29 Feb 2016 2015 Annual Results Highlights 2015 2014 US$82m - PowerPoint PPT Presentation

29 Feb 2016

2015 Annual Results – Highlights 2015 2014 US$82m EBITDA US$88m Operating Cash Flow US$99m US$94m Underlying Loss -US$28m -US$56m Net Loss -US$18.5m -US$285m  Reduced losses in one of the weakest dry bulk markets on record  Positive turnaround of Supramax by focusing trades, growing parcelling business and significantly reduced charter-in costs  Reduced vessel opex per day through scale benefits & good cost control  Positive Towage results, RoRo sale fully finalised  Overall G&A reduced by US$19 million  Operating more owned ships and redelivering expiring medium and long-term chartered ships to further reduce our daily vessel costs while enabling greater control and service quality 2 2015 Annual Results

Our Performance in 2015 and Cover for 2016 US$/day Handysize Supramax PB TCE per day 2015 $7,870 $9,170 2015 Market Index Rate $5,110 $6,620 PB Outperformance $2,760 $2,550 54% 39% 2016 PB TCE per day 2016 $7,800 $7,330 % of Contracted Days Covered 44% 59% 3 2015 Annual Results

Our Ability to Outperform Our TCE Outperformance Compared to Market Our business model has been built up and refined over many years. Through a combination of the following factors, we are able Baltic Handysize Index - net rate to generate a premium over market rates due to our high laden PB Handysize Performance percentage (minimum ballast legs): US$/day  Experienced staff & global office network Large fleet of high-quality substitutable ships  14,000 Our cargo contracts, relationships & direct interaction with  12,000 end users $9,340 10,000  An increasing proportion of owned vessels facilitating greater $7,870 control and minimising trading constraints 8,000 Handysize Segment’s versatile ships and diverse trades  6,000 Average premium last 5 years: 4,000 $5,110 Handysize TCE: US$2,650/day (2015: $2,760)  2,000 Supramax TCE: US$1,780/day (2015: $2,550)  0 2011 2012 2013 2014 2015 4 2015 Annual Results

Balance Sheet & Liquidity 31 December 2015 US$m 2015 2014 Cash Position 358 363 Committed but undrawn loan facilities 375 Remaining Newbuilding Capital Commitments 274 Net Borrowings 568 Vessels & Other Fixed Assets 1,611 Net Gearing 35% 40%  New US$125million convertible bonds in 1H15, maturity 2021  US$140million proceeds from RoRo & Towage Sales collected during the year  US$14million of Towage assets sold with payment & delivery early 2016 and about US$22million of towage assets remains in Middle East  Repayment of US$230million Convertible Bonds due 2016 5 2015 Annual Results

Dry Bulk Spot Market at 30 Year Lows Baltic Handysize Index (BHSI) & Baltic Supramax Index (BSI) US$ /day (net)* $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 25 Feb 2016: BSI: $3,260 $4,000 $2,000 BHSI: $2,950 $0 2012 2013 2014 2015 2016 BDI fell 38% in 2015 and registered its weakest average since the index began in 1986  Strong South American grain exports drove up rates in 3Q15  Rates reduced thereafter to record low levels – slight recovery after Chinese New Year  Source: Baltic Exchange 6 2015 Annual Results * Net rates are net of 5% commission

Handysize Vessel Values US$ Million 55 50 45 40 35 30 19 Feb 2016 Newbuilding (35,000 dwt): 25 US$20.5m 20 15 10 5 years (32,000 dwt): US$9.5m 5 04 05 06 07 08 09 10 11 12 13 14 15 16  All time high spread between newbuilding and secondhand values  Leading to very few new orders Increasingly difficult to establish vessel fair market values  7 Source: Clarksons Platou 2015 Annual Results

Dry Bulk Seaborne Trade in 2015 Million Tonnes YOY Change Iron Ore 1,367 2% -5% Coal 1,149 Sub major bulk total 2,516 -1% 122 Bauxite / Alumina 16% 127 Soybean 9% 26 Copper Concentrates 8% 322 Steel Products 5% 56 Sugar 4% 120 PB Focus Fertiliser 4% 162 3% Agribulks 343 0% Forest Products -0.3% 314 Grains (Wheat) 97 -2% Cement 25 -3% Manganese Ore 101 -4% Scrap Steel 44 -21% Nickel Ore 320 -0.3% Others 2% PB focus cargoes total* 2179 0% Total Dry Bulk 4,695 -20% -15% -10% -5% 0% 5% 10% 15% 20% * Minor bulk trade: 1,588 mil tonnes 8 Source: Bloomberg, Clarksons Platou 2015 Annual Results

Chinese Seaborne Dry Bulk Imports 2015 Million Tonnes YOY Change Iron Ore 940 3% Coal 188 -30% Sub Major Bulk Total 1128 -5% Other Coarse Grains 22 91% Maize 5 84% Fertiliser 21 19% PB Focus Soybeans 81 14% Agribulks 15 12% Metals 142 7% Wheat 3 5% Minerals 34 -8% Forest Products 51 -7% Steel Products 16 -5% PB focus cargoes total 389 8% Total Chinese import 1517 -2% -40% -20% 0% 20% 40% 60% 80% 100% 9 * Chinese Minor bulk trade: 278 mil tonnes Source: Clarksons Platou 2015 Annual Results

