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Capital Link 4th Annual International
Shipping & Marine Services Forum
London, 6th October 2011
Disclaimer
Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements reflect the current views of Hellenic Carriers Limited ("the Company") with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in the Company's operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. The Company does not assume, and expressly disclaims, any obligation to update these forward-looking statements.
This presentation release is not an offer of securities for sale in the United States. The Company's securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. person absent registration pursuant to, or an applicable exemption from, the registration requirements under U.S. securities laws.
Company Profile
Hellenic Carriers Limited
Hellenic Carriers Limited is a dry bulk shipping
company incorporated in Jersey with shipping
management functions based in Greece
The Company listed on AIM in November 2007
The current fleet includes 3 Panamaxes and 2
Supramax vessels trading along worldwide routes and
transporting coal, iron ore, grains, steel products and
other dry bulk cargoes
3
Hellenic’s Profile
4
Diversified Fleet Composition
Operating in the Panamax and Supramax shipping sectors
Reduced volatility and greater flexibility in cargoes and trading routes
5 vessel fleet and 2 Kamsarmax newbuildings on order
Experienced Management
Founders’ family involvement in shipping dates back to the early 1950s
Company adopts high standards of fleet operations, quality and safety
Environmental protection is a key policy: Company is ISO 14001 certified
Pro-active Chartering Strategy
Taking advantage of the market cycles and volatility – securing long term charters at favourable rates prior to the market downturn in Q4 2008
Avoiding long term period commitment at depressed freight rates
Securing high fleet utilisation, healthy cash flows and profitability
Minimising counterparty risk by entering into contracts with well-established and reputable Charterers with whom repeat business is often secured
Solid Financial Performance
Strong balance sheet, moderate leverage, healthy cash generation from operating activities
Well-positioned to take advantage of market acquisition opportunities as they arise
Strategic Fleet Renewal & Expansion
Fleet renewal through combination of timely disposals of older units and investments in modern tonnage
Maintaining a modern and versatile fleet – newbuilding orders for delivery Q1 2013 with secured financing and no further financial commitments until delivery
Hellenic’s Fleet
Operating Fleet
Vessel Type Dwt Built Shipyard Flag
M/V Hellenic Wind Panamax 73,981 1997 Tsuneishi, Japan Liberia
M/V Hellenic Sky Panamax 68,591 1994 Sasebo Heavy Industries, Japan Malta
M/V Hellenic Sea Panamax 65,434 1991 Jiangnan, China Malta
M/V Konstantinos D Supramax 50,326 2000 Mitsui, Japan Liberia
M/V Hellenic Horizon Handymax 44,809 1995 Halla Engineering, Korea Greece
Vessels on Order
Vessel Type Dwt Scheduled Delivery(1) Shipyard
TBN Kamsarmax 82,000 January 2013 Zhejiang Ouhua Shipbuilding Co. Ltd, China
TBN Kamsarmax 82,000 March 2013 Zhejiang Ouhua Shipbuilding Co. Ltd, China
(1) As per shipbuilding contract.
5
Income Statement Highlights
Operational Information 1H 2011 1H 2010 1H 2011
vs. 1H 2010
Average number of operating vessels in fleet 5.0 6.0 - 16.7%
Total fleet ownership days(3) 905 1,086 - 16.7%
Total fleet available days(4) 874 1,026 - 14.8%
Total fleet operating days(5) 867 1,016 - 14.7%
Fleet Utilisation (6) 99.2% 99.0% 0%
Average TCE (US$’000)(7) 21,397 26,589 - 19.5%
Income Statement 1H 2011 1H 2010 1H 2011
vs. 1H 2010
Key Financials US$ million
Revenues 20.8 30.6 - 31.9%
EBITDA(8) 12.2 20.2 - 39.5%
Net Income 3.1 10.0 - 69.3%
EPS (basic and diluted) (US$) 0.07 0.22 - 68.2%
(1) Net debt is defined as total interest bearing bank debt (net of unamortised arrangement fees) less cash and cash equivalents less
restricted cash.
