002
|
|
7
|
Thrush
|
53,297
|
2011
|
22
|
Stellar Eagle
|
55,989
|
2009
|
37
|
Falcon
|
50,296
|
2001
|
|
8
|
Martin
|
57,809
|
2010
|
23
|
Crested Eagle
|
55,989
|
2009
|
38
|
Peregrine
|
50,913
|
2001
|
|
9
|
Kingfisher
|
57,776
|
2010
|
24
|
Crowned Eagle
|
55,940
|
2008
|
39
|
Condor
|
50,296
|
2001
|
|
10
|
Jay
|
57,802
|
2010
|
25
|
Woodstar
|
53,390
|
2008
|
40
|
Harrier
|
50,296
|
2001
|
|
11
|
Ibis Bulker
|
57,775
|
2010
|
26
|
Wren
|
53,349
|
2008
|
41
|
Hawk I
|
50,296
|
2001
|
|
12
|
Grebe Bulker
|
57,809
|
2010
|
27
|
Redwing
|
53,411
|
2007
|
42
|
Merlin
|
50,296
|
2001
|
|
13
|
Gannet Bulker
|
57,809
|
2010
|
28
|
Cardinal
|
55,362
|
2004
|
43
|
Sparrow
|
48,225
|
2000
|
|
14
|
Imperial Eagle
|
55,989
|
2010
|
29
|
Jaeger
|
52,248
|
2004
|
44
|
Kite
|
47,195
|
1997
|
|
15
|
Avocet
|
53,462
|
2010
|
30
|
Kestrel I
|
50,326
|
2004
|
|
|
|
|
|
TOTAL VESSEL COUNT
|
44
|
TOTAL DWT
|
2,393,641
|
AVERAGE AGE (by DWT)
|
4.4yrs
|
One of the Largest and Youngest Supramax Fleets
|
2H 2011
CHARTERING POSITION |
FIXED
|
INDEXED
|
OPEN
|
|
55%
|
8%
|
37%
|
EAGLE BULK
SHIPPING INC.
10
Vessel-owned Days
Eagle Bulk Fleet CAGR of 26.4%
One remaining newbuilding to take delivery of in 4Q 2011
EAGLE BULK
SHIPPING INC.
11
Eagle Bulk Cargo Mix
|
2Q 2011
|
|||
|
|
|
||
|
|
|
||
|
3
|
Iron Ore
|
655,711
|
17.5%
|
|
Total Major Bulk
|
2,100,355
|
56.1%
|
|
|
|
|
|
|
|
Minor Bulk
|
|
|
|
|
4
|
Other Ores
|
355,600
|
9.5%
|
|
5
|
Miscellaneous
|
292,976
|
7.8%
|
|
6
|
Steels / Pig Iron / Scrap
|
203,625
|
5.4%
|
|
7
|
Potash / Fertilizer
|
185,441
|
5.0%
|
|
8
|
Coke
|
181,491
|
4.9%
|
|
9
|
Forest Products
|
167,931
|
4.5%
|
|
11
|
Cement
|
75,106
|
2.0%
|
|
13
|
Alumina / Bauxite
|
35,421
|
1.0%
|
|
Total Minor Bulk
|
1,639,122
|
43.9%
|
|
|
|
|
|
|
|
Total Cargoes
|
3,739,477
|
100.0%
|
|
Cargo diversification leads to stable earnings
Industry
EAGLE BULK
SHIPPING INC.
13
Source: Barclays, Clarksons, Commodore, USDA
§ Drybulk newbuilding vessel deliveries have totaled
52.5m DWT YTD, +13% Y/Y.
52.5m DWT YTD, +13% Y/Y.
§ Capesize representing 48% of total.
§ Australian coal production remains below pre-flooding
levels, 30m+ MT lost.
levels, 30m+ MT lost.
§ Floods in the Midwest impacted transportation along
the Mississippi River leading to force majeure, 2Q 2011
average weekly barge shipments decreased 26% Q/Q.
the Mississippi River leading to force majeure, 2Q 2011
average weekly barge shipments decreased 26% Q/Q.
§ Indian iron ore exports remain subdued due to stalled
resumption of product out of Karnataka and the onset
of the monsoon season, 2011 exports are expected to
be down by 20% Y/Y to 75m MT.
resumption of product out of Karnataka and the onset
of the monsoon season, 2011 exports are expected to
be down by 20% Y/Y to 75m MT.
