Eagle Bulk Shipping Inc. 2Q 2008 Results Presentation. 7 August 2008

Transcription

1 Eagle Bulk Shipping Inc. 2Q 2008 Results Presentation 7 August 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 Second Quarter 2008 Highlights The Fleet Industry View Financial Overview Conclusion 2

4 2Q 2008 Highlights

5 2Q 2008 Highlights Net Income of $14.9 million or $0.32 per share, up 25% from 2Q 2007 Net Time Charter Revenues of $37.2 million, up 31% from 2Q 2007 EBITDA 1 of $27.8 million, up 24% Q-on-Q Declared Cash Dividend of $0.50 per share Fleet Utilization of 99.9% 1 EBITDA, as defined by our credit agreement, is Net Income plus Interest Expense, Depreciation and Amortization, and Exceptional Items 4

6 Recent Events Cardinal chartered for one year at a rate of $62,000 per day, a 121% increase Launched three newbuilding vessels and took delivery of Wren 70 days ahead of contract date Wren delivered June 08, commenced 10 year profit-sharing time charter Woodstar launched July 08 Crowned Eagle launched July 08 Recently announced the acquisition of two Supramax vessels for a total price of approximately $146 million in private, off-market transactions: Goldeneye, a 2002 built 52,421 dwt delivered in June 2008 Vessel commenced a one-year charter at $61,000 per day Redwing, a 2007 built 53,000 dwt is expected to deliver charter-free in September 2008 Highly Accretive to Earnings, EBITDA and Free Cash Flow per Share 5

7 The Fleet

8 The Eagle Story Delivering Sustainable Growth Modern Fleet Focus on Supramax Class One of the largest Supramax owners On-the-water fleet s average age of 6 years Newbuilding Program 35 new vessels Delivery schedule 3 vessels vessels vessels vessels vessels Charter Strategy Launch of Our Second Newbuilding Vessel Woodstar in China - July 2008 Contracted revenues exceed $1 billion Open vessels provide upside potential 18 open vessels in profit-sharing charters Dividends to date: $ 6.10 Intent to grow Launch of Our Third Newbuilding Vessel Crowned Eagle in Japan - July

9 Modern, High Quality Geared Fleet of Supramax Vessels On-the-Water Fleet * No. of Vessels Deadweight Tons (dwt) Vessel Type Delivery 21 Vessels 1.08 million dwt 18 Supramaxes 3 Handymaxes Supramax Newbuilding - 3 Groups of Sister Vessels 4 Vessels 0.21 million dwt 53,100 dwt Series Vessels 0.28 million dwt 56,000 dwt Series Vessels 1.45 million dwt 58,000 dwt Series * Includes Wren and Goldeneye both delivered in June 2008, and Redwing to be delivered in September 2008 One Delivered, 34 More Vessels to Come 8

10 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 2,000 - (2,000) (4,000) (6,000) Fleet CAGR of > 20% 3x increase in Owned Days 9

11 Contracted Revenues Provide Stability.... $ m Contracted Revenues Owned Days 25, , ,000 10, , No. of ships Contracted Gross Revenues in Excess of $1 Billion Support Dividends 10

12 .... Open Days Provide Revenue Upside Kittiwake, Goldeneye, Cardinal time chartered for one year at $56,250, $61,000, and $62,000 per day, respectively * $ m Days At Average Daily Rate for Open days $40,000 $50,000 $60,000 Open Days 9,000 8, ,000 6,000 5,000 4,000 3,000 2,000 1, * Kittiwake and Cardinal charters commence in August 2008, Goldeneye charter commenced in June Additional Vessels to Deliver in

13 Open Days and Vessel Deliveries Increase Revenues in USD m Low case growth rate: 67% % High case growth rate : 106% % Does not include 6,000 additional vessel days to be added in Total revenue $700 $600 $500 $400 $300 Open Days Revenue at $60,000 per day Open Days Revenue at $50,000 per day Open Days Revenue at $40,000 per day Fixed Revenue $200 $100 $ Total Revenue = Fixed Revenue + Open Revenue (as per legend above) Long Term Sustainable Growth Benefits Shareholders 12

14 Industry View

15 Demand Continues to Drive Drybulk Trade China plans to build 104 new cities with a population of more than 1 million by 2025 Seaborne iron ore trade is expected to expand significantly in 2H08, as big 4 miners (Vale, BHP, Rio Tinto, and Fortescue) continue to increase production capacity to meet Chinese demand New mines are to add 400 million tons per annum additional capacity mtpa Rio, Vale, BHP, Fortescue, MMX mtpa Rio, Fortescue, BHP, MMX mtpa Fortescue, MMX Coal demand remains strong, helped by increased power and steel generation capacity and low thermal coal stockpiles Coal reserve in China s big power plants was million tonnes, merely enough to support 11 days of normal operations China is estimated to spend US$72 billion on post-earthquake reconstruction Demand for cement in the first three years of reconstruction is estimated at 78 million tons Source: company reports, China State Electricity Regulatory Commission, Deutsche Bank 14

