Eagle Bulk Shipping Inc. JPMorgan Aviation & Transportation Conference 19 March 2008

Transcription

1 Eagle Bulk Shipping Inc. JPMorgan Aviation & Transportation Conference 19 March 2008

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 forwardlooking 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 and charter contracts 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. 1

3 Agenda Investment Thesis The Fleet Industry View Financial Review Conclusion 2

4 Investment Thesis

5 Eagle Bulk A Clear, Focused Investment Story We are one of the largest Supramax owners in the world Best long term prospects Strong contract coverage with upside $1.1 bn in contracts 19 profit-sharing charters 18 open vessels Proven growth strategy 43 vessels $1.7 billion worth of acquisitions Stable and increasing cash flows for sustainable dividends Target $0.50 per quarter Intent to grow $70m acquisition in 3Q-05 $105m acquisition in 2Q-06 $67m acquisition in 4Q-06 $205m acquisition in 1Q-07 $1.1 bn acquisition in 3Q-07 $169m acquisition in 1Q-08 Delivering Sustainable Growth 4

6 Eagle Bulk A Growth Story Dec 2005 Dec 2006 Mar 2008 Growth Fleet Size 13 Vessels 16 Vessels 53 Vessels 4.1x - Supramax 9 Vessels 12 Vessels 50 Vessels 5.6x - DWT 0.64 m tons 0.80 m tons 2.92 m tons 4.6x Finance : - Market Capitalization $528 million $623 million $1,245 million 2.4x - Enterprise Value $668 million $862 million $1,842 million 2.8x - Dividends Paid to Date $5.10 per share 5

7 Capital Investment Program of $1.5 Billion Last 12 Months: Acquired 3 modern Supramax vessels for $138.7 million Expanded Japanese newbuilding program from 2 to 5 vessels at an average contract price of $33.5 million per vessel 1st vessel delivery in 4Q-2008; vessel is charter free Completed fleet acquisition of 26 newbuild Supramax vessels for $1.1 billion 1st vessel delivery in 3Q-2008 Recently exercised options to build additional 4 Supramax sister vessels for $169 million Fleet Triples to 53 Vessels 6

8 Eagle On a Solid Growth Trajectory $ m EBITDA Owned Days 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - (2,000) (4,000) (6,000) Fleet CAGR of > 20% 3x increase in Owned Days 7

9 The Fleet

10 Modern, High Quality Geared Fleet of Supramax Vessels On-the-Water Fleet No. of Vessels Deadweight Tons (dwt) Vessel Type Delivery 18 Vessels 0.92 million dwt 15 Supramaxes 3 Handymaxes Supramax Newbuilding - 3 Groups of Sister Vessels 5 Vessels 0.26 million dwt 53,100 dwt Series Vessels 0.28 million dwt 56,000 dwt Series Vessels 1.45 million dwt 58,000 dwt Series New Vessels with 2 million dwt of Capacity Coming Online 9

11 Open Days Provide Revenue Upside.... Open days provide significant revenue upside 18 Open vessels to charter between now and 2009 * 19 Profit-sharing charters available to take advantage of market 1,600 Open Days 1,400 1,200 1, * Basis earliest deliveries Q Q Q Q4 10

12 .... Contracted Revenue Provide Stability $ m Contracted Revenues Owned Days , , , , , No. of ships - Contracted Gross Revenues in Excess of $1.1 billion Supports Dividend 11

13 Industry View

14 China Settles Into Sustained Growth Chinese capital investments continue to expand up almost 30% in 2007 Construction growth up almost 40% in 2007 Coal shortages in China: after net imports of 20 million tons in 2007, Chinese coal imports expected to double in 2008 to 40 million tons Chinese coastal trade hits 400 million tons in 2007 Chinese Coastal Bulk Freight Index * up 60% in 2007 Surging coastal trade draws more smaller vessels - COSCO announces reallocation of vessels from international trade to meet domestic needs Chinese overseas investments (e.g., stake in Rio Tinto) to secure stable supplies assures ton miles Demand Sustains Increase in Ton Miles Source: ICAP Hyde, Reuters, Financial Times, Clarksons 13

15 Increasing Indian Trade Requires Geared Vessels India expected to grow at a sustained 8-9% Coal imports into India surge, as nation sharply expands power supply 29 GW or 45% on power units at low or critical inventory levels 64 GW of coal fired power units to be added from GW of power requires million tons of coal Indian companies invest overseas to secure critical coal supplies assures ton miles Weak Indian port infrastructure results in more geared vessels bringing in major bulk cargoes 3/4ths of Eagle s 2007 Voyages Required Vessel Gear Source: ICAP Hyde, Reuters, Financial Times, Clarksons 14

