28 July 2017 2017 Interim Results - Highlights 1H17 1H16 - PowerPoint PPT Presentation

28 July 2017

2017 Interim Results - Highlights 1H17 1H16 US$(5.0)m EBITDA US$56.6m Underlying Loss US$(6.7)m US$(61.6)m Net Loss US$(12.0)m US$(49.8)m Cash Position US$247.6m US$406.1m Net Gearing 40% 29% (New borrowings/Net book value of PP&E)  2017 Market freight rates well above historic lows one year ago and demand outpacing supply  Much reduced underlying loss of US$6.7m and net loss of US$12.0m  Much increased positive EBITDA of US$56.6m  Our Handysize daily TCE earnings outperformed BHSI market index by 20%  Took delivery of our final 7 newbuildings in 1H17 and our cash position was US$248m at mid-year  During the period, we recommenced secondhand acquisitions and have bought and sold one Supramax and bought 2 secondhand Handysize vessels  Our owned fleet expanded to 101 ships on the water, operating 250 dry bulk ships overall and we continue to assess attractive ship acquisition opportunities  We opened a new commercial office in Rio and relocated our HK Headquarters to an improved lower cost office  Our vessel opex and our G&A per day reduced further, lowering the breakeven levels for our owned ships 1 2017 Interim Results

1H17 Performance and 2H17 Cover As at 26 July 2017 US$/day Handysize Supramax PB daily TCE rate 1H17 1 $8,920 $7,920 Market Index Rate $6,590 $8,010 PB Outperformance $1,330 $910 20% 11% PB daily TCE cover 2H17 $8,360 $9,830 % of Contracted Days Covered 57% 80% 1 Excluding short-term vessels days: Handysize daily TCE US$8,010, outperform market 22 % Supramax daily TCE US$9,890, outperform market 24% 2 2017 Interim Results

Handysize Market Rates Development in 1H17 Baltic Handysize Index (BHSI)  Key drivers for 1H17 actual:  1Q17 dry bulk effective demand 4.9% US$/day net* 2016 compared to +0.4% in 1Q16 and -1.7% $8,080 $9,000 in 1Q15 26 Jul 2017 $8,000 $6,970 $7,000  Improved North & South American grain $6,000 exports 2015 $3,760 $5,000  SE Asia coal imports increased $4,000  Strong increase of imports into China $3,000 with minor bulk outpacing iron ore & $2,000 coal $1,000 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2016 2015 * excludes 5% commission 3 Source: Baltic Exchange, data as at 26 Jul 2017 2017 Interim Results

Supramax Rates Follow Same Pattern Baltic Handysize Index (BHSI) and Baltic Supramax Index (BSI) # YTD 2017 US$/day net* BSI $8,700 $10,000 $9,000 $8,000 $7,000 $6,000 BHSI $5,000 $6,970 $4,000 $3,000 $2,000 $1,000 $0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 * excludes 5% commission # BSI is now based on a standard 58,000 dwt bulk carrier 4 2017 Interim Results Source: Baltic Exchange, data as at 26 Jul 2017

Atlantic Rates Stronger than Pacific Supramax (BSI) # Handysize (BHSI) US$/day net* US$/day net* 14,000 12,000 12,000 10,000 Atlantic Atlantic 10,000 $7,340 8,000 $8,440 8,000 Pacific 6,000 $8,200 6,000 Pacific $6,600 4,000 4,000 2,000 2,000 0 0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Atlantic Pacific * excludes 5% commission # BSI is now based on a standard 58,000 dwt bulk carrier 5 2017 Interim Results Source: Baltic Exchange, data as at 26 Jul 2017

Estimated 3.9% Growth in Seaborne Dry Bulk Demand in Full Year 2017 (Volume) YOY Change Million Tonnes 5% Iron Ore 1,488 3% Coal 1,173 4.3% Major bulk total 2,661 20% Manganese Ore 30 7% Soybean 144 Clarksons estimate FY2017: 7% Fertiliser 161 6% Scrap Steel 107 5%  3.9% Effective Demand Growth Bauxite / Alumina 120 PB Focus 4% Wheat / Grains 361 4% Agribulks 169  3.5% Volume Growth 2% Forest Products 360 2% Nickel Ore 42 Cement 112 2% Others 315 2% Copper Concentrates 29 0% Steel Products 395 -3% Sugar 58 -6% PB focus cargoes total 2.5% 2,403 2017 Total Dry Bulk 3.5% 5,065 Full Year Forecast 6 Source: Clarksons Platou, as at 1 July 2017 2017 Interim Results

Orderbook Continues to Shrink Handysize Orderbook New Vessel Ordering is Down 170 vessels (6.3 million dwt ) % of Fleet (dwt) Historically low Mil Dwt 50% levels of ordering 5.0 5.9% 40% 4.0 49% 4.5% 30% Shortfall 3.0 20% H’max : 0.7% 2.9% 4.6m 2.5% 10% 2.0 H’size : 0.5% 1.0% 2.3m 0% 1.0 2000 2005 2010 2015 2017 Annualised Handymax Ordering (40-64,999 dwt) 0.0 Scheduled Actual 2H17 2018 2019+ Handysize Ordering (10-39,999 dwt) orderbook delivery 1H17 Total Dry Bulk Orderbook  Shortfall vs scheduled deliveries remains high 637 vessels (60.9 million dwt) Mil Dwt  Net fleet growth estimated at 3% this year 50 5.2%  Very low new vessel ordering in last 18 months 40 38% influence by: Shortfall  Secondhand values still low 30 3.2% 3.0% 2.8%  New low sulphur and Ballast Water Treatment 42.4m 20 1.7% System regulations create uncertainty of design 26.3m 10  New accounting rules from 2019 discouraging long-term time charters 0 Scheduled Actual 2H17 2018 2019+ orderbook delivery Source: Clarksons Platou, as at 1 Jul 2017 2017 Interim Results 7 1H17

