PRECIOUS SHIPPING PUBLIC COMPANY LIMITED SET Opportunity Day, - PowerPoint PPT Presentation

PRECIOUS SHIPPING PUBLIC COMPANY LIMITED SET Opportunity Day, Website http://www.preciousshipping.com 11th Floor, SET Building, E-Mail psl@preciousshipping.com 0900 Hours, 22nd February 2010 . 1 Precious Shipping PCL

Industry Overview Precious Shipping PCL 2

INDUSTRY OVERVIEW TYPE OF VESSELS SHIPPING COMMERCIAL CRAFTS DRY TRADES TANKER TRADES PASSENGER CARGO CHEMICAL CRUISE FERRIES DRY CARGO MULTI PURPOSE CAR CARRIERS TRAWLERS CONTAINERS REEFERS GAS CLEAN SMALL HANDY 10 - 30 , 000 DWT CRUDE PSL HANDYMAX 30 - 50 , 000 DWT SUPER HANDYMAX 50 -6 0 , 000 DWT PANAMAX 6 0 - 80 , 000 DWT CAPESIZE 80 , 000 + DWT Precious Shipping PCL 3

PSL Fleet Number Of Vessels * 22 Average Age (Simple Average) 15.82 years Insured Value/Market Value * USD 283.50 Million Book Value USD 207.25 Million Total DWT 549,559 Total LDT 122,941 Average DWT per Vessel 24,980 Aries Valuation as on 1 st Jan 2009: USD 232 Million (21 Ships)** Aries Valuation on 1 st Jan 2008: USD 695 Million (21 Ships)** Aries Valuation as on 1 st Jan 2007: USD 399 Million (21 Ships)** * As on 12 th February 2010 ** Excluding new acquisitions in 2010 Precious Shipping PCL 4

The Market as manifested by the BDI 10500 BDI (Cape, Panamax, Supramax and Handy) All time High - 11793 – 20 th May 2008 Recent low – 663 – 5 th December 2008 8500 Previous Highs - 11039 – 13 th November 2007 - 6208 – 6 th December 2004 - 4,291 – 3 rd June 2009 6500 All Time Low - 554 - July 1986 Latest – 2,575 – 11th Feb 2010 Largest daily fall – 963 – 12 th June 2008 4500 2500 BDI 500 Dec-85 Dec-86 Dec-87 Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Precious Shipping PCL 5

Baltic Dry Index (BDI) - Annual Averages 8,000 7,000 7,065 6,000 6,390 5,000 4,000 4,510 3,000 3,371 3,180 2,000 2,617 2,617 1,000 1,137 0 2002 2003 2004 2005 2006 2007 2008 2009 Index Value Precious Shipping PCL 6

2009 the year of the Unexpected • China Iron Ore imports: • Estimated: +/- 10% over 2008 • Actual: +42% over 2008 • China Steel production: • Estimated: -10 to -20% over 2008 • Actual: +14% over 2008 • China Coal imports ~ 120 MMT instead of the usual 80 to 85 MMT of Coal exports. • Congestion: +5% of the entire Dry Bulk world fleet. • Under utilization of the world fleet due to problems with Trade Finance, Import / Export bans etc. • Slippage in delivery of New Ships: 41% Precious Shipping PCL 7

China - Some Facts • Shanghai has built more skyscrapers in the past 15 yrs than New York did in a century • Iron Ore imports: for 2006: 326 MMT, for 2007: 383.6 MMT, for 2008: 444 MMT, for 2009: 628 MMT or 41.5% above 2008 and expected to reach 675 MMT in 2010!! • Coal Imports: 2007: 51 MMT, 2008: 41 MMT, 2009: 120 MMT, expected for 2010 +150 MMT after being an exporter of about 80 MMT per annum for last decade! • Coal production increased to 3.3 BMT and needs to grow to sustain Electricity demand. • Steel Production: 2004: 280.5 MMT, 2005: 349.5 MMT, 2006: 421 MMT, 2007: 490 MMT, 2008: 502 MMT, 2009: 566+ MMT and expected to reach 575+ MMT in 2010. • Steel Exports: 05: 27.6 MMT, 06: 52 MMT, 07: 63 MMT, 08: 59.2 MMT, 09 estimated 37 MMT. Precious Shipping PCL Source : Bloomberg/other news 8

Summary of Fundamental Demand Drivers • World population is increasing and we shall hit 7 Billion people by 2012! • More wealth has been created in the last 2 decades than ever before as measured by the number of millionaires! • Eating habits have changed from a vegetarian diet to a more meat oriented diet requiring much more grain to be transported. • Urbanization is growing by leaps and bounds. In 1950 it was 29.1% by 2000 it had leaped to 47.1% or 2.9B people, and by 2010 it is expected to be 51.3% or 3.5B people! • Infrastructure development is continuing. In the GCC countries they are spending USD 2.4T on Infrastructure and Urbanization. • Infrastructure in the developed world is old and dilapidated and needs to be fully over-hauled and revamped. • Concerted world-wide Government stimulus plans in $ Trillions! Precious Shipping PCL Source : Bloomberg/other news 9