16 Handymax Class Vessels India s Dry Bulk Trade Workhorse Dry Bulk Vessel Port Calls Cape Handymax Panamax Handysize Port Calls 4, % 5% 3,500 3,000 3,003 3,015 3,282 2,500 23% 2,000 58% 1,500 1,600 1,553 1,496 1, , Source: Indian Ports Association, Portworld, Braemar, May Capes Panamax Handymax Handysize Eagle Vessels First to Call at new Indian Port of Krishnapatnam (near Chennai) Supramax Flexibility Ideal for Trade to China, India & Gulf States 15

17 Charterers Attracted by Versatility of Supramax Vessels Capesize Panamax IRON ORE COAL GRAINS Handymax/Supramax OTHER ORES CEMENT COKE STEELS SCRAP IRON AGGREGATES MISC. In m tons 975, , , , , ,145 99,596 92, , ,307 Cardinal Condor Falcon Goldeneye Griffon Harrier Hawk I Heron Jaeger Kestrel I Kite Kittiwake Merlin Osprey I Peregrine Shrike Skua Sparrow Tern Eagle vessels carried 3.6 million tons of cargo in 1H 2008 MISC. cargoes include potash and alumina 57% of Eagle s 1H Cargoes were Capesize and Panamax cargoes 16

18 Attractive Supply Fundamentals for Supramax Market Drybulk Order Book on dwt basis: World Dry Bulk Fleet 53% Capesize ; 20% Panamax Vsls Fleet Age and Orderbook (dwt) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 18% Supramax ; 9% Handy Orderbook and Fleet Age % of Fleet > 20 years Orderbook as % of Fleet 57% 44% 32% 23% 19% 100% Fleet DWT (Million Tons) ,397 Vsls Handy (10,000/34,999 dwt) 1,468 Vsls Handymax (35,000/49,999 dwt) Eagle s focus 586 Vsls Aging Handymax fleet 32% of capacity > 20 years old 1H-08 shipyard delays over 25% 35.8 Supramax (50,000/59,999 dwt) 1,600Vsls Panamax (60,000/99,999 dwt) Capesize (>100,000 dwt) 0% Handymax Panamax Capesize Source: Clarksons as of July

19 Financial Overview

20 2 nd Quarter Earnings ($000's) Jun. 30, 2008 Jun. 30, 2007 REVENUES, NET OF COMMISSIONS $37,223 $28,338 EXPENSES Vessel Expenses 7,596 6,857 Depreciation and Amortization 7,391 6,047 General & Administrative Expenses 4,763 1,697 Total Operating Expenses 19,750 14,601 OPERATING INCOME 17,473 13,737 Interest Expense 3,449 3,160 Interest Income (882) (1,348) Net Interest Expenses 2,567 1,812 NET INCOME $14,906 $11,925 Weighted Average Shares Outstanding Basic 46,763,160 41,713,820 Diluted 47,123,585 41,811,854 Per Share Amounts Basic Net Income $0.32 $0.29 Diluted Net Income $0.32 $

21 Low Breakeven Cost Strategy $9,400/day breakeven cost for Dry-Dock 2,200 Vessel Expenses Technical Mgt Fees Cash G&A Cash Interest (net) 1,650 4, 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. 20

22 Strong Balance Sheet BALANCE SHEET DATA June 30, 2008 (in $ 000's) Cash $62,997 Other Current Assets 6,418 Vessels, net 725,388 Advances for Vessel Construction 1 380,672 Restricted Cash 10,276 Other Assets 22,640 TOTAL ASSETS 1,208,391 Current Liabilities 14,771 Long-term Debt 665,695 Other Liabilities 21,017 Stockholders' Equity 506,908 Book Capitalization 1,172,603 Net Debt 2 / Capitalization 53% 1 Newbuild Costs to be Capitalized eliminating any impact on current cash flows 2 Net Debt is pro forma after taking into effect 2Q Dividend payment of $23.4million Quarterly Dividend Cash Flow Maintained 21

23 Conclusion

24 Conclusion - Accretive Growth Strategy CLEAR BENEFITS TO SHAREHOLDERS Fleet Growth begins in Q Ramp up in Open Days Re-charters of current fleet at strong current rates Significant increase in EBITDA Eagle Bulk Delivering Sustainable Growth 23

25 Eagle Bulk Shipping Inc.