Todays Opportunities: DCF Values Vs Market Values Vs Breakevens

Transcription

1 Todays Opportunities: DCF Values Vs Market Values Vs Breakevens MarineMoney NYC June 2015 Adrian Economakis Strategy Director

2 Agenda 1. Using DCF to ACCURATELY value vessels 2. Analysis of Tank, Bulk, Container, LNG & LPG Market Values Vs Historical Averages Current and Long term rates Vs Breakevens (to WACC) Ton Mile Demand Trends Vs Net fleet growth 3.,, Indications by Vessel Type

3 Introduction to VesselsValue The Shipping Market Intelligence and Valuation Service Established London 2010, Isle of Wight research office opened staff and growing >600 users, >300 clients across >30 countries Clients include; Banks, Owners, Funds, Classification Societies, Brokers, Lawyers and Advisors Services include VV$, VVQ

4 Accurate DCF Valuation

5 DCF Model - Instant DCF Values for >35k Vessels - Vessel specific - All inputs provided by VV - Fully customisable by the User

6 DCF Model

7 DCF Vs Market Values (Overview) Bulker Tanker LNG + Container - + LPG - -

8 Vessel Specific Assumptions Adjusted (Vessel Specific) Not Adjusted ( Type ) Effect on DCF Value = $5m Valuation difference

9 Future Charter Rate Estimation Choice of: Rates/Index TCE TC FFA Personal Method Mean Median Most recent Interval 10+ years of historical data Transition 1,2,3,4,5 year Long term only

10 Breakeven Breakeven to what? Breakeven to Expenditure Or Breakeven to Cost of Debt + Expenditure Or Breakeven to WACC + Expenditure Based on VV expenditure, fee and WACC assumptions (7.76% in this case) Charter Rate for Vessel Price IRR for Vessel Price

11 Opportunities

12 Now? Values Rates Future? Data Analysis Current Values Vs. Historical Mean / Median Rates Vs Breakeven s (to WACC) Rating Demand Trends Fleet Growth Demand Vs Supply Growth

13 Dry Values Vs Mean, Median & Min Current Values for 5yo Vs Mean, Median and Minimum ( ) 10% 0% Capesize Panamax Supramax Handy 4% 0% 1% 2% -10% -20% -30% -40% -50% -60% -41% -40% -54% -53% -54% -54% Super Cycle removed (May 07- Feb 09) 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% -40% -45% 0% -33% -38% -39% -37% 4% -42% Limited downside risk? Potential Upside? Capesize Panamax Supramax Handy -46% 1% 2% -39% -42% -42% -40% Vs Mean Vs Median Vs Min Vs Mean Vs Median Vs Min

14 Wet Values Vs Mean, Median & Min Current Values for 5yo Vs Mean, Median and Minimum ( ) 75% 55% 35% 15% -5% -25% VLCC Suezmax Aframax LR1 MR 81% Equilibrium? Downside risk? Equilibrium? Room to run? 67% 57% 49% 10% 1% 2% -1.6% 0% -7% -7% -7% -6% -19% 20% Vs Mean Vs Median Vs Min Super Cycle removed (May 07- Feb 09) 90% VLCC Suezmax Aframax LR1 MR 81% 70% 50% 57% 49% 67% Vs Mean Vs Median 30% 10% 9% 5% 7% 4% 19% 16% 9% 5% 20% Vs Min -10% -6% -1%

15 Container Values Current Values for 5yo Vs Mean, Median and Minimum ( ) Post Panamax Panamax Handy Fmax 100% 88% 80% 60% 40% 20% 0% -20% -40% -60% 33% 11.3% -7% Downside risk? -29% -40% 26% 28% -14% -18% -28% -26% Upside Potential? Super Cycle removed (May 07- Feb 09) Post Panamax Panamax Handy Fmax 100% 88% Vs Mean Vs Median Vs Min 80% 60% 40% 20% 10% 24.7% 33% 26% 28% Vs Mean Vs Median Vs Min 0% -20% -40% -28% -19% -8% -14% -15% -13%

16 LPG Values Current Values for 5yo Vs Mean, Median and Minimum ( ) 100% 80% VLGC LGC MGC SP FR LARGE FULL PRESS 96% 60% 40% 20% 54% 54% 24% 16% 19.1% 15% 18% 17% Upside Potential? 14% 26% Vs Mean Vs Median Vs Min 0% -20% Downside risk? -15% -6% -8% -7% Super Cycle removed (May 07- Feb 09) VLGC LGC MGC SP FR LARGE FULL PRESS 100% 80% 96% 60% 54% 54% Vs Mean 40% 20% 19% 22.1% 20% 28% 25% 26% 14% 26% Vs Median Vs Min 0% -20% -3% -7% -5% -5%