Supply Side Analysis Precious Shipping PCL 10

Dry Bulk Fleet as of 1st January 2010 Ship Type DWT Range (MT) Ships Av Age Total DWT Av DWT % of DWT ( yrs) ( m MT) (MT) 10,000 - 29,999 3126 18.8 62.04 19,846 12.96% Small Handy* 30,000 – 39.999 Handymax 965 17.8 33.71 34,936 7.04% 40,000 – 59,999 1865 11.9 91.91 49,284 19.20% Super Handymax 60,000 – 89,999 Panamax 1553 12.9 113.81 73,281 23.78% Capesize 90,000+ 1033 11.4 177.21 171,545 37.02% Total / Average 8542 15.2 478.68 56,038 100% * Small Handy includes tween deckers of 10-30K DWT Precious Shipping PCL Source : CRS/Aries 11

Industry Overview – Small Handies ( As of 1st Jan 2010) NEW BUILDINGS ON ORDER UPTO DEC 2013 (13.9%) Number of Ships 285 118 27 2 Average Size (DWT) 18,801 19,429 22,681 29,000 10.00% 9.00% 9.10% 8.00% 7.00% 6.00% 5.00% 4.00% 3.80% 3.00% 2.00% 0.90% 1.00% 0.10% 0.00% '10 '11 '12 '13 As % of fleet size as at 1st Jan 2010 Precious Shipping PCL Source : CRS/Aries 12

Industry Overview – Small Handies ( As of 1st Jan 2010 ) POTENTIAL SCRAPPING OF SHIPS 27 YEARS OR OLDER UPTO DEC 2013 (49.80% !) Number of Ships 1,169 152 151 83 18,844 22,716 22,138 21,465 Average Size (DWT) 40.00% 35.00% 37.40% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 2.70% 4.80% 4.90% 0.00% '10 '11 '12 '13 As % of fleet size as at 1st Jan 2010 Precious Shipping PCL Source : CRS/Aries 13

Confirmed Orders as of 01 Jan 2010, all ships (to 2013) 300.00 250.00 274.43 200.00 212.00 150.00 100.00 100.00 77.25 50.00 62.43 22.75 0.00 DWT ( million MT) %age Total Estabilished Yards Green Field Yards Precious Shipping PCL Source: CRS - PSL 14

Confirmed Orders: Established vs Green Field Yards As of 1st Jan 2010 200.0 Existing DWT as of 1st Jan 2010 Estabilished Yards 180.0 177.2 Green Field Yards Potential scrappings(upto 2013) 160.0 140.0 DWT ( million MT) 118.7 120.0 113.8 100.0 91.9 80.0 62.0 60.0 36.3 40.0 35 33.8 33.7 30.6 32.8 39.7 24.7 17.8 20.0 17.5 6.4 9.6 10.7 5.2 1.9 0.0 x x x e e a a a z z m m i m i s s y y a e a d d n r p p n n a a u a a C P S h h Precious Shipping PCL Source: CRS - PSL 15

Confirmed Orders: Established vs Green Field Yards As of 1st Jan 2010 350 Existing DWT as of 1st Jan 2010 Estabilished Yards 291 300 Green Field Yards Potential scrappings(upto 2013) 250 DWT ( million MT) 200 187.6 151.5 150 100 81.90 64.40 60.5 50 44.6 17.8 0 Cape+Panamax Supramax+Handymax+Handy Precious Shipping PCL Source: CRS - PSL 16

Contract values second hand ships (1999-2008) Value ( bn USD) 60 52.5 50 40 36.1 Value ( bn USD) 35.8 28.8 30 27.2 20 16.8 8.9 10 7.9 7.8 5.7 0 9 0 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 9 0 0 0 0 0 0 0 0 0 1 2 2 2 2 2 2 2 2 2 Precious Shipping PCL Source: Aries 17

Owners, Financiers, Relationship (What Relationship?) • Total value of the second hand market between 2004 – 2008: USD 180.4 bn • If 65% was funded by debt, Shipping Banks are on the hook for: USD 117.26 bn • Value drop across the spectrum of ships has been savage, say, 70% • Owners would have funded 35% or about USD 63.14 bn which has been wiped out! • Value of the ships purchased in the last 5 years would now be about: USD 54.12 bn • Shipping Banks would have to write down enormous amounts, around: USD +60 bn! • Obvious changes in the ‘normal’ relationship would be: • Minimal or no more funds available to lend and if at all then only to: • Well known and ‘good’ owners with long term contracts to ‘good’ clients • Margins would sky-rocket • Repayment periods would be shortened • Covenant ‘heavy’ legal documents would have to be signed for any such funds Precious Shipping PCL 18

Estimated contract values new buildings (2009-2012) Value ( bn USD) 250 196 200 188 151 Value ( bn USD) 150 100 57 50 0 9 0 1 2 0 1 1 1 0 0 0 0 2 2 2 2 Precious Shipping PCL Source: CRS 19

Estimated contract values - new buildings (2009-2012) 592 bn USD over 4 years …or 324 million USD per day …or 13.50 million USD per hour …or 225,000 USD per minute … or 3,750 USD per second ! 20 Precious Shipping PCL

Slippage in Delivery of New Buildings Precious Shipping PCL 21

Dry Bulk Fleet - New Buildings Projected vs Delivered DWT 80 70 %age Average slippage 2002-2007: -10.6% 73.17 %age Slippage for 2008: -23.3% 60 %age Slippage for 2009: -41.0% 50 DWT m MT 40 43.16 30 31.51 27.92 26.52 20 24.11 24.16 22.64 21.01 18.95 20.36 16.63 20.57 10 13.79 13.03 11.69 0 2002 2003 2004 2005 2006 2007 2008 2009 Year Projected Delivered Precious Shipping PCL Source : CRS/Aries 22