Great Eastern Shipping Co. Ltd. — Investor Presentation 2021

Oct 29, 2021

Our Ref.: S/2021/JMT October 29, 2021

Mumbai – 400 001 Mumbai – 400 051

BSE Limited National Stock Exchange of India Limited 1st Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, Bandra Kurla Complex, Bandra (East),

Dear Sir,

Further to our letter dated October 29, 2021 we enclose herewith Investor Presentation pertaining to the Financial Results for the quarter and half year ended September 30, 2021.

You are requested to take note of the above.

Thanking You, Yours faithfully, For The Great Eastern Shipping Co. Ltd.

Jayesh M. Trivedi President (Secl. & Legal) & Company Secretary Email Id : jayesh_trivedi@greatship.com

Except for historical information, the statements made in this presentation constitute forward looking statements. These include statements regarding the intent, belief or current expectations of GE Shipping and its management regarding the Company's operations, strategic directions, prospects and future results which in turn involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward looking statements; including changes in freight rates; global economic and business conditions; effects of competition and technological developments; changes in laws and regulations; difficulties in achieving cost savings; currency, fuel price and interest rate fluctuations etc. The Company assumes no responsibility with regard to publicly amending, modifying or revising the statements based on any subsequent developments, information or events that may occur.

FINANCIAL YEAR Q2FY22

29 October 2021

REPORTED FINANCIAL

HIGHLIGHTS

	REPORTED FINANCIAL
HIGHLIGHTS
	GE Shipping Q2FY22 consolidated Net Profit at Rs.		223 Crores
	Declared an interim dividend of Rs. 4.50 per share Standalone		Key Figures		Consolidated
Q2FY22	Q2FY21	H1FY22	(Amount in Rs. Crs)	Q2FY22	Q2FY21	H1FY22
			Income Statement
788	622	1,467	Revenue (including other income)	953	800	1,769
461	377	754	EBITDA (including other income)	501	435	783
273	216	373	Net Profit	223	225	235
			Balance Sheet
10,845	1,0469	10,845	Total Assets	13,947	14,089	13,947
		6,356	Equity	7,838	7,425	7,838
6,356	5,700					4,794
3,550	3,501	3,550	Total Debt (Gross)	4,794	5,015
544	521	544	Long Term Debt (Net of Cash)	976	971	976
			Cash Flow
294 39	347 (90)	524 (138)	From operating activities From investing activities	351	352	587
(254)	(70)	(540)	From financing activities	5 (318)	(99) (165)	(237) (654)

NORMALIZED FINANCIAL

HIGHLIGHTS

Declared an interim dividend of Rs. 4.50 per share

	NORMALIZED FINANCIAL
HIGHLIGHTS
		GE Shipping Q2FY22 consolidated Net Profit at Rs.	217 Crores
		Declared an interim dividend of Rs. 4.50 per share
	Standalone				Consolidated
Q2FY22	Q2FY21	H1FY22	Key Figures (Amount in Rs. Crs)	Q2FY22	Q2FY21	H1FY22
			Income Statement
788	622	1467	Revenue (including other income)	953	800	1769
413	307	700	EBITDA (including other income)	453	376	759
249	149	383	Net Profit	217	134	303
			Balance Sheet
10,845	10,469	10,845	Total Assets	13,947	14,089	13,947
6,356	5,700	6,356	Equity	7,838	7,425	7,838
3,910	4,039	3,910	Total Debt (Gross)	5,153	5,553	5,153

NORMALIZED FINANCIAL NOTES

1) The impact of the exchange rate on foreign currency loans and current assets and liabilities, including cash and bank balances, has been removed

2) NCD & Currency Swap:

• Funds raised through NCDs have been swapped into USD using INR-FCY swaps, thus creating synthetic fixed rate USD loans.
• The MTM change of these swaps impacts the reported numbers.
• Normalized numbers are worked out after making necessary adjustments to reported numbers to reflect the effective cost of the synthetic USD loans.

