Saudi Fransi Capital ANNUAL SAUDI EQUITIES DAY 28 th November 2013
Disclaimer This presentation, its enclosures and appendices have been prepared by The National Shipping Company of Saudi Arabia (Bahri) for information purposes only. It is subject to change without further notice and may not contain all material information concerning Bahri. This presentation has not been reviewed or registered with any public authority or stock exchange. This presentation is intended to be for information purposes only and doesn t contain enough information about the marine shipping industry and its different market segments to help investor or analyst make a decision for an investment in Bahri stocks 2
Table of Content Crude Oil Shipping Markets Overview Company Overview Oil & Gas Chemical Transport General Cargo Dry Bulk Ship Management Financial Overview Awards & Competitive Advantages 3
41.4 39.0 41.3 42.4 48.4 46.4 47.0 46.5 46.0 43.9 45.7 45.2 45.4 46.6 45.8 47 Mn bbls/day 89.8 85.4 88.3 88.9 89.9 90.8 92.0 92.8 Crude Oil Demand & VLCCs Fleet OECD vs. non-oecd Oil Demand 105.0 90.0 75.0 60.0 45.0 30.0 15.0 0.0 2008 2009 2010 2011 2012 2013 E 2014 E 2015 E OECD Non-OECD Total Demand Source: IEA,2013 4
Crude Oil Seaborne Trade Cargo Volume by Import Region 2012(Mn t) Cargo Volume by Export Region 2012(Mn t) Other Areas 7% Others 11% N. Europe & Baltic 3% Indian Subcontinent 13% S.E. Asia & Oceania 11% S. America Atlantic 6% Others 1% Caribbean 1% North Sea 1% S. America Pacific 1% West Africa 10% Asia Far East 55% Middle East 81% Crude oil seaborne traded by: VLCC Suezmax Aframax Panamax VLCCs carry approximately 40% of the crude oil volume transported by sea, primarily deployed on long-haul routes. 5
Number of VLCC VLCC Market VLCC FLEET AGE PROFILE 300 250 200 150 100 50 0 0 24 58 169 147 239 63 Operational VLCC fleet stands at 637 VLCCs compared to 520 VLCCs in Sep 2008 representing an increase of approximately 23% The newly delivered VLCCs over the past five years reduced the average age of the fleet to 8 years Scrapping of older VLCCs has increased since 2010 and last year saw the highest number of VLCC depletion since 2003 The average scrapping age has decreased to 20 years VLCCs New Building Year 2005 2006 2007 2008 2009 2010 2011 2012 VLCCs Contracted 35 103 22 60 24 51 8 12 Avg NB Price ($ million) 123 126.4 137.6 154.5 116.8 104.9 100.7 93.7 Source: Clarksons November 2013 6
Bahri Overview
Vision Connecting Economies, Sharing Prosperity and Driving Excellence in Global Logistics Services. Planning & Business Development 8
Overview Shareholder Structure Diversified Operations 72% Strong Balance Sheet 28% Public Investment Fund Free Float Multi-ocean shipping activities 1. Crude Oil 2. LPG 3. Liquid Chemical 4. General Cargo 5. Dry Bulk 6. In-house Ship Management Sustainable Profitability 12 11.5 11 10.5 10 9.5 9 Total Assets (SAR Billions) Total Assets ($ billion) 11.529 11.063 10.623 10.337 9.966 2009 2010 2011 2012 Sep. 2013 600 500 400 300 200 100 0 Net Income (SAR Millions) 503 369 415 288 423 2009 2010 2011 2012 Sep. 2013 9
Bahri Organization Organized in Five Strategic Business Units (SBUs) Chemical Oil & Gas General Cargo Dry Bulk Ship Management 10
Vela Acquisition Highlights Transaction Timeline Event Long-term Agreements with Aramco Date MoU Signing 27/6/2012 Definitive Transaction Agreements Signing 4/11/2012 Expected EGM Approval* Q4 2013 Expected First Ship Transfer* Q1 2014 Expected Last Ship Transfer* Q2 2014 *Timeline is subject to obtaining all required regulatory approval Transaction Value Total transaction value SAR 4.875 billion: Cash payment of SAR 3.122 billion Issuance 78.75 million new shares at an agreed price of SAR22.25 per share Aramco will own 20% of Bahri post transaction Fourth Largest VLCC Owner Globally Long-term shipping contract Exclusive VLCC crude oil shipping provider to Aramco for crude sold on a delivered basis The contract include a TCE floor and threshold 40 35 30 25 20 15 10 5 0 37 NIOC 32 32 31 Mitsui O.S.K. Lines Fredriksen Group Bahri 28 Nippon Yusen Kaisha Source: Clarksons November 2013 11
Crude Oil Transport
Oil & Gas SBU Oil Owns 17 VLCC Average Age: 9 years 15 Spot Market 2 Time Charter to Hanjin (expires in 2014) Gas Owns 30.3% in Petredec Limited- Liquefied Petroleum Gas trader and ship owner Among the world's largest LPG trading and shipping companies Operates 52 LPG tankers in 5,000-85,000 cbm Owns 19 LPG tankers Delivered more than 10 million tons per year to customers across 5 continents 13
Ranks 8 th Largest VLCC Owner 40 37 Number of DH VLCCs Owned 35 30 32 32 28 25 24 20 15 18 18 17 17 15 10 5 0 Source: Clarkson November 2013 14
Chemical Transport
