Seeking Alpha Maritime Investor Forum Presentation. 19 June 2017

Transcription

1 Seeking Alpha Maritime Investor Forum Presentation 19 June 2017

2 Disclaimer This presentation contains certain statements that may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as believe, estimate, project, intend, expect, plan, anticipate, and similar expressions in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements reflect management s current expectations and observations with respect to future events and financial performance. Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. 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, 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. The principal factors that affect our financial position, results of operations and cash flows include, charter market rates, which have declined significantly from historic highs, periods of charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S. dollars, depreciation expenses, which are a function of the cost of our vessels, significant vessel improvement costs and our vessels estimated useful lives, and financing costs related to our indebtedness. Our actual results may differ materially from those anticipated in these forward- looking statements as a result of certain factors which could include the following: (i) changes in demand in the dry bulk market, including, without limitation, changes in production of, or demand for, commodities and bulk cargoes, generally or in particular regions; (ii) greater than anticipated levels of dry bulk vessel new building orders or lower than anticipated rates of dry bulk vessel scrapping; (iii) changes in rules and regulations applicable to the dry bulk industry, including, without limitation, legislation adopted by international bodies or organizations such as the International Maritime Organization and the European Union or by individual countries; (iv) actions taken by regulatory authorities; (v) changes in trading patterns significantly impacting overall dry bulk tonnage requirements; (vi) changes in the typical seasonal variations in dry bulk charter rates; (vii) changes in the cost of other modes of bulk commodity transportation; (viii) changes in general domestic and international political conditions; (ix) changes in the condition of the Company s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking costs); (x) the outcome of legal proceedings in which we are involved; and (xi) and other factors listed from time to time in our filings with the SEC. We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable security laws. 2

3 Elements of a Successful Shipowner Vessel Segment Business Model Operating Scale Balance Sheet Corporate Governance Management Team Eagle is the best positioned drybulk company 3

4 Agenda 1 Drybulk 2 Company 3 Financial 4 Industry 5 Summary 4

5 Drybulk 5

6 Over 90% of Global Trade is Via the Seas Seaborne Trade Tanker (29%) Containership (17%) Major Bulk (62%) Iron Ore Coal Grain Drybulk (54%) Steel Scrap Drybulk trade equates to ~5 billion tons per year, or 50% of total (annualized) seaborne trade Minor Bulk (38%) Cement Salt Bauxite Source(s): ICS, UNCTAD Other 6

7 Supramax/Ultramax: the Most Versatile Asset Class VESSEL Asset Class Handysize / Handymax Supramax / Ultramax Panamax / Kamsarmax Capesize Size (DWT) 10-50k 50-65k k >100k Self-loading/discharging Yes Yes No No MAJOR BULK MINOR BULK Iron Ore Coal Grain Bauxite Steel Scrap Cement Salt Forest Products Potash / Fertilizer Coke Nickel Ore Sugar Other Eagle s Focus 7

8 Company 8

9 Actively Renewing and Expanding the Fleet 25 Fleet Age Distribution <5yrs 5-7.5yrs yrs yrs yrs >15yrs Static Bought Sold Acquired 11 modern Ultramaxes / sold 6 of the older vessels 9

10 Largest US-listed Owner of Supramaxes/Ultramaxes 80 Peer Group Fleets Eagle Bulk Diana Genco Golden Ocean Navios Maritime Holding Navios Maritime Partners Safe Bulkers Scorpio Star Bulk Handysize Supramax / Ultramax Panamax Capesize Source(s): VesselsValue.com 10

11 Full In-house Management Drives Better Results Commercial Management Better flow of market and business information Improved interaction yields performance efficiencies Strategic Management Able to provide better customer service- i.e. one-stop shop Operational Management Technical Management Avoid Principal-Agent Problem Acting as the principal, we are best suited to manage and take care of our assets No leakage of fees Benefit from increased Business Intelligence Round-the-clock coverage with offices in: Stamford / Singapore / Hamburg 11

