5. Profit & Loss
Key figures:
(in thousands of $)
2012 2012
Jul-Sep Apr-Jun
Operating revenue 56 473 64 036 Revenues down on lower
Vessel voyage expenses -9 516 -11 440 trading activity, lower
Provision for bad debt -2 575 -3 624 earnings on Feng and lower
Vessel operating expenses -10 591 -10 133
Charter hire expenses -6 658 -8 213
spot rates
Administrative expenses -3 580 -3 011 Voyage expenses and charter
Depreciation and amortisation -8 622 -8 377 hire expenses down on lower
Impairment -25 200 -2 900
Other gain/ (losses net) 583 -1 915
trading activity
Operating profit -9 685 14 423 Total provision $6.2 million on
Interest income 437 339 Feng
Interest expense -5 239 -5 515
Interest swap -1 713 -1 694 Impairment related to sailing
Other financial items -916 -1 153 vessels
Taxation 0 0
Profit for the period -17 116 6 400 Lower interest rate and
Profit attributable to:
JPY/USD exchange rate
Owners of the parent -17 145 6 316 impact finance costs
Non-controlling interest 29 84
Profit for the period -17 116 6 400
6. Balance Sheet
(in thousands of $) 2012 2011
Sep 30 Dec 31
ASSETS
Vessels and equipment, net 618 222 637 441 • Impairment sailing vessels
Vessels held under finance leases, net 142 587 147 991
Vessels under construction 207 935 216 965 • Two installments paid
Other assets 10 502 10 681
Total non-current assets 979 246 1 013 079
Cash and cash equivalents 101 222 138 284 •Cash down on paid installments,
Trade and other receivables 17 085 22 789 paid down debt, repurchase
Other current assets 7 165 37 920 shares and CB
Total current assets 125 472 198 993
Total assets 1 104 718 1 212 071
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 45 350 45 699
Additional paid in capital 102 686 104 801
Other reserves 12 481 14 110
Retained earnings 367 537 364 779
Non-controlling interest 541 496
Total Equity 528 594 529 885
• Long term debt down from
Long term debt 364 942 455 385
extraordinary downpayments
Obligations under finance leases 119 780 124 859
Other long term liabilities 2 281
- 2 508
-
Deferred income
Total non-current liabilities 487 004 582 752
Current Liabilities
• Ordinary downpayments
Long-term debt - current portion 51 874 62 962
• Bought back CB in September
Obligations under finance leases – current portion 6 725 6 426
• MVC payments in October
Other current liabilities 30 521 30 046
Total current liabilities 89 120 99 434
Total liabilities and shareholders’ equity 1 104 718 1 212 071
Equity ratio ~ 48 %
8. Vessels: Deliveries, charters and newbuildings
July 2012: Sanko went into formal rehabilitation proceedings in Japan
Reduced payments on Golden Feng (original charter rate $46,000 net/day)
until July, no hire after July
Vessel taken back in August 2012
Vessel currently trading spot
July 2012: Reduced contract price for three vessels at Jinhaiwan
Golden Nantong, Golden Excellence and Golden Explorer extended to
fourth quarter
Aggregate new price for the vessels is $86.65 million
November 2012: Cancelled two newbuilding contracts at Jinhaiwan
Golden Excellence and Golden Explorer passed cancelling date again
November 2012: Golden Bull started on the five year charter at $16,788
/day
9. Corporate transactions and covenants
Asset values continued to drop during the quarter
$15.5 million in extraordinary downpayments in July 2012
$14.3 million in extraordinart downpayments in October 2012
Share repurchase
Purchased 6 238 204 shares to date
Convertible bond repurchase
Purchased $5.9 million of CB back in September at 99 cents
Increase the interest rate hedge
Bought $100 million of interest rate swaps for 7 years
10. Overview of newbuilding program
Jinhaiwan Pipavav
Capesize 1 0
Kamsarmax 2 0
Iceclass panamax 4 1
Installments paid 168.6 21.4
(MUSD)
Loan drawn 43.2 14.4
(MUSD)
As per 30.09.2012. Cancelled contracts also include installments and loans.