NORMALIZED FINANCIAL HIGHLIGHTS

	NORMALIZED FINANCIAL
	Standalone		Key Figures		Consolidated
Q2FY22	Q2FY21	H1FY22		Q2FY22	Q2FY21	H1FY22
			Key financial figures
15.87%	10.62%	12.31%	*Return on Equity (ROE) (%)	11.16%	7.31%	7.79%
11.17%	7.83%	8.86%	*Return on Capital Employed (ROCE) (%)	8.23%	5.91%	6.15%
0.62	0.71	0.62	Gross Debt/Equity (x)	0.66	0.75	0.66
	0.19	0.14	Net Debt/Equity (x)	0.17	0.20	0.17
0.14	10.11	26.07	Earnings per share, EPS (INR/Share)	14.79	9.12	20.59
16.96		41.90	Cash Profit per share (INR/Share)	27.84	20.98	45.85
24.96	17.50			4.50	-	4.50
4.50	-	4.50	Dividend per share(INR/Share)

PROFIT & LOSS STATEMENT

INDUSTRY FORMAT

PERFORMANCE REVIEW

Break up of Revenue days	(Shipping)
Revenue Days		Q2 FY22		Q2 FY21
Owned Tonnage		4,028		4,007
Inchartered Tonnage		-		9
Total Revenue Days		4,028		4,016
Total Owned Tonnage (mn.dwt)		3.57		3.70
Break up of Revenue days (Offshore)
Revenue Days		Q2 FY22		Q2 FY21
Offshore Logistics		1,227		1,706
Drilling Services		275		351
Total		1,502		2,057
Average TCYs earned over	last few	quarters in various	(Shipping)	categories
Average (TCY \$ per day)	Q2 FY22	Q1 FY22	Q-o-Q Change	Q2 FY21	Y-o-Y Change
Crude Carriers	10,515	8,779	20%	25,233	-58%
Product Carriers	8,198	10,518	-22%	10,874	-25%
	28,789	26,514	9%	29,238	-2%

Break up of Revenue days (Offshore)

Revenue Days	Q2 FY22	Q2 FY21
Offshore Logistics	1,227	1,706
Drilling Services	275	351
Total	1,502	2,057

Crude Carriers	10,515	8,779	20%	25,233	-58%
Product Carriers	8,198	10,518	-22%	10,874	-25%
LPG Carriers	28,789	26,514	9%	29,238	-2%
Dry Bulk	30,117	24,238	24%	11,248	168%

REVENUE VISIBILITY & COVERAGE

Category Extent of coverage of fleet's operating days Revenue Visibility Crude Carriers 10% Rs 382 Cr Product Carriers 18% LPG Carriers 86% Dry Bulk 28% Jackup Rigs 96% AHTSV 91% Category-wise coverage of operating days (Shipping) --- FY22 Category-wise coverage of operating days (Offshore) --- FY22

	operating days	Revenue Visibility
		Rs 382 Cr
Category	Extent of coverage of fleet's operating days	Revenue Visibility
Jackup Rigs	96%
AHTSV	91%
MPSVV	33%	Rs 334 Cr

GESCO STANDALONE DEBT REPAYMENT SCHEDULE (NEXT 5 YEARS)

FLEET PROFILE

	SHIPPING
Fleet	DWT (FY21)	Fleet (29th	Oct 21)	Committed
		No:	Avg Age	Capex/Sale
Crude Carriers	1,058,499	8	13.69
Product Carriers	1,092,465	18	13.63
Gas Carriers	212,260	5	17.02	NIL
Dry Bulk Carriers	1,210,805	14	8.55
Total	3,574,029	45	12.13
		OFFSHORE
	Fleet		Number of Units	Average Age (Yrs.)
	Jack Up Rigs		4	10.06
	Platform Supply Vessels Anchor handling Tug Cum Supply Vessels		4 8	12.23 11.69
	Multipurpose Platform Supply & Support Vessels		2	11.54
	ROV Support Vessels		5	10.25	12