(2) Net debt / book capitalisation is defined as net debt divided by the sum of net debt and total equity.
(3) Ownership days are cumulative days in a period during which each vessel is owned by the respective vessel owning company.
(4) Available days are ownership days less the days that the vessels are at scheduled off-hire for maintenance or vessel repositioning.
(5) Operating days are available days less all unforeseen off-hires.
(6) Fleet utilisation is measured by dividing the vessels’ operating days by the vessels’ available days.
(7) TCE is defined as vessels’ total revenues less voyage expenses divided by the number of available days during the period.
(8) EBITDA is calculated as revenue plus other income less commissions, operating expenses, management fees and general and
administrative expenses.
Period Ended 30/06/2011 31/12/2010
Key Financials US$ million
Vessels 139.7 146.5
Vessels under construction 28.2 27.4
Total Assets 226.8 241.7
Interest bearing bank debt (net of unamortised arrangement fees)
94.5 105.3
Net debt(1) 45.4 45.3
Total equity 125.2 125.6
Total bank debt / Total assets (Book value) 41.6% 43.6%
Net debt / Book capitalisation(2) 26.6% 26.5%
6
7
The Dry Bulk Market Outlook
Dry Bulk Market Outlook
Baltic Indices
0
5,000
10,000
15,000
20,000
02/0
1/07
02/0
5/07
02/0
9/07
02/0
1/08
02/0
5/08
02/0
9/08
02/0
1/09
02/0
5/09
02/0
9/09
02/0
1/10
02/0
5/10
02/0
9/10
02/0
1/11
02/0
5/11
02/0
9/11
BCI BPI
BSI BHSI
Baltic Dry Index
0
2,000
4,000
6,000
8,000
10,000
12,000
02/0
1/2
007
02/0
4/2
007
02/0
7/2
007
02/1
0/2
007
02/0
1/2
008
02/0
4/2
008
02/0
7/2
008
02/1
0/2
008
02/0
1/2
009
02/0
4/2
009
02/0
7/2
009
02/1
0/2
009
02/0
1/2
010
02/0
4/2
010
02/0
7/2
010
02/1
0/2
010
02/0
1/2
011
02/0
4/2
011
02/0
7/2
011
Snapshot of freight market
BDI averaged 1,409 points from 04.01.2011 to 21.09.2011 – a decrease of around
50% year-on-year
High of 1,927 on 14.09.2011 (4,209 on 26.05.2010)
Low of 1,043 on 04.02.2011 (1,700 on 15.07.2010)
In comparison, Hellenic in H1 2011 outperformed the BDI - Average TCE decreased
from US$ 26,589 in H1 2010 to US$ 21,397 in H1 2011 (19.5% decrease)
H1 2011 Panamax and Handymax earnings decreased approximately 50% and 41% (to average TCE rates of US$14,255 and US$ 14,258
respectively) whereas the Capesize sector dropped by 79% (to an average of US$ 7,730)
H2 2011 has shown a rebound in the Cape market with average TC earnings rising to US$16,635, currently outperforming the Panamax
and Handymax sectors
Source: Clarksons Research Services
8
9
About 62.5mdwt new tonnage delivered during first 8
months of 2011 (2010 – 8months: 50.5mdwt)
2.6mdwt conversions during first 8 months of 2011
(2010 – 8 months: 2.7mdwt)
16.9mdwt scrapped during first 8 months of 2011
(2010 – 8 months: 4.2mdwt)
12 – 13% estimated net fleet growth for full year 2011
taking into account expected slippage of new building
deliveries (2010: 16% net fleet growth)
Dry Bulk Fleet Deliveries & Deletions
0
10
20
30
40
50
60
70
80
Handysize Handymax Panamax Capesize Total
(md
wt)
NB Deliveries 2011 Deletions 2011
NB Deliveries 2010 Deletions 2010
Dry Bulk Supply
Dry Bulk Fleet Outlook
Source: SSY
Dry bulk fleet net growth of almost 9% for the fist 8 months of 2011 (2010 – 8 months 10.7%)
Dry Bulk Fleet Outlook
Orderbook (as per end August 2011)
0
20
40
60
80
100
120
2011 2012 2013 2014 2015+
(md
wt)
Handysize Handymax
Panamax Capesize
The Orderbook
As at end August 2011 the orderbook stood at a total of
215mdwt, representing about 37% of the current fleet,
scheduled for delivery until 2015
About 18% (104mdwt) of the current fleet is above 20 years