12 ------spread potential--->>> Active Asset Management Optimizes Revenue Voyage Chartering Timecharter-in Hedging (FFAs) Asymmetric Optionality Vessel + Cargo Arbitrage <<<---Active Risk Management (ARM)- >> Timecharter-out Owner-Operator Spectrum--->>> 12

13 Financial 13

14 Supramax Spot Rates Supramax Index (BSI) vs. Baltic Dry Index (BDI) $23,000 $21,000 $19,000 $17,000 $15,000 $13,000 $11,000 $9,000 $7,000 $5,000 $3,000 $1,000 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, BDI Surpramax Atlantic Supramax Pacific Surpramax Index Source(s): Clarksons 14

15 Improving Revenue Performance 90% Atlantic vs. Pacific Premium $10,000 Eagle Timecharter Equivalent (TCE) Rate* 80% 70% 60% $9,000 $8,000 $7,772 $9,027 50% 40% $7,000 $6,004 $6,279 30% $6,000 20% 10% $5,000 $4,422 0% -10% -20% $4,000 $3,000 $2,938 Actual Historical Average $2,000 1q16 2q16 3q16 4q16 1q17 2q17 Source(s): Clarksons 2q17 TCE is based on 69% of days fixed for the quarter as of 5/8/17 15

16 Realizing Material Savings in OPEX $5,300 Daily Vessel OPEX Improved OPEX by $ 7 million Y-o-Y $5,200 $5,100 Continue to focus on creating value through efficiencies, while investing in the overall improvement of vessel conditions $5,000 $4,900 $4,800 $5,239 $4,700 $4,600 FY17 Daily Vessel OPEX is budgeted at a further reduction: $4,633 $4,500 $4,804 $4,633 $4,400 $4,300 FY15a FY16a FY17b 16

17 Low Cash Breakeven 1q17 Cash Breakeven per vessel per day $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Vessel OPEX G&A Interest 17

18 Balance Sheet + Liquidity Position $ Thousands $ Thousands March 31, 2017 Total Liquidity as of Mar 31, ,768 Cash 145,768 Debt (Net of debt issuance costs) 256,828 Cash 145,768 Stockholder's Equity 487,615 Capitalization 598,675 Undrawn availability 25,000 Net Debt / Capitalization 43% Debt Maturity Liquidity Position 250, , , , , , , , ,000 80,000 60,000 50,000 40,000 20, Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, st Lien Facility 2nd Lien Facility Cash Revolver Availaility 18

19 Industry 19

20 Orderbook Continues to Contract Orderbook % % 70% % % % % 20% 10% % Orderbook (LHS) Orderbook as a % of OTW Fleet (RHS) Currently at 8% of the On-the-water Fleet Source(s): Clarksons 20

21 Over Five Million Deadweight Tons Scrapped YTD Historical Scrapping (DWT) % % % % % % 5 1.0% 0 0.0% e Scrapping (LHS) Scrapping as a % of Fleet (RHS) Demolition for FY17 estimated at 2% of the fleet Source(s): Clarksons 21

22 Drybulk Remains Out of Sync with Global GDP Drybulk Trade Growth vs. Global GDP Growth 14% % % Projected drybulk trade growth basis reversion to DT/GDP avg % 2% % % (0.25) Drybulk Trade / Global GDP Ratio (RHS) Drybulk Trade Y/Y % (LHS) Global GDP Y/Y % (LHS) DT/GDP Ratio Historical Average (RHS) Reversion to historical mean implies drybulk trade growth at ~3.5% Source(s): Clarksons, IMF Drybulk Trade / Global GDP Ratio for 2009 extracted from Historical Average calculation 22

23 Summary 23

24 Eagle: Best Positioned Drybulk Company Vessel Segment: SUPRAMAX / ULTRAMAX Business Model: OWNER-OPERATOR / INHOUSE MGMT. Operating Scale: 46 SHIPS+3 STILL TO BE DELIVERED Balance Sheet: WELL-CAPITALIZED Corporate Governance: MAJORITY INDEPENDENT BOARD Management Team: PROVEN TRACK RECORD Superior performance and results 24

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