17 LNG Values Current Values for 5yo Vs Mean, Median and Minimum ( ) 0% Large Midsize Small 0% 0% 0% -2% -4% -6% Vs Mean Vs Median Vs Min -8% -10% -12% -9.9% -10% -10% -11% -11% -11% Super Cycle removed (May 07- Feb 09) 0% Large Midsize Small 0% 0% 0% -2% -4% -6% -8% -10% -12% -7.4% -7% -7% -11% -11% -11% Vs Mean Vs Median Vs Min

18 Values Values Vs Averages Rates Vs LONG term Averages Rates Vs SHORT term Averages Demand Vs Supply Avg. Volatility (5 year) Summary Capesize 1 Panamax BC 2 Supramax 2 Values Handy BC 3 VLCC 4 Suezmax 5 Aframax 6 LR1 7 MR 8

19 Values Values Vs Averages PPmax Cont 1 Rates Vs LONG term Averages Rates Vs SHORT term Averages Demand Vs Supply Avg. Volatility (5 year) Summary Pmax Cont 2 Handy Cont 2 Feedermax 3 Values VLGC 4 LGC 5 MGC 6 SP FR Lrg 7 Fully Press 8 Large LNG Midsize LNG Small LNG

20 Rates Vs B/E to WACC - Bulkers 5y/o Cape = $28m OPEX = $8k B/E (at 7.5% WACC) = $21K Current Rate = $42k Long Term (10yr Avg) = $38k 5y/o Pmax = $18m OPEX = $7k B/E = $16K Current Rate = $4.5k Long Term = $24.5k 5y/o Supra = $15m OPEX = $6k B/E = $14K Current Rate = $7.5k Long Term = $18k 5y/o Handy = $11m OPEX = $5.5k B/E = $11.5K Current Rate = $5k Long Term = $15k $10,000 $8,000 $8,500 $5,000 $4,000 $3,500 $0 Capesize Panamax Supramax Handy -$5,000 -$6,500 -$6,500 -$10,000 -$11,500 -$15,000 Current Headroom -$20,000 -$18,000 Long Term Headroom

21 Rates Vs B/E to WACC - Tankers 5y/o VLCC = $80m OPEX = $11k B/E (at 7.5% WACC) = $41K Current Rate = $42k Long Term (10yr Avg) = $38k 5y/o Suez = $60m OPEX = $10k B/E = $34K Current Rate = $44k Long Term = $35k 5y/o Afra = $46m OPEX = $9k B/E = $27K Current Rate = $42k Long Term = $22k 5y/o LR1 = $40m OPEX = $8k B/E = $23K Current Rate = $35k Long Term = $18k 5y/o MR = $28m OPEX = $7.5k B/E = $17K Current Rate = $22k Long Term = $16k $18,000 $15,000 $13,000 $12,000 $10,000 $8,000 $5,000 $3,000 $1,000 $1,000 -$2,000 VLCC Suezmax Aframax LR1 MR -$1,000 -$3,000 -$7,000 Current Headroom Long Term Headroom -$5,000 -$5,000

22 Rates Vs B/E to WACC - Containers 5y/o PPmax = $58m OPEX = $8k B/E (at 6.5% WACC) = $27K Current Rate = $29k Long Term (10yr Avg) = $33k 5y/o Pmax = $30m OPEX = $5k B/E = $16K Current Rate = $10k Long Term = $8k 5y/o Handy = $13m OPEX = $4.5k B/E = $10K Current Rate = $7.5k Long Term = $5k 5y/o Fmax = $9m OPEX = $4.5k B/E = $9K Current Rate = $4.5k Long Term = $4k $8,000 $6,000 $6,000 $4,000 $2,000 $2,000 $0 Post Panamax Panamax Handy Fmax -$2,000 -$4,000 -$2,600 -$6,000 -$6,000 -$4,500 -$5,000 -$5,000 -$8,000 -$10,000 -$8,000 Current Headroom Long Term Headroom