old
59.2mdwt scheduled for delivery during rest of 2011 (about
62.5mdwt already delivered in 2011)
Actual deliveries will continue to be distorted by the effects of
slippage, anticipated at 35% for full year 2011 (2010: about
32%)
2012 will also be a “heavy” year from the supply side point of
view - 114.9mdwt scheduled for delivery 2012
Deliveries start easing off significantly from 2013 – that is when
we are expecting delivery of the two newbuilding
Kamsarmaxes
33mdwt scheduled for delivery 2013 and 7.6mdwt for 2014
0.4mdwt scheduled for 2015 onwards
10
Source: SSY, Clarksons Research Services
Dry Bulk Fleet Age Profile
10 - 14 years
13%5 - 9 years
16%
0 - 4 years
40%
20+ years
18% 15 - 19 years
12%
Dry Bulk Demand Overview
Source: Clarkson Research Services, September 2011
11
Demand Remains Robust
Dry Bulk Trade
0
200
400
600
800
1000
1200
Iron Ore Thermal Coal Coking Coal Grains Steel Products Other Minor Bulks
Millio
n T
on
nes
2008 2009
2010 2011F
Seaborne trade is expected to grow by about 4% to reach 3.6 billion tonnes in 2011 compared to a 12% growth in 2010
We note that the 2010 growth followed a contraction of 3% in 2009 resulting from the financial meltdown in Q4 2008
Iron ore trade expected to grow by 6% to 1,056 million tonnes (2010: 995 million tonnes)
Steel products trade expected to grow by 5% to 276 million tonnes (2010: 261 million tonnes)
Thermal coal trade expected to grow by 4% to 686 million tonnes (2010: 662 million tonnes)
Coking coal trade expected to remain stable at 236 million tonnes (2010: 237 million tonnes)
Grain trade expected to grow by 1% to 344 million tonnes (2010: 341 million tonnes)
Other minor bulk trade expected to grow by 4% to 908 million tonnes (2010: 870 million tonnes)
Demand Considerations
-5.00
-3.00
-1.00
1.00
3.00
5.00
7.00
9.00
11.00
(%)
P.R. China India Indonesia USA UK France Germany
GDP2008
2009
2010E
2011F
2012F
Developing countries are showing resilience and continuing to grow at impressive rates
Dry bulk shipping is driven by demand for raw materials, therefore the continuing crisis in the Western world has not to date had an
impact on dry bulk demand, since raw materials continue to be imported into the developing countries
By the end of 2010 China had a total urban population of about 666 million or 50% of the total population. Per capita steel consumption
in China is expected to grow another 27% over the next decade amid continuing urbanization
Demand Considerations
Sources: Clarkson Research Services, Kitco, RS Platou
12
China steel production up 11% y-o-y China iron ore imports up 10% y-o-y Indonesia thermal coal exports up 7% y-o-y
S. Korea steel production up 20% y-o-y S. Korea iron ore imports up 20% y-o-y S. Korea coking coal imports up 26% y-o-y
India steel production up 9% y-o-y India Iron ore imports up 9% y-o-y India thermal coal imports up 20% y-o-y
Market Considerations
The main problem in dry bulk shipping today is oversupply and the significant orderbook until 2013. However, we must not
forget that 18% of the dry bulk fleet is over 20 years of age (in comparison only 5% of total tanker fleet and 6% of the
container fleet are over 20 years of age)
Strong demand is what differentiates dry bulk market from the tanker and the container shipping sectors - these markets
continue to depend primarily on consumption in the mature economies - this is why they have remained subdued (with the
exception of brief interruptions) since 2008
If the freight market continues to remain depressed and scrap prices maintain their strength, we anticipate increased