MARKET

Crude and Product Tankers

Crude and Product Tankers

• Freight rates continue to hover around operating costs While demand for all other core products has returned close to pre-pandemic levels, Jet demand is ~2.7 mbpd (33%) lower than pre-pandemic levels (Sep-19) as air-traffic remains impacted due to Covid.
• Refinery runs and crude trade remain 4% and 9% below pre-covid levels while product trade is close to pre-pandemic levels.
• Significant supply growth (Crude Tankers: 3% y/y and Product Tankers: 2% y/y) from new buildings
• OPEC+ has released a schedule to increase crude production which is yet to impact the market: Reaching pre covid levels by September 2022

DRY BULK MARKET

Dry Bulk

Spot rates reached highs not seen since the super cycle

				Spot rates reached highs not seen since
			the super cycle
	\$/day	FY21	FY22	% change
H1		15,130	36,830	143%

Dry Bulk

• Trade growth of approx. 5.5% YoY in Jan-Sep 21
• Covid related congestion in Asia, and weather disruptions tightened tonnage supply. Congestion in Q3 Cal 21 @ 5% of the fleet was highest since Q4 2011.
• World energy shortage led to surging coal prices. Global coal trade was strongly supported by coal shortage in China & India. High electricity demand amidst low domestic supply and urgency to build low inventories before winter supported trade. In accordance with Chinese Govt's mandate to achieve flat steel production in 2021,
• production cuts intensified in Q3 21.

LPG MARKET

Gas

S/day	FY21	FY22	% change
H1	36,864	29,308	$-20%$

Sources: Industry Reports

• VLGC earnings averaged US \$ 23,000 / day during the quarter down 44 % YoY. Earnings were down 35 % from Q1 FY 2022 as well.
• Global VLGC trade grew by ~ 5 % YoY during the quarter mainly led by US export growth.
• VLGC fleet grew by 6 % YoY during the quarter. On a qoq basis, effective VLGC supply increased as high number of vessels in dry dock during the previous quarter were released back in to service.

Fleet Supply

One of the Lowest Order Book to Fleet Ratios While ordering is picking up for Bulkers

Orderbook as % of Fleet

ASSET PRICE MOVEMENT

ASSET PRICE MOVEMENT (INDEXED)

Over the Last 5 Years

SCRAPPING

Fleet Scrapping (% of beginning world fleet) (mn Dwt) Oct 21 YTDCY21 CY2020 CY2019 CY2018 CY2017 CY2016 CY2015 CY2014 435 1.64% 0.53% 0.55% 4.39% 2.43% 0.39% 0.38% 1.75% 177 1.58% 0.57% 0.60% 1.72% 1.22% 0.54% 0.62% 1.10% 938 0.53% 1.74% 0.93% 0.54% 1.85% 3.78% 4.02% 2.24%	SCRAPPING
	Vessel
	Category
	Crude
	Product
	Dry Bulk
	While tanker scrapping has picked up, it has still been lower than expected, considering the very poor freight rates

Greatship (India) (a 100% subsidiary)

Fleet Supply Increasing number of Cold Stacked Rigs

There is a large potential for scrapping over next few years if the market continues to remain weak.

Market Trends: Utilisation

INITIATIVES ON ENVIRONMENT

• Voluntarily published our first Environment Social Governance (ESG) report
• Established a working group for feasibility study on alternate fuels and fuel optimisation technologies in view of the IMO emission reduction targets.
• After the Jan 2020 IMO mandate on switching from 3.50% Sulphur to 0.5%, there has been a drastic reduction of 83.65% of Sulphur Oxide (Sox) emissions by following a mixed strategy of using low sulphur fuel and installation of EGCS (Scrubber)
• Created an ESG profile of our company based certain ESG metric. The profile is available on our website under "SUSTAINABILITY" tab

INITIATIVES ON ENVIRONMENT

Implementation of various energy saving devices • Mewis Duct

• High Performance Paint
• Propeller Boss Cap Fins (PBCF)
• ECO Cap
• LED Lightings
• Rudder Bulb
• Pre-swirl Fins

FINANCIALS

Counter Cyclical Investments have Generated Strong Cash Flows Net CAPEX of over 400 mn USD but Net Debt has risen 10 mn USD from FY2016

* For Q2FY22 we have taken share price as on 29th October 2021

THANK YOU

visit us at www.greatship.com