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INVESTOR PRESENTATION
September 2014
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DISCLAIMER
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Forward‐Looking Statements This presentation contains forward‐looking statements regarding future events and financial performance. In some cases, you can identify these statements by words such as “may,” “might,” “will,” “should,” “except,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of continue, these terms and other comparable terminology. These statements involve a number of risks and uncertainties and are based on numerous assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control. There are or may be important factors that could cause our actual results to materially differ from our historical results or from any future results expressed or implied by such forward looking statements. These factors include, but are not limited to, those discussed under the section entitled “Risk Factors” in our Annual Report on Form 20‐F, filed February 14, 2014, which is available at the U.S. Securities and Exchange Commission website at www.sec.gov. The forward‐looking statements in this presentation are based upon management's reasonable belief as of the date hereof. The Company undertakes no obligation to revise or update publicly any forward‐looking statements for any reason.
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TOP SHIPS HISTORY
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IPO July 2004 and follow-on after 3 months, raised abt $300 million
Fleet grew from 7 vessels in July 2004 to 33 vessels in October 2006
Became a major owner of double-hull MR and Suezmax tankers
2008-2013: well timed chartering and sale of vessels; Oct 2013 sold the entire fleet and focused on ECO MR Product Tankers
2014: acquired 6 ultra high spec ECO MR Product Tankers under construction at Hyundai Mipo
Follow-on June 2014, raised $21.3 million
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SUBSTANTIAL DISCOUNT TO NAV
STOCK AT A 47% DISCOUNT TO NAV (AS OF MARKET CLOSE 29 AUGUST 2014: $2.06)
Market Value of fleet (fully delivered basis - charter free)* 219.0 Less remaining CAPEX for newbuildings as of June 30, 2014 130.7 -
Less debt as of June 30, 2014 (net of unamortized financing fees) 19.9 -
Add other assets, net of other liabilities as of June 30, 2014 (excluding warrants) 5.1
Net Asset Value 73.5
Shares outstanding NAV/Share 3.87$
* market value is a company estimate
NET ASSET VALUE (amounts in $m)
NAV / Share18,969,989
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$30m
$35m
$40m
$45m
$50m
$55m
$60m
upside potential
to NAV
10yr MR2 newbuilding average price – $40.6M (Drewry)
Average value of TOPS vessels $36.5M – (total fleet value $219M – company estimate)
Highest MR newbuilding resale $57.5M
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UPSIDE POTENTIAL TO NAV
Implied Average value of TOPS vessels at $2 per share < $31M
Gap to
NAV
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Ship Name M/T StenaWeco Energy (DELIVERED)
HULL - S407
HULL - S418
HULL - S419
HULL - S414
HULL - S417 ConstructionFirm contractsOptionsExpected delivery date
2014
$18,400
$16,000 $16,750
$15,200
$15,200
$16,000 $16,750
$16,800 $17,600
$16,200 $17,200 $18,000
2023$17,350
$16,200 $17,200 $18,000
2018 2019 2020 2021 2022$16,500 $18,100
2015 20172016
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REVENUE VISIBILITY
Contracted revenue: $199 M ($124M firm / $75M options) Contracted days: 12,045 (7,665 firm / 4,380 options) Average duration of charters (firm / incl. options): 3.5 years / 5.5 years Average daily TCE (firm / incl. options): $16,114 / $16,538
1 vessel delivered, 5 vessels under construction with expected deliveries from Q1 2015 to Q3 2016; ALL ON TIME CHARTERS UPON DELIVERY
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ECO vessel design with latest ECO G-type engines
Large number of options added to yard’s basic
specification
Ability to carry more cargoes than industry average
due to phenolic epoxy coating of tanks
Unified Fleet (sister ship vessels)
Hyundai built – world’s largest shipbuilding group
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HIGH SPECIFICATION FLEET