scrapping going forward and softening of the effects of supply after 2013
Assuming demand remains robust, scrapping continues at an increased pace and not many new orders are placed due to
poor sentiment and lack of finance - there is light at the end of the tunnel
Current valuations of dry bulk shipping stocks are very low and are not factoring in prospects of revival – this may be a
good time to step in and acquire cheap stocks
Market Considerations
13
Conclusion
Strategy going forward
Dry Bulk Sector:
Challenges and Opportunities
Current market environment remains depressed, despite recent upward trend, due to the problem of oversupply
Demand is consistently strong, irrespective of seasonal volatility, led by growth in emerging nations
Long-term outlook is positive but near-term the market will continue to experience the effects of oversupply
Strategy and Goals
In this challenging market we aim to:
Continue servicing our clients efficiently and secure uninterrupted trading for our vessels
Maintain high standards of operations giving us a competitive advantage within our peer group
Utilise our strong balance sheet and cash reserves in order to navigate through continued challenging market conditions
Take advantage of price correction in order to modernise and expand the fleet
14
15
Thank you
Organizational Chart
16
Audit Committee Charlotte Stratos – Chairman
Graham Roberts
Dimos Kapouniaridis
Board of Directors Graham Roberts – Non-executive Chairman
Fotini Karamanli – Chief Executive Officer
Elpida Kyriakopoulou – Chief Financial Officer
Charlotte Stratos – Non-executive Director
Dimos Kapouniaridis – Non-executive Director
Remuneration Committee Dimos Kapouniaridis – Chairman
Graham Roberts
Charlotte Stratos
Nomination Committee Graham Roberts – Chairman
Fotini Karamanli
Dimos Kapouniaridis
17
Non-executive Directors
Name Age Position Experience
Graham Roberts 60 Chairman and
Non-executive Director
Previously Chief Executive Officer of PD Ports plc (2002 – 2006), where he directed its flotation on AIM in
2004 and subsequent sale to Babcock & Brown Infrastructure Ltd in 2005
Previously Chief Executive Officer of London Luton Airport, MTL Ltd and Servisair plc
Held Senior Executive positions at NFC plc (later renamed Exel plc) and was a member of the Board of
Directors from 1989 to 1997
Currently Non-executive Director of Freight Transport Association Limited
Charlotte Stratos 56 Non-executive Director
Managing Director and Head of Global Greek Shipping of the representative office of CALYON Corporate
and Investment Bank in Greece (1987 - 2007)
Established the Representative Office in Greece of Banque Indosuez (1987)
From 1976 until 1986, she held various positions in London and New York with Bankers Trust Company
(now Deutsche Bank)
Member of the Board of Gyroscopic Fund, a fund of hedge funds
Currently a Senior Advisor to Morgan Stanley’s investment Banking Division – Global Transportation
Team
Dimos Kapouniaridis 38 Non-executive Director
Currently a Director and Co-Head of M&A at Eurobank EFG Equities in Athens
Previously held positions at Dresdner Kleinwort Benson and Salomon Smith Barney
BA in Economics from Hamilton College, New York
18
Contacts
Company
Hellenic Carriers Limited
Tel : +30 210 455 8900 Fax: +30 210 455 8829 [email protected]
Management
Fotini Karamanli
Chief Executive Officer [email protected]
Elpida Kyriakopoulou
Chief Financial Officer [email protected]
Investor Relations
Capital Link
Annie Evangeli – London, Tel: +44 (0) 20 3206 1322 Nicolas Bornozis – New York, Tel: +1 212 661 7566 [email protected]