11. Open positions on sailing vessels
Capesize exposure - Sailing vessels Core Fleet
2012 2013 2014
Total vessel days 277 2 108 2 108
Open vessel days 10 697 1 633
Open position (%) 3% 33 % 77 %
Average net rate on fixed days 24 493 30 872 23 510
No of vessels 6 6 6
Panamax exposure - Sailing vessels Core Fleet
2012 2013 2014
Total vessel days 794 6 038 5 925
Open vessel days 59 1 397 3 352
Open position (%) 7% 23 % 57 %
Average net rate on fixed days 16 115 17 453 19 523
No of vessels 17 17 17
12. Cash cost breakeven
Cash cost breakeven for sailing vessels
(2013 estimates)
Capesize 16,200 $/day
Panamax/Kamsarmax 12,100 $/day
Assumptions
Cash B/E includes OPEX, quarterly loan repayment, interest and admin costs
B/E rates is calculated for owned sailing vessels
15. Still robust underlying growth in seaborne dry trade…
Mill tons / month
100
90
80
70
60 Yr/Yr change %
9 mos 2012/2011
50
+ 6.9 %
40
30
20
10
0
08.1 09.1 10.1 . 11.1 . 12.1
Iron ore Coal Grain/soybean Steel products
Source: Platou Economic Research
16. Dry bulk market strengthening
Freight rates moving up in Q3 2012
Series Date Previous Current Change Percent %
Cape TCAvg 2012-11-20 16734 16809 75 0.45 %
Panamax TCAvg 2012-11-20 7210 7453 243 3.26 %
SM TCAvg 2012-11-20 7187 7269 82 1.13 %
Handy TCAvg 2012-11-20 6018 6056 38 0.63 %
Source: Pareto Shipping
17. Freight market development
Baltic Dry Index, seasonal pattern
Still some seasonality
visible.
Coal and Grain seasons.
Monsoon season.
Source: Fearnleys
18. Premium quality ore is becoming an increasingly attractive product
World production and Fe grades
• The Fe grade of the average global
iron ore product is declining over
Mt
51% 3,500 time
50% 3,000 • This trend is in particular apparent
49% in China, where the average grade is
2,500
48% well below the global average
2,000
47%
1,500 • China’s import need is not only
46% about need for volumes, but also
1,000
45% about need for higher grade material
44% 500 to offset its domestic low grade iron
43% 0 ore
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
World production (rhs) World Fe Grade (lhs) • With a falling average grade over
time, the relative value of a high
grade product is expected to
increase over time
Source: Pareto Shipping
19. New Iron Ore Project developments until 2015
New discovered
deposits Qinghai
Baffinland 18 mt 50 – 75 mt
ArcelorMittal 8mt
Total 26 mt
Rio Tinto (jv Orissa 40 mt
W.Africa 60 mt
Vale 103 mt
Angelo Minas 27 mt
Total 130 mt
Kumba
Rio Tinto 53 mt
Xstrata
BHP Billiton 46 mt
IMC
Fortescue 59 mt
Others 159 mt
50 – 70 mt
Total 317 mt
In total 625 – 650 mill tons
Source: Platou Economic Research
20. Steam coal imports growing robustly
Steam coal steaming ahead Fallout from Fukushima
China’s imports will be about 194 mill. tons ‘ in ’12
Downward revision from 205 mill. tons in last update
Sourcing from Indonesia and Australia
Source: Pareto Shipping
21. Bulk carriers: existing fleet and order book by year of delivery
ON Deliveried Rest ON ORDER IN %
