Attached files
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| 8-K - Eagle Bulk Shipping Inc. | d1041932_8-k.htm |
| EX-99.1 - Eagle Bulk Shipping Inc. | d1044259_ex99-1.htm |
Eagle
Bulk Shipping Inc.
3Q09
Results Presentation
Eagle
Bulk Shipping Inc.
5
November 2009
Eagle
Bulk Shipping Inc.
1
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.
Agenda
2
n 3Q
2009 Results
n Company
Updates
n Industry
View
n Financial
Overview
n Conclusion
3Q09
Results
Eagle
Bulk Shipping Inc.
3Q
2009 Highlights
4
n 3Q Net Income of
3.9 million, or $0.06 per share,
as
adjusted for one-time, non
-cash charge related to amendment to debt facility
-cash charge related to amendment to debt facility
n Net Income without
adjustments of $0.5 million, or $0.01 per share
n Net time charter
revenue of $41.6 million
n EBITDA1 of
$25.0
million
n Fleet Utilization
of 99.7%
n Five vessels
chartered on rates that are tied to the Baltic Supramax Index
("BSI")
("BSI")
n Established
in-house technical capabilities to manage Eagle Bulk vessels and
third party vessels
third party vessels
1 EBITDA, as defined
by our credit agreement, is Net Income plus Interest Expense, Depreciation and
Amortization, and Exceptional Items
Steady
Cash Flow and Continued Operating Excellence
Company
Updates
Eagle
Bulk Shipping Inc.
6
Charter
Updates
Charter
Updates
Fleet
Growth Ensures Revenue Stability with Upside Potential
n Cardinal chartered
one year at $16,250 per day
n 2010 - Balanced
approach with 63% fixed coverage, including:
n Five vessels
placed on charters tied to Baltic Supramax Index
*
Commencing Jan-end 2010
Eagle
Bulk Shipping Inc.
7
Supramax
Newbuildings - Begin to Deliver EBITDA Growth
Supramax
Newbuildings - Begin to Deliver EBITDA Growth
*
Excluding profit sharing
Existing
Cash, Undrawn Facility and Operating Cash Flow to Fund Newbuildings
Contracted
Revenue: $730 Million*
n
Took
delivery of the Bittern, which commenced 10 year time charter with minimum
contracted
revenue of $62m
revenue of $62m
n Canary expected to
be delivered in 4Q09, with minimum contracted revenue of $61m
n Thrasher expected
to be delivered in 4Q09, with minimum contracted revenue of
$61m
Eagle
Bulk Shipping Inc.
8
Handymax/Supramax
Capesize
Eagle
vessels carried 2.3 million tons of cargo in 3Q
2009 MISC.
cargoes include eucalyptus chips, phosrock
Supramax Vessels
Benefit from Shifts in Commodity Movements
Supramax Vessels
Benefit from Shifts in Commodity Movements
69%
of Eagle’s 3Q09 Cargoes Were “Capesize and Panamax
Cargoes”
Industry
View
Eagle
Bulk Shipping Inc.
Purchasing
Managers’ Index
PMI
Above 50 Indicates Growing Industrial Production and Raw Materials
Demand
Source: various
sources
10
Manufacturing
Surveys Indicate a Global Recovery
Eagle
Bulk Shipping Inc.
11
Source: BCA
Research, PBoC
§ 3Q growth fastest
in a year, supported by
infrastructure investment and record bank
lending
infrastructure investment and record bank
lending
§ 26% MoM rise in new
lending in Sep, and a
record $1.27 trillion in new loans in the first
nine months
record $1.27 trillion in new loans in the first
nine months
§ Surging auto sales
helped industrial
production to rise 13.9% in September, the
fastest pace in more than a year
production to rise 13.9% in September, the
fastest pace in more than a year
§ Urban fixed-asset
investment climbed 33.3
percent in the first nine months, as the $586
billion stimulus plan spurred the construction
of roads and power plants
percent in the first nine months, as the $586
billion stimulus plan spurred the construction
of roads and power plants
§ Half of medium and
long-term loans in 1H09
were directed to infrastructure and real estate
sectors
were directed to infrastructure and real estate
sectors
Chinese Economy
Continues to Show Growth Momentum
Eagle
Bulk Shipping Inc.
n China’s growth is
resource intensive and
lacks reserves
lacks reserves
§ 43% of global coal
consumption vs. 14% of
the world’s proven coal reserves; 44% of
global iron ore consumption vs. 9% of the
world’s proven iron ore reserves
the world’s proven coal reserves; 44% of
global iron ore consumption vs. 9% of the
world’s proven iron ore reserves
§ September Iron ore
imports rebounded
30% MoM to a record high of 64.6 million
tones
30% MoM to a record high of 64.6 million
tones
§ China’s crude steel
production rose 29% in
September to 50.71 million metric tons, the
second-highest on record
September to 50.71 million metric tons, the
second-highest on record
Source: BOA ML
report, Bloomberg
China
Becomes Net Importer of Coal in 2009
12
China’s Demand for
Commodities Remains Strong
Eagle
Bulk Shipping Inc.