Self Correcting Supply Factors New Vessel Ordering is Down Number of Delivery Per quarter annualised in % of fleet (dwt) Chinese yards Slippage 25% 24% delivering 20% Handy bulk vessels decreased Orderbook 15% from 54 in 2012 Cancellations & 10% to 23 in 2015 Conversions 11% 5% 3.2% Fleet Growth is Reducing 0.7% 0% 18% 2012 2013 2014 2015 16% Total Drybulk Year-on-Year Net Fleet Increased Scrapping 14% Mil dwt Growth (%) 12% FY14: 16 FY15: 16 mil dwt 30 mil dwt 10% 14 8% 12 6% 10 4% 8 Lowest fleet growth since Jan 2004 6 2% 4 0% 03 04 05 06 07 08 09 10 11 12 13 14 15 16 2 0  2013 2014 2015 1Q16e Scrapping YTD indicates potential contraction (based on of the global fleet for full year 2016 Handysize scrapping (25,000-39,000 dwt) Scrapping YTD) Other dry bulk scrapping 10 Source: Clarksons Platou 2015 Annual Results

Dry Bulk Supply & Demand % Supply: 16.0  2015 net fleet growth: 2.4% 14.0 (smallest growth since 2003)  12.0 New deliveries partly offset by increased scrapping (Handysize: 8.5% new deliveries vs 6% scrapping) 10.0  Low fuel prices 8.0  ↑ increasing ship operating speeds in 3Q 6.0  ↑ increasing effective shipping supply 4.0  Scrapping YTD indicates potential contraction of the 2.4 global fleet in full year 2016 2.0 0.0 -2.0 - 0.8 Demand based on tonne-mile: 04 05 06 07 08 09 10 11 12 13 14 15 16e 17e 18e  2015 overall dry bulk -0.8%; minor bulk: +1% Slower Chinese economic growth:  ↑ hydro-electric power  Net fleet growth ↑ China’s domestic coal industry protection  Effective Demand growth  30% decline in Chinese coal imports Analyst‘s forecast 11 Source: Clarksons Platou 2015 Annual Results

2015 Financial Highlights 2015 2014 US$m (33.8) (39.4) Pacific Basin Dry Bulk 6.2 (15.1) PB Towage (0.2) (1.0) Others Underlying loss (27.8) (55.5)  Unrealised derivative income/(expense) 8.8 (28.9)  Sale of towage assets 2.8 (7.6)  RoRo and towage exchange loss (1.5) (17.7)  Provision for onerous contracts - (100.9)  Towage impairments and provisions - (70.5)  Other impairments and provisions (0.8) (3.9) (18.5) Loss attributable to shareholders (285.0)  Results in line with 26 Nov 2015 announcement  Underlying loss cut in half  Our significantly reduced Towage operation generated US$6.2m profit - US$1.6m from operations and US$4.6m from OMSA transaction 12 2015 Annual Results

2015 Pacific Basin Dry Bulk 2015 2014 Change Handysize Revenue days (days) 56,210 51,600 -8% TCE earnings (US$/day) 7,870 9,340 -16% Owned + chartered costs (US$/day) 7,930 8,750 +9% Handysize contribution (US$m) (8.4) 28.5 >-100% Supramax Revenue days (days) 23,300 22,410 +4% TCE earnings (US$/day) 9,170 10,460 -12% Owned + chartered costs (US$/day) 8,190 11,050 +26% Supramax contribution (US$m) 22.6 (14.8) >100%  Weak market condition impacted both Handysize and Supramax TCE  Significant turnaround in our Supramax performance from:  concentrating on key trades;  more parcelling;  significantly reduced charter-in costs 13 2015 Annual Results

2015 Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Charter-hire : Index-linked Depreciation As at 31 December 2015 Opex Inward Charter Commitments Owned Chartered Days & rates US$/day Blended US$7,930 (2014: US$8,750) 2015-2016 Vessel 10,000 8,930 Days 8,510 8,460 30,000 7,040 7,450 8,000 1,210 1,250 days 25,000 $5,920 2,940 6,000 20,000 2,930 3,000 days 9,650 Market ST days 15,000 Rate 160 $6,920 4,000 690 days ST days Market 10,000 $6,260 Rate 4,370 400 4,210 2,000 10,790 9,340 8,290 5,000 LT days LT days LT days $8,920 $8,040 $7,910 - 0 2015 2016 2017 2014 2015 2014 2015 Vessel Days 23,880 24,800 32,850 27,480 27,480 12,970 8,450 42% 47% 58% 53%  Overheads of US$710/day including all direct & indirect costs  Charter-hire cost significantly reduced 14 2015 Annual Results * Chartered rates are shown net of provision