Vessel Values Increased Handysize Vessel Values US$ Million 60 50 40 30 Newbuilding (35,000 dwt): US$21.5m 20 10 5 years (32,000 dwt): US$14m 0 04 05 06 07 08 09 10 11 12 13 14 15 16 17  Improved freight market conditions supported increased vessel values  Sale and purchase activity has increased  Newbuilding and secondhand prices have increased  Gap between newbuilding and secondhand prices, continues to discourage new ship ordering 8 Source: Clarksons Platou, as at 26 Jul 2017 2017 Interim Results

Dry Bulk Supply & Demand % YOY 10  Demand is recovering and outpacing supply so far in 2017 8  For full year 2017: 6  Clarksons estimate effective 4.9% demand growth of 3.9% 4  PB estimate net supply growth 3.4% 2.2% around 3% 2 (5% deliveries – 2% scrapping) 1.9%  0 Progressively fewer new ships will deliver from shipyards in 2018 and -2 2019 2013 2014 2015 2016 1Q17 Effective Demand Growth (%) Net Fleet Growth (%), (Deliveries net of scrapping) Source: Clarksons Platou, Pacific Basin 9 2017 Interim Results

2017 First Half Financial Highlights 1H17 1H16 US$m (6.3) (60.4) Dry Bulk (0.4) (1.2) Towage & Others Underlying loss (6.7) (61.6)  Unrealised derivative (expenses)/income (2.6) 13.7  Office relocation costs (1.4) -  Impairment of towage vessels (0.9) -  Sales of vessels (0.4) (1.9) (12.0) (49.8) Loss attributable to shareholders  Revenue and cost of services increased by 44% and 33% respectively, mainly due to improved market conditions  US$(2.6)m unrealised derivative accounting loss:  M2M of existing and new bunker swap contracts to be completed  US$(0.4) disposal loss:  Sales of 2 tugs and 1 Supramax 10 2017 Interim Results

1H17 By Vessel Segment 1H17 1H16 Change Handysize Revenue days (days) 23,070 25,660 +11% TCE earnings (US$/day) 7,920 6,080 +30% Owned + chartered costs (US$/day) 7,550 7,300 -3% Handysize contribution (US$m) 7.8 (30.2) >+100% Supramax Revenue days (days) 17,330 14,180 +22% TCE earnings (US$/day) 8,920 5,910 +51% Owned + chartered costs (US$/day) 8,360 6,370 -31% Supramax contribution (US$m) 9.1 (6.8) >+100%  Both Handysize and Supramax contributions returned to positive territory as we continue to leverage our business model to outperform in the improved but still challenging market  Excluding short-term vessel days:  Handysize daily TCE US$8,010 on 21,460 days  Supramax daily TCE US$9,890 on 8,980 days 11 2017 Interim Results

Balance Sheet US$m 30 Jun 17 30 Dec 16 Vessels & other fixed assets 1,763 1,653 Total assets 2,107 2,204 Total borrowings 952 839 Total liabilities 1,174 1,066 1,030 1,041 Net assets Net borrowings (total cash US$248m) 705 570 Net borrowings to net book value of property, plant and equipment 40% 34%  Vessel average net book value: Handysize $15.6m (9.4 years); Supramax $22.8m (6.3 years)  KPI: maintain net gearing below 50%  Group in compliance with all loan covenants 12 2017 Interim Results

1H17 Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) As at 30 June 2017 Charter-hire : Index-linked Depreciation Opex Inward Charter Commitments Owned Chartered US$/day Days & rates Blended US$7,550 (FY2016: US$7,320) 2017-2018 10,000 Vessel Days 7,840 7,620 15,000 7,480 8,000 1,000 6,730 820 760 12,000 days 6,000 100 days $7,670 2,870 Market 2,840 520 days 9,000 Rate 6,720 Market ST days 40 4,000 Rate $7,370 ST days 1,680 6,000 $6,350 ST days $7,080 2,000 3,970 3,820 7,750 3,000 4,570 4,620 LT days LT days LT days $8,440 $7,990 $8,170 - - FY2016 1H2017 FY2016 1H2017 1H17 2H17 2018 Vessel 12,050 6,820 7,890 25,650 13,840 22,530 12,050 Days 53% 53% 47% 47%  Daily cash cost before overhead: US$6,310 (1H16: US$6,010)  Charter-hire costs increased due to new ST charters in stronger market  Opex further reduced due to scale benefits  Overheads reduced to US$590/day (1H16: US$680/day) - includes all direct & indirect costs 13 2017 Interim Results * Chartered rates are shown net of provision