13
India’s Power
Demand Fuels Coal Trade
India’s Power
Demand Fuels Coal Trade
Source: India’s
Central Electricity Authority, Clarksons
Indian
Coal Imports to be Key Demand Driver for Supramax
n Power
generation sector faces huge demand-supply gap for coal
n Slow capacity
addition widening the gap: only 13 GW added in 2007-2008 against the target
of
27 GW
27 GW
n Over 40% of Indian
population still don’t have access to electricity
Eagle
Bulk Shipping Inc.
14
n Clarkson Research
estimated 29% drybulk
slippage from the beginning of 2009
slippage from the beginning of 2009
n Extensive analysis
by ABS suggests that through
2012 almost 1,000 bulk carriers can be
considered at risk.
2012 almost 1,000 bulk carriers can be
considered at risk.
n China’s National
Development and Reform
Commission announced in Oct that half the
orderbook (50m dwt) this year at Chinese
shipyards would be either cancelled or delayed
Commission announced in Oct that half the
orderbook (50m dwt) this year at Chinese
shipyards would be either cancelled or delayed
n Wang Jinlian,
Secretary General of China
Association of National Shipbuilding Industry, said
at China Shipbuilding Summit in Oct that more
than a third of Chinese shipyards would be idled
Association of National Shipbuilding Industry, said
at China Shipbuilding Summit in Oct that more
than a third of Chinese shipyards would be idled
Orderbook Update -
Sub-Panamax Sector Benefits Most from Slippage
Orderbook Update -
Sub-Panamax Sector Benefits Most from Slippage
Source: Clarkson,
ABS, China’s National Development and Reform Commission
Orderbook
Remains a Concern but Actual Deliveries Fall Behind
Schedule
Eagle
Bulk Shipping Inc.
15
About
224 bulkers (9.2 million DWT) have been sold for scrap this year
Scrapping
Update
Scrapping
Update
Source:
Clarkson
About
2500 bulkers (111 million DWT) are over 20 years old
Financial
Overview
Eagle
Bulk Shipping Inc.
17
3rd Quarter
Earnings
Eagle
Bulk Shipping Inc.
Balance
Sheet
18
Conclusion
Eagle
Bulk Shipping Inc.
20
3Q
2009 Summary
3Q
2009 Summary
n Cash
flow stability
Steady cash flow
from fixed charter coverage
n Upside
potential
Five vessels placed
on index-based charters
Newbuildings begin
to deliver EBITDA growth
n Operating
performance
Continuing superior
fleet utilization - 99.7% in 3Q
n Established
in-house technical management
Eagle Bulk
fleet
Third party
vessels
Fleet
Growth Continues: 7 Vessels to Deliver by End 1Q10
5
Vessels Chartered
with Revenue of $259 M; 2 Vessels Open
Appendix
Eagle
Bulk Shipping Inc.
22
Current Fleet - 92%
Built After 2000
Current Fleet - 92%
Built After 2000
Eagle
Bulk Shipping Inc.
23
* The
charterer of Sparrow has paid in advance for the duration of the charter an
amount equal to the difference between the prevailing daily charter rate and
a
new cash market rate per day. This amount has been recorded in Deferred Revenue in the Company’s financial statements and is being recognized into revenue
ratably over the charter period such that the daily charter rate remains effectively the prevailing charter rate per day (accounting rate).
new cash market rate per day. This amount has been recorded in Deferred Revenue in the Company’s financial statements and is being recognized into revenue
ratably over the charter period such that the daily charter rate remains effectively the prevailing charter rate per day (accounting rate).
** The
charterer of the PEREGRINE has exercised the option to extend the charter period
by 11 to 13 months. The rate for the option period is index based with
a minimum daily time charter rate of $10,500 and a profit share which is equal to 50% of the difference between the base rate and the average of the trailing
Baltic Supramax Index for each 30 day hire period.
a minimum daily time charter rate of $10,500 and a profit share which is equal to 50% of the difference between the base rate and the average of the trailing
Baltic Supramax Index for each 30 day hire period.
Charter
Updates
Eagle
Bulk Shipping Inc.
Eagle
Bulk Shipping Inc.