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ECO FLEET – ECO VS NON ECO
ECO Vessel Characteristic Non-ECO vessel
24.3t/day Fuel consumption (NCR)* 32.6t/day
Higher by abt $5000** Fuel consumption saving
effect on daily Time Charter Equivalent rate
N/A
5% - 22% % of Fleet built from 2013 onwards (currently and in
2017)*** 95% - 78%
Higher Charterers’ preference on vessel type Lower
Higher Rate of value
appreciation in good market
Lower
Higher => Enhanced Tradeability Compliance to latest
environmental regulations
Lower => Reduced Tradeability
*** Source Drewry / Industry Sources ** Assuming fuel oil cost at $600/ton * See Appendix
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Evangelos Pistiolis CEO and Founder 22 yrs shipping experience
Alexandros Tsirikos CFO 10 yrs shipping experience 7 yrs with the company
Vangelis Ikonomou COO 30 yrs shipping experience 12 yrs with the company
Dimitris Souroullas CTO 30 yrs shipping experience 8 yrs with the company
92 years of combined shipping experience
STRONG MANAGEMENT TEAM
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“BP plc”, is a British multinational oil and gas company headquartered in London, England. It is one of the six oil and gas “supermajors”
“NORDEN A/S“ is a Danish shipping company that was founded and listed in 1871. It operates globally in dry cargo and tankers with an active fleet of 285 owned and chartered vessels.
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HIGH QUALITY CHARTERERS
Stena Weco A/S has a fleet of about 50 MR tankers with offices in Europe (Copenhagen, Denmark), USA (Houston, Texas) and Singapore. It is the joint venture between Stena Bulk and Weco, both established companies in the petroleum product transportation industry.
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New refining capacity closer to the oil reserves, Middle East in particular
Limited new refinery expansion in OECD countries combined with refinery closures due to poor margins
Arbitrage trading emerging as competing refineries are opening up in many different countries
INCREASE IN TONNE MILES DUE TO:RELOCATION OF REFINERIES FAVOURABLE MARKET FUNDAMENTALS
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INCREASE IN TONNE MILES DUE TO:NEW ROUTES FAVOURABLE MARKET FUNDAMENTALS
Established RoutesNew Routes
N. Europe – N. AmericaGasoline
Mid East – EuropeGasoline, Jet Fuel
S. Korea – JapanGasoline, Gas Oil
Intra AsiaNaphtha, Gas Oil
Asia – AustraliaGasoline, Gas Oil
Mid East – AsiaNaphtha
Asia – N. AmericaJet Fuel, Gas Oil, Diesel
Mid East – N. AmericaDiesel
Intra EuropeGasoline, Naphtha, Gas Oil
Caribbean – N. AmericaGasoline, Naphtha, Gas Oil
N. America – S. AmericaDiesel
N. America – EuropeDiesel
Seaborne Refined Products Trades
Principal Load/Discharge Zones
Source: Drewry
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US is now a major net exporter of products
US crude oil production has risen to levels unseen in 22 years
Due to restrictions in US crude oil exports, excess US crude oil is refined and exported to Europe, South America and Far East
Around 0.5m barrels per day of extra refining capacity has been added to US Gulf refineries in the last few years
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FAVOURABLE MARKET FUNDAMENTALS INCREASE IN TONNE MILES DUE TO: RISE IN US PRODUCT EXPORTS
Source: Drewry
Exports of petroleum products
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1/1/2002 1/1/2003 1/1/2004 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014
United States Saudi Arabia India
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TOP SHIPS: A GROWTH PLATFORM KEY HIGHLIGHTS
TOPS is the only ECO MR Pure Play
Stock at 47% discount to current NAV estimate (as of Aug 29th market close)
Upside potential for NAV as vessel values appreciate towards historical averages
High specification ECO Fleet
Strong management team with proven track record and familiarity with
growth
Revenue visibility with high quality Charterers
Favourable market fundamentals
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Appendix Fuel consumption specifications per Shipbuilding Contracts
ECO VESSEL (based on M/T StenaWeco Energy shipbuilding contract)
NON-ECO VESSEL (based on M/T Hongbo contract – vessel sold Oct 16th 2013)
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