§ Japanese trade impacted by tsunami, monthly coal
imports down 16% / steel plate prices up 20%.
imports down 16% / steel plate prices up 20%.
Deliveries and Trade Disruptions Impact 2011
Vessel Earnings Pressured
Japanese Coal Imports
(in m MT)
Japanese Steel Plate
($ / MT)
EAGLE BULK
SHIPPING INC.
14
Source: Barclays, Macquarie, MS, USDA
§ Net-fleet growth to continue at elevated
levels for the next 12+ months.
levels for the next 12+ months.
§ Resumption (pick-up) in Indian iron ore exports
remains questionable.
remains questionable.
§ High Chinese iron ore stockpiles along with continued
power-usage rationing may lead to short-term
cap on imports.
power-usage rationing may lead to short-term
cap on imports.
§ Chinese coal restocking has been rampant since
hitting a low earlier in the year, Indonesian exports
have benefited.
hitting a low earlier in the year, Indonesian exports
have benefited.
§ Japanese post-tsunami recovery / reconstruction to
benefit coal, iron ore, steel products, and
lumber.
benefit coal, iron ore, steel products, and
lumber.
Near-term Fundamentals for Drybulk Remain Mixed
EAGLE BULK
SHIPPING INC.
15
Source: Clarksons, Macquarie, MAF, Potash Corp.
§ Russian grain export ban lifted in July,
2011/2012 exports projected at 12m
MT, +300% Y/Y.
2011/2012 exports projected at 12m
MT, +300% Y/Y.
§ Chinese soybean imports to reach 59m MT,
+10.3% Y/Y.
+10.3% Y/Y.
§ Forest products represent approximately
180m MT in annual drybulk trade.
180m MT in annual drybulk trade.
§ New Zealand log exports to Japan
expected to pick-up significantly as
reconstruction initiates.
expected to pick-up significantly as
reconstruction initiates.
§ Global minor bulk trade for 2011 projected to
reach 1.2 billion MT, +5% Y/Y.
reach 1.2 billion MT, +5% Y/Y.
Grain/Agricultural and Minor Bulk Trades Firm
Minor bulks represent 33% of total drybulk trade
Soybean Production and Chinese Imports
(in m MT)
(in m MT)
New Zealand Log Exportss
(12m MT per year)
EAGLE BULK
SHIPPING INC.
16
Source: Clarksons, Macquarie, Peabody, SSY
§ Japanese nuclear power plant disaster has led to
Germany shutting down 8 of its plants, or 8.5 GW of
electricity capacity.
Germany shutting down 8 of its plants, or 8.5 GW of
electricity capacity.
§ Opposition to shale gas exploration is increasing, could
lead to further demand for coal.
lead to further demand for coal.
§ Over 250 GW of coal-fueled power capacity coming
online globally by 2015.
online globally by 2015.
§ Incremental seaborne thermal coal product over the
next 5+ years to primarily come from Indonesia and
Australia.
next 5+ years to primarily come from Indonesia and
Australia.
§ Delays in Australian capacity expansion will
require Indonesia to make-up short-fall.
require Indonesia to make-up short-fall.
§ Global steel production expected to increase by 30% or
400m MT by 2015, boosting demand for iron ore and
coking coal.
400m MT by 2015, boosting demand for iron ore and
coking coal.
Strong Long-term Demand for Coal and Iron Ore
Coal to dominate drybulk trade growth
Projected Global Steel Production
(in m MT)
4yr Projected Increase in SeaborneThermal
Coal Trade
Coal Trade
(in m MT)
EAGLE BULK
SHIPPING INC.
17
Source: Clarksons, ICAP, Seatrade
Slow-steaming strategy coming into play, positive for utilization
Vessel Supply Growth Curtailing
§ Drybulk newbuilding deliveries have peaked and
the orderbook continues to shrink.
the orderbook continues to shrink.
§ New orders down 80% Y/Y.
§ Orderbook, as a % of fleet,
down 45% since 2008.
down 45% since 2008.
§ Slippage/cancellations running at +35%, subduing
supply growth.
supply growth.
§ First half 2011 scrapping amounted to 13m DWT,
+122% over 2010 full-year total.
+122% over 2010 full-year total.
§ Scrap rates remain at +$500 per LWT.
§ Rising steel plate prices and CNY appreciation
continue to squeeze Chinese shipyards’ margins,
providing support to newbuilding prices.
continue to squeeze Chinese shipyards’ margins,
providing support to newbuilding prices.