16 Charterers Attracted by Versatility of Supramax Vessels Capesize Panamax Handymax/Supramax IRON ORE COAL GRAINS OTHER ORES CEMENT COKE STEELS SCRAP IRON AGGREGATES MISC. In m tons 1,121, , , , , , ,589-58,750 1,049,858 Cardinal Condor Falcon Griffon Harrier Hawk I Heron Kite Merlin Osprey I Peregrine Shikra Sparrow Kestrel I Tern Jaeger Eagle vessels carried 6.7 million tons of cargo in MISC. cargoes include Phosrock, Sugar, HBI, and Concentrates 45% of Eagle s Cargoes were Capesize and Panamax cargoes 15

17 Attractive Supply Fundamentals for Supramax Market Drybulk Order Book: 51% Capesize ; 22% Panamax 21% Supramax ; 6% Handy Fleet Age and Orderbook (dwt) Orderbook and Fleet Age 90% % of Fleet > 20 years 80% Orderbook as % of Fleet 70% 60% 50% 89% 40% 30% 53% 20% 10% 44% 32% 23% 19% 0% Handymax Panamax Capesize Fleet DWT (M illion Tons) ,354 Vsls 57.5 Handy (10,000/34,999 dwt) World Dry Bulk Fleet 1,458 Vsls 62.3 Handymax (35,000/49,999 dwt) Eagle s focus 552 Vsls Aging Handymax fleet 33% of capacity > 20 years old Greenfield yards- likely slippage? 8 million dwt of vessels due in 2007 miss delivery schedules trend increasing 29.4 Supramax (50,000/59,999 dwt) 1,565 Vsls 113 Panamax (60,000/99,999 dwt) 768 Vsls Capesize (>100,000 dwt) Source: Clarksons as of February

18 Financial Review

19 4Q 2007 and Year 2007 Results 4Q Net Income of $16.3 million or $0.35 per share Gross Time Charter Revenues of $38 million, up 23% Q-on-Q EBITDA 1 of $27.9 million, up 26% Q-on-Q Fleet Utilization of 99.3% 2007 Net Income of $52.2 million, up 54% Y-on-Y Gross Time Charter Revenues of $135.4 million, up 19% Y-onY Fleet Utilization of 99.4% EBITDA 1 of $99.4 million, up 20% Y-on-Y Paid $82.1 million in Cash Dividends or $1.98 per share 1 EBITDA, as defined by our credit agreement, is Net Income plus Interest Expense, Depreciation and Amortization, and Exceptional Items. Declares 4Q Dividend of $0.50 per share 18

20 Low Breakeven Cost Strategy 1,400 1, Dry-Dock Vessel Expenses Technical Mgt Fees G&A Cash Interest (net) 296 4,414 Vessel expenses include crew wages and related costs, the cost of insurance including credit risk insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores and related inventory, tonnage taxes, pre-operating costs associated with the delivery of acquired vessels including providing the newly acquired vessels with initial provisions and stores, and other miscellaneous expenses. The Company is anticipating higher crewing costs and higher costs for oil based supplies including lubes and paints. The Company is also making allowance for constraints in yard drydocking capacity which has driven up drydocking costs. 19

21 Strong Balance Sheet (in $ 000's) Dec. 31, 2007 Cash $152,904 Other Current Assets 4,550 Vessels, net 605,245 Advances for Vessel Construction 1 344,855 Restricted Cash 9,125 Other Assets 19,330 TOTAL ASSETS 1,136,009 Current Liabilities 10,263 Long-term Debt 597,243 Other Liabilities 13,532 Stockholders' Equity 514,971 Book Capitalization 1,112,214 Net Debt 2 / Capitalization 41.2% Liquidity 1,141,422 1 Construction finance costs (interest, deferred finance charges, supervision, etc.) are capitalized eliminating any impact on current cash flows and income statement. 2 Net Debt is pro forma after taking into effect 4Q-07 Dividend payment of $23.4 million. Quarterly Dividend Cash Flow Maintained 20

22 Conclusion

23 Conclusion - Accretive Growth Strategy CLEAR BENEFITS TO SHAREHOLDERS Secure dividend over long term. Pay down debt Declared Dividends of $5.10 per share to date. Intent to grow dividend over time AFFIRMS EAGLE BULK AS CONSOLIDATOR IN DRYBULK INDUSTRY Grows fleet to 53 vessels Increases cargo carrying capacity to 2.9 million dwt Lowers average age to 2 years Improves operating efficiencies with 45 sister vessels HEALTHY DRYBULK MARKET FUNDAMENTALS CONTINUE Increase contracted revenues with 18 open vessels available to charter through 2009 and 19 profit sharing charters Eagle Bulk Delivering Sustainable Growth 22

24 Eagle Bulk Shipping Inc.