CAPITAL MARKETS DAY DRY CARGO

Transcription

1 CAPITAL MARKETS DAY DRY CARGO THE PREFERRED PARTNER IN GLOBAL TRAMP SHIPPING UNIQUE PEOPLE, OPEN MINDED TEAM SPIRIT, NUMBER ONE New York City, 22 January

2 GUIDANCE AGENDA Norden Dry cargo Organization Fleet Customers Dry cargo market structure Norden Dry cargo Value Creation in closed book Dry cargo market perspectives Summary 2

3 GUIDANCE ORGANIZATION Worldwide coverage of most important dry cargo markets, in order to ensure close contact to existing as well as potential customers, and in order to have access to latest market knowledge Management & Support Functions 25% 29% Chartering Headquarters Port captains Foreign office Port captains 8% 8% Control 30% Operations Avg. annual growth +44%

4 GUIDANCE DRYCARGO FLEET Norden is active within 5 dry cargo segments, offering the highest possible flexibility to cargo clients Vessel type Size (DWT) Typical length Main cargoes Entry in segment Capesize >150, metres Iron ore 1989 Post Panamax , metres Iron ore and coal 2006 Panamax 65 90, metres Iron ore, coal grain and bauxite 2000 Edit / no cranes Handymax 40 65, metres Iron ore, coal, bauxite, cement clinker, grain, steel and fertilizer 1985 Handysize 25 40, metres Cement clinker, grain, steel, petcoke, fertilizer, salt, alumina, scrap, concentrates

5 GUIDANCE NORDEN DRY CARGO FLEET Today recognized as one of the worlds leading operators in the Panamax and the Handymax segments, with the future ambition to have the same position in the Post Panamax and the Handysize segments At 30 September 2007 Vessel type Capesize Post Panamax Panamax Handymax Handysize Total Size (dwt) >150, , , , ,000 Vessels in operation Owned vessels Chartered vessels (with purchase option) 3 11 * Chartered for at least three years Total active core fleet Other chartered vessels Total active fleet Vessels to be delivered to core fleet Newbuildings (owned) 4 12 *** 12 ** 28 Chartered vessels (with purchase option) ** 5 31 Chartered for at least three years Total for delivery to core fleet Total gross fleet * Of which 1 unit sold. ** Of which 4 units are 50% owned. *** Of which 4 units are 50% owned and 4 sold, of this 2 units 50% owned. 5

6 GUIDANCE NORDEN BULK DEPARTMENT Flexible fleet procurement, in order to protect downside and retain upside, irrespective of market developments Medium term time charter 6% Owned 4% Long term time charter incl. purchase option 17% 73% Short term time charter * As of 30 September

7 GUIDANCE CUSTOMERS NORDENs Dry cargo customers range from smaller privately owned companies to some of the worlds largest suppliers of raw materials 100% = 36 mio tons Main trading patterns coal Minerals Agricultural Grain Salt 1% 3% 3% 8% Port captains Iron Ore 16% Metals 16% Cement / cement clinker 25% Coal 27%

8 GUIDANCE CUSTOMERS NORDENs Dry cargo customers range from smaller privately owned companies to some of the worlds largest suppliers of raw materials 100% = 36 mio tons Main trading patterns cement / cement clinker Minerals Agricultural Grain Salt 1% 3% 3% 8% Port captains Iron Ore 16% Metals 16% Cement / cement clinker 25% Coal 27%

9 CUSTOMER FOCUS Customer satisfaction is generally high DRY CARGO Agree or strongly agree, % of respondents* Always ready and reachable for initial inquiry Response time is good Always clear on stand during negotiations Keeps you updated / well informed up to final nomination Provides good post fixture service Better or much better than competitors, % of respondents* Quality of service Quality of staff Responsiveness Ability to service your business needs Handling of changes Price Terms or payment deals * Based on anonymous participation of 100+ NORDEN customers (2007) 9

10 GUIDANCE AGENDA Norden Dry cargo Organization Fleet Customers Dry cargo market structure Norden Dry cargo Value creation in closed book Dry cargo market perspectives Summary 10

11 GUIDANCE DRY CARGO MARKET STRUCTURE NORDEN is benefiting from having multiple key success factors in the dual position as Owner/Operator NORDEN has first hand access to market knowledge from both supply side (Yards) and demand side (Customers) Yard Owner Operator Customer Business models YARD SHIP OWNER Key success factors Newbuilding prices Product mix Steel prices Timing of acquisitions / sales Technical management skills OPERATOR NORDEN CARGO OWNER Volatility in freight market Scale of operation Timing of acquisitions / sales Technical management skills Volatility in freight market Scale of operation Raw material prices Logistics management Freight prices 11

12 AGENDA Norden Dry cargo Organization Fleet Customers Dry cargo market structure Norden Dry cargo Value creation in closed book Dry cargo market perspectives Summary 12

13 GUIDANCE NORDEN VALUE CREATION OPTIONS AS OWNER / OPERATOR NORDEN Dry cargo NORDEN Owner NORDEN Operator Buy/sell vessels POP deals Technical management New activity Open book Closed book Several opportunities to create value from the closed book 13