Chemical Transport SBU Operated through National Chemical Carrier (NCC) (80% owned by Bahri and 20% by SABIC) Fleet: 3 tankers (37,500) MT 10 Chemical tankers (46,200) MT 10 tankers (45,000) MT Average Age 5 years Type of Chartering Arrangement: 3 on Bareboat Charter to Odfjell (Capital Lease) 9 on Time Charter (8 to SABIC & 1 to SIPCHEM) 11 in the spot market One large tanker (75,000 DWT) under construction at Daewoo shipyard (to be Chartered to SABIC) 16
Ranks 3 rd Largest Owner 1,400 1,200 1,177 1,125 Chemical Tankers in 000 DWT 1,027 1,000 867 800 793 748 736 720 714 688 600 400 200 - Tokyo Marine Co. Ltd A. P. Moller NCC Odfjell ASA MISC Torm, Dampskibss Capital Maritime Eitzen Group Stolt-Nielsen Ltd. Iino Kaiun Kaisha Source: Clarkson November 2013 17
General Cargo
General Cargo Highlights Owns 4 Multipurpose ships operational and 2 ships under construction Operate as a liner between the US/Canada west cost ports and Indian Subcontinent ports passing by Red Sea & Arabian Gulf Exclusive full logistics provider to Ministry of Defense 19
General Cargo New RoCon Ships An investment of more than SAR1.5 Billion in building 6 new RoCons. Ship 2013 Bahri ABHA 5 th Feb Bahri HOFUF 30 th April Bahri TABUK 2 nd July Bahri JAZAN 29 th October Ship 2014 Bahri JEDDAH 1 st Half Bahri YANBU 1 st Half 20
Dry Bulk
Dry Bulk SBU Formed as a JV between Bahri (60%) and ARASCO (40%) with a capital of SAR 200 million Started operations early 2012. Now time chartered five bulkers to carry grain import into KSA Signed contract to build 5 Eco Kamsarmax ships with a total investment of SAR 656 million which will be delivered in late 2013 and early 2014 Total Investment expected to reach SAR 1.3 billion in the next few years BARLEY CORN SOYBEAN WHEAT 22
Ship Management
Ship Management SBU Mideast Ship Management is the technical manager for all Bahri fleets based in Dubai, UAE. Highly qualified shipping professionals to ensure that the vessels are operated to the high industry standards. Has an excellent track record for Safety. Quality & efficient technical management are key focus. 24
Financial Overview
Financial Highlights In SAR "000 except per share Annual (Audited) 2012 2011 2010 2009 2008 Revenues 2,464,628 1,991,084 2,049,830 1,672,016 2,594,530 Net Profit 503,993 287,768 414,877 369,300 749,968 EPS (SAR) 1.6 0.91 1.32 1.17 2.38 EBITDA 1,030,301 745,739 862,117 842,322 1,242,923 Dividends per share(sar) 1 0.5 1 1 1.5 Current Assets 1,117,187 1,042,280 1,578,464 1,226,804 1,579,185 Current Liabilities 1,007,168 944,248 736,030 609,791 817,726 Total Assets 11,063,609 10,623,211 9,966,279 10,338,583 9,819,426 Shareholders' Equity 5,410,914 5,062,623 5,089,691 4,987,519 5,090,796 Cash Flow From Operations 672,625 398,319 781,572 436,621 1,142,291 26
Ratios 2012 2011 2010 2009 2008 Dividends Payout Ratio (%) 62.5 54.73 75.93 85.3 63 Net Profit Margin (%) 20.45 14.45 20.24 22.09 28.91 EBITDA Margin (%) 41.8 37.45 42.06 50.38 47.91 Return On Assets (%) 4.56 2.71 4.16 3.57 7.64 Return On Equity (%) 9.31 5.68 8.15 7.4 14.73 Equity/Assets (x) 0.49 0.48 0.51 0.48 0.52 Current Ratio (x) 1.11 1.1 2.14 2.01 1.93 Debt/Equity (x) 0.87 0.94 0.81 1 0.87 27
Profitability & Dividends Dividends Payment Bahri has been paying dividends since 2004 28% Bahri average payout ratio for the past five years was 68% Dividends Yield Bahri has maintained higher dividends yield compared to TASI Net Income & Dividends (SAR million) Dividends Yield 800 750 72% 10 9.1 700 600 500 400 300 200 100 0 504 369 414 288 472.5 Total Assets ($ billion) 315 315 315 157.5 2008 2009 2010 2011 2012 8 6 4 2 0 5.6 5.7 5.2 4.4 4 4.1 4.1 2.7 2.8 3.1 3.3 3.6 1.8 2006 2007 2008 2009 2010 2011 2012 Dividends Net Income Bahri Dividends Yield TASI Dividends Yield Source: Bloomberg 28
Awards & Competitive Advantage
Awards Won The Most Transparent Saudi Public Company Award 2010 One of the top 50 Arab companies that made the S&P HAWKAMAH ESG Pan Arab index is composed in 2011 Euromoney Award for the Best Managed Company in the Middle East in the Transport and Shipping sector in 2012 30
Awards Bahri achieves International recognition by receiving the Seatrade 2013 Global Performer award in London on May 10 th 2013 Bahri achieves International recognition by receiving the Seatrade 2013 The Energy:Oil & Gas Award in Dubai on November 10 th 2013 31
Competitive Advantages Young and growing fleet In-house commercial and technical expertise Financially well positioned to support growth plans Competitively lower operating cost Well positioned to take advantage of shipping rates rebound 32
Thank You! Email: investorrelations@bahri.sa For more info, please visit: www.bahri.sa