23 Rates Vs B/E to WACC - LPG 5y/o VLGC = $80m OPEX = $12k B/E (at 8.4% WACC) = $35K Current Rate = $77k Long Term (10yr Avg) = $40k 5y/o LGC = $69m OPEX = $10k B/E = $31K Current Rate = $63k Long Term (10yr Avg) = $29k 5y/o MGC = $53m OPEX = $7k B/E = $24K Current Rate = $27k Long Term (10yr Avg) = $21k 5y/o Full Press = $19m OPEX = $6k B/E = $14K Current Rate = $16k Long Term (10yr Avg) = $17k $45,000 $42,000 $40,000 $35,000 $32,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $5,000 $3,000 $2,000 $3,000 $0 -$5,000 -$10,000 VLGC LGC MGC Full Press -$2,000 -$3,000 Current Headroom Long Term Headroom

24 Rates Vs B/E to WACC - LNG 5y/o Large = $151m OPEX = $11k B/E (at 7.5% WACC) = $50K Current Rate = $37k Long Term (10yr Avg) = $74k 5y/o Mid = $78m OPEX = $5k B/E = $29K Current Rate = $21k Long Term (10yr Avg) = $42k 5y/o Small = $42m OPEX = $5k B/E = $17K Current Rate = $9k Long Term (10yr Avg) = $19k $30,000 $25,000 $24,000 $20,000 $15,000 $13,000 $10,000 $5,000 $2,000 $0 Large Mid Small -$5,000 -$10,000 -$8,000 -$8,000 -$15,000 -$13,000 Current Headroom Long Term Headroom

25 Values Values Vs Averages B/E vs Current Rates B/E vs 10yr Avg Demand Vs Supply Summary Capesize 1 Panamax BC 2 Supramax 2 Values Handy BC 3 VLCC 4 Suezmax 5 Aframax 6 LR1 7 MR 8

26 Values Values Vs Averages PPmax Cont 1 B/E vs Current Rates B/E vs 10yr Avg Demand Vs Supply Summary Pmax Cont 2 Handy Cont 2 Feedermax 3 Values VLGC 4 LGC 5 MGC 6 Fully Press 8 Large LNG Midsize LNG Small LNG

27 Ton Mile Demand Vs Net Fleet Growth Average annual demand growth: 5% Ton Mile (Billion) Speed (Knots) kts Last 12 months demand growth: -3% Date Average Laden Speed Average Ballast Speed Date 11.5kts % Change Newbuild 5% 7% Net Scrap

28 Dry Demand Vs Supply 120 Capesize Panamax 140 Ulta/Supra Handy Capesize Panamax & Post Ultra/ Supramax Handy Last 3 years (Avg.) 5% 5% 9% -1.5% Last 12m -3% 2% -1% -11% Est Fleet Growth Est Fleet Growth Avg Demand Avg Supply 5% 4% 10% 7% 7% 5% 9% 8% -6% -1% -1.5% -1.25

29 Crude Demand Vs Supply VLCC Suezmax Aframax VLCC Suezmax Aframax Last 3 years (Avg.) 2% 1.5% 4% Last 12m 1% 1.8% 6% Est Fleet Growth 5% 2% 5% Est Fleet Growth 10% 7% 9% Avg Demand Avg Supply -6% -3% -2%

30 Clean Demand Vs Supply LR MR LR1 MR Last 3 years (Avg.) 12% 12% Last 12m 13% 8% Est Fleet Growth 2% 7% Est Fleet Growth 7% 8% Avg Demand Avg Supply 8% 2.5%

31 Demand Vs Supply Values Vs Averages B/E vs Current Rates B/E vs 10yr Avg Demand Vs Supply Summary Capesize 1 Panamax BC 2 Supramax 2 Values Handy BC 3 VLCC 4 Suezmax 5 Aframax 6 LR1 7 MR 8

32 Final Opinion!!!!

33 Summary Values Vs Averages B/E vs Current Rates B/E vs 10yr Avg Demand Vs Supply Summary Capesize 1 Panamax BC 2 Supramax 2 Values Handy BC 3 VLCC 4 Suezmax 5 Aframax 6 LR1 7 MR 8

34 Summary Values Values Vs Averages B/E vs Current Rates B/E vs 10yr Avg Demand Vs Supply PPmax Cont 1 N/A Pmax Cont 2 N/A Handy Cont 2 N/A Feedermax 3 N/A VLGC 4 N/A LGC 5 N/A MGC 6 N/A Fully Press 8 N/A Summary Large LNG N/A Midsize LNG N/A Small LNG N/A

35 THANK YOU FOR YOUR ATTENTION

36 VESSELSVALUE.COM ClassNK Event London 2015 Adrian Economakis Strategy Director