14 GUIDANCE NORDEN VALUE CREATION OPTIONS IN CLOSED BOOK NORDEN Owner Buy/sell vessels POP deals NORDEN Dry cargo Technical management New activity TC OUT NORDEN Operator Open book Closed book TC IN Optionality Spread earnings Synergies Segment flexibility 14

15 COVERAGE OPTIONS Definitions TC OUT TC OUT = Time Charter Out Lease of a vessel for short or long period Income based on fixed daily price No potential upside or downside = Contract of affreightment Agreement to transport two or more identical cargoes Transport from loading to discharge port Income based on price per tonnes of freight Operational efficiencies / risk Exposure to market fluctuations Policy: All bunker expenses are hedged 15

16 VALUE CREATION OPTIONS IN CLOSED BOOK (1/4) The open book of NORDEN contains the optionality to expand in a rising market as well as to contract in a declining market Value creation options in closed book: TC IN Optionality In stronger freight markets NORDEN will be able to increase the open exposure of 2008 by 1,488 days above the minimum period* 18.2% Spread earnings Synergies Segment flexibility Upside potential Minimum exposure to market 6.3% HDY HMX 7.9% PMX 3,610 days 5,262 days 4,460 days * Based the known book as of 15 November

17 VALUE CREATION OPTIONS IN CLOSED BOOK (2/4) The volatility over time on the freight spread between different trading routes, provides opportunities for additional value creation in the closed book Value creation options in closed book: TC IN Optionality Spread earnings Synergies Segment flexibility PMX example, USD per day 100,000 90,000 80,000 70,000 60,000 50,000 40,000 Average Fronthaul Backhaul PMX example PAC ATL positional : 31 Oct 30 Nov (days) Backhaul 1,851 5,057 Fronthaul ,000 20,000 * Source: SSY, BPI 10,000 Q1 Q2 Q3 Q

18 VALUE CREATION OPTIONS IN CLOSED BOOK (3/4) NORDEN can benefit from synergies in trade patterns, on the multiple s concluded by minimizing the ballast ratio and thereby optimizing income streams Laden voyage Ballast trip Value creation options in closed book: 1 TC IN Optionality Spread earnings Synergies Segment flexibility Contract pattern example: 2 3 Ballast: Taiwan Indonesia Laden Voyage: Indonesia Thailand Ballast: Taiwan Thailand Laden voyage: Thailand West Africa synergy. Ballast leg Taiwan Thailand saved: 5 days of USD 70,000 per day Total cost saving of example: USD 350,000 18

19 VALUE CREATION OPTIONS IN CLOSED BOOK (4/4) Being active in several segments NORDEN can benefit from the rate spreads between segments, and efficiently switch cargoes based on market conditions Value creation options in closed book: TC IN Optionality Spread earnings Segment flexibility Synergies Segment flexibility USD 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 PMX HMX 10, * Source: SSY, BPI & BSI 19

20 AGENDA Norden Dry cargo Organization Fleet Customers Dry cargo market structure Norden Dry cargo Value creation in closed book Dry cargo market perspectives Summary 20

21 TONNAGE DEMAND Growth in 2007 historically high, not only due to volumes % change from previous year China coastal/off hire Congestion Distances Volumes * Source: RS Platou 21

22 AGE PROFILE OF THE DRY BULK FLEET Orderbook by expected delivery year (m. dwt) Age profile of dry bulk segments (% of total fleet) Comments CAPE 100,000 dwt % 18% 30% 23% 17% No. vessels : 760 Avg. age : 11.3 years On order in % of existing fleet: 91 % PMX 60 99,999 dwt % 27% 7% 16% 27% No. vessels : 1,472 Avg. age : 11.8 years On order in % of existing fleet: 39.9 % HMX 40 59,999 dwt % 31% 7% 17% 22% No. vessels : 1,582 Avg. age : 11.8 years On order in % of existing fleet: 44.6 % HDY 10 39,999 dwt % 11% 11% 10% 4% No. vessels : 2,827 Avg. age : 20.2 years On order in % of existing fleet: 21 % 28 Total 10 Sources : Clarkson, Arrows, Platou % 8% 17% 26% 20% No. vessels : 6,641 Avg. age : 15.3 years On order in % of existing fleet: 53.6 % 22

23 MARKET DEVELOPMENT DRY CARGO FREIGHT RATES USD CAPE PMX HMX HDY 0 JAN 2005 JAN 2006 JAN 2007 JAN 2008 SECOND HAND TONNAGE PRICE LEVELS USD million Capesize 170K 5 Years Panamax 73K Bulkcarrier 5 Years Handymax 52K DWT 3 Years Handysize 28K 30K 5 Years JAN 2005 JAN 2006 JAN 2007 JAN 2008 Source: Baltic Exchange, Clarksons 23

24 AGENDA Norden Dry cargo Organization Fleet Customers Dry cargo market structure Norden Dry cargo Value creation in closed book Dry cargo market perspectives Summary 24

25 SUMMARY HARDWARE 190 active vessels, orderbook of 75 vessels and active in all major dry cargo segments Core fleet has low average age and modern design Recognized as one of the worlds leading operators in the Panamax and the Handymax segments Future ambition to become world leader in the Post Panamax and the Handysize segments SOFTWARE Substantial value creation as owner/operator irrespective of market conditions Worldwide coverage of customers via overseas offices Strong brand, well known for reliability and quality MARKET Robust outlook for