§ Financing remains an issue.
Drybulk Scrapping
(in m DWT)
(in m DWT)
Drybulk Newbuilding Deliveries
(3 month trailing average, in m DWT)
Financials
EAGLE BULK
SHIPPING INC.
19
Earnings (in thousands, except per share data)
|
Three Months Ended June 30
|
|||
|
|
2011
|
2010
|
|
|
REVENUES, net of commissions
|
$76,405.4
|
$65,612.8
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
Voyage expenses
|
8,125.3
|
-
|
|
|
Vessel expenses
|
21,289.8
|
16,052.9
|
|
|
Charter hire expenses
|
11,029.8
|
-
|
|
|
Depreciation and amortization
|
17,640.3
|
15,537.1
|
|
|
General and administrative expenses
|
8,038.8
|
10,479.4
|
|
|
Total operating expenses
|
$66,124.0
|
$42,069.4
|
|
OPERATING INCOME
|
$10,281.4
|
$23,543.4
|
|
|
OTHER EXPENSES
|
|
|
|
|
|
Interest expense
|
11,672.4
|
12,607.7
|
|
|
Interest income
|
(29.4)
|
(76.2)
|
|
|
Other expense
|
76.7
|
-
|
|
|
Total other expense, net
|
$11,719.7
|
$12,531.5
|
|
NET INCOME (LOSS)
|
($1,438.3)
|
$11,011.9
|
|
|
|
|
|
|
|
EBITDA*
|
$28,804.8
|
$41,669.1
|
|
|
EPS (Basic and Diluted)
|
($0.02)
|
$0.18
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
Basic
|
62,571,322
|
62,176,684
|
|
|
Diluted
|
62,571,322
|
62,337,774
|
EAGLE BULK
SHIPPING INC.
20
Balance Sheet (in thousands)
|
Period ending June 30, 2011
|
||
|
|
|
|
|
|
|
|
|
Cash and Restricted Cash
|
$73,578.9
|
|
|
Other Current Assets
|
29,327.9
|
|
|
Vessels, net
|
1,616,579.6
|
|
|
Advances for vessel construction
|
153,070.6
|
|
|
Other Assets
|
23,970.7
|
|
|
Total Assets
|
$1,896,527.7
|
|
|
Current Liabilities
|
37,444.0
|
|
|
Long-term Debt
|
1,151,354.5
|
|
|
Other Liabilities
|
36,730.4
|
|
|
Stockholder's Equity
|
$670,998.8
|
|
|
Total Liabilities and Stockholder's Equity
|
$1,896,527.7
|
|
EAGLE BULK
SHIPPING INC.
21
|
Expense breakdown*
|
|
|
Vessel Opex
|
$5,103
|
|
Technical Management
|
319
|
|
G&A
|
1,307
|
|
Interest
|
3,300
|
|
Drydocking
|
603
|
|
Total
|
$10,632
|
2011 Estimated Cash Break-Even Levels
$10,632 per vessel per day cash break-even for 2011
*ASSUMPTIONS:
§ Vessel expenses are comprised of the following: crew wages and related, insurance, repair and maintenance, stores, spares and related inventory,
tonnage taxes, newbuilding pre-operating costs (associated with taking delivery of vessels).
tonnage taxes, newbuilding pre-operating costs (associated with taking delivery of vessels).
§ Interest expense takes into consideration Eagle Bulk’s view and projection of 3m LIBOR rates.
Key Takeaways
EAGLE BULK
SHIPPING INC.
23
Key Takeaways
|
Supramax Asset
Class |
§ Optimal size to load/discharge at most ports around the globe.
§ Onboard cranes allow for the loading/discharging of cargo without the
requirement of onshore equipment. § Vessel’s versatility/flexibility yield most stable earnings in drybulk.
|
|
Eagle Bulk Fleet
|
§ One of the youngest, largest, and most homogeneous in the world.
|
|
Eagle Bulk
Commercial |
§ Global team with presence in New York and Singapore allows for 24/7
market coverage. § Opportunistic and dynamic chartering strategy.
§ Diversified approach/tools allow for capitalizing in all market cycles.
|
|
Eagle Bulk
Operations |
§ Excellent fleet management track record, near-100% utilization.
§ Utilize 3 technical managers (including in-house group), allows for
benchmarking and improved control/costs. |
|
Eagle Bulk
Management |
§ Experienced U.S.-based management team.
|