DWT EXIST.FLEET* ORDER 2012 2012 2013 2014 2015+ OF EXIST.FLEET
BULK CARRIERS
Handy
10-14,999 2.9 0.1 0.0 0.0 0.1 0.0 0.0 3.2
15-19,999 5.2 0.1 0.3 0.0 0.0 0.0 0.0 1.4
20-29,999 31.8 1.3 1.1 0.4 0.6 0.2 0.0 4.1
30-39,999 46.1 10.0 7.1 1.0 5.7 2.1 1.3 21.8
Total Handy 86.0 11.5 8.5 1.5 6.4 2.3 1.3 13.4
Handymax / Supramax
40-52,999 54.5 4.3 1.6 1.0 2.7 0.5 0.1 7.8
53-64,999 (blt > 1999) 82.3 16.2 15.7 4.5 8.6 2.8 0.3 19.7
Total Handymax/Supramax 136.8 20.5 17.3 5.5 11.2 3.3 0.4 15.0
Total Handy/Handymax 222.8 32.0 25.8 7.0 17.6 5.6 1.7 14.3
Panamax / Kamsarmax
65-84,999** 137.9 33.5 17.4 13.1 13.9 5.7 0.8 24.3
Post Panamax
85-119,999 43.2 7.4 9.3 2.2 3.7 1.1 0.4 17.1
Capesize
120,000 + 265.5 40.1 35.0 14.1 20.8 5.1 0.2 15.1
TOTAL 669.5 113.1 87.6 36.3 56.1 17.5 3.2 16.9
No of vessels 9 382 1 393 1042 398 704 229 62
* Scrapped vessels removed from the fleet when sold for scrap. ** Incl 60,000 - 64,999 built year 2000 and before
Source: Platou Economic Research
22. What lies ahead? Part I
Deliveries and Order book by main Builder nation
“Theoretical” orderbook
for about 130 million DWT
in 2012....
78% of the 2011
orderbook was delivered –
slippage to remain an
issue.
Chinese Greenfield yards
supposed to deliver 57
mdwt in 2012, up from 29
mdwt in 2011.
China overall is supposed
to increase its newbuilding
deliveries by 60%.....
Soft earnings and difficult
funding conditions also to
reduce actual deliveries.
Source: Fearnleys
23. What lies ahead? Part II
Historic deliveries and Orderbook for Chinese Green field yards
118 “greenfield” yards in
China
Monthly average output
about 3.6 mdwt.
Combined order book
about 68 mdwt
71 yards have delivered
less than 2 ships latest 12
months (49: zero)
Only 77 of them have
ships on order
32 yards have five or less
vessels on order
88% of the order book is
scheduled for delivery by
end 2013
2012 2013 2014 2015
# of vessels 357 395 92 12
DWT 26,4 32,7 7,6 1,3
Source: Fearnleys
24. Dry bulk market recovering from demand-supply imbalance
Tonnage overhang reduced, demand catching up with supply
We estimate dwt supply growth to
y/y growth
increase by 13% in 2012, versus a
18%
14.9% 15.4% ton-mile demand growth of 10%
16%
13.3%
14% Market balance turns positive in
12%
13.4% 2013 with net supply growth at 6%,
10%
7.7%
11.3% below tonnage demand growth of
8% 7.0% 10.0% 6.8% 7%
6% 5.2%
6.3%
4.1%
4% 5.3%
2% 3.8% 2.3% 2.6%
0%
2008 2009 2010 2011 2012e 2013e 2014e 2015e
Dwt demand growth Dwt supply growth
Source: Pareto Shipping
26. … and then slowly improve up to 91% in ‘15
Dry bulk fleet utilization
Utilization % • We forecast utilization to improve in
98
95.7 2013 and onwards, yet stay below
96 the historical average of 92% and 10-
94 92.7 year avg of 93%
91.6
92 90.5
89.2 • Rates should stay below pre-
90 88.5
financial crisis levels, but slowly
88 86.3 86.8
increase from the lows in 2012
86
84
82
80
2008 2009 2010 2011 2012e 2013e 2014e 2015e
Utilization 2001-2011 avg
Source: Pareto Shipping
