SSA Shipping Conference 2013 - Global Maritime Hub...CMA CGM Italia Marittima (Evergreen Group)...

SSA Shipping Conference 2013

Growth opportunities for ASEAN Shipowners

amidst global market uncertainties 26th September 2013

| SSA Shipping Conference & Exhibition 2013

Disclaimer

This presentation is not and does not constitute or form part of, and is not made in connection with, any offer, invitation or

recommendation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any units of Rickmers Maritime and

neither this presentation nor anything contained in it shall form the basis of, or be relied upon in connection with, any contract or

investment decision.

This presentation does not constitute an offer or invitation in any jurisdiction where, or to any person to whom, such an offer or

invitation would be unlawful.

Reliance should not be placed on the information or opinions contained in this presentation. This presentation does not take into

consideration the investment objectives, financial situation or particular needs of any particular investor. Any decision to purchase

or subscribe for the Units must be made solely on the basis of your own judgment, if necessary, after seeking appropriate

financial and professional advice.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the

information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, Rickmers Trust

Management Pte. Ltd. (the “Trustee-Manager”) and its officers, directors, employees and agents disclaim any liability (including,

without limitation, any liability arising from fault or negligence) for any loss arising from any use of this presentation or its contents

or otherwise arising in connection with it.

The forward-looking statements set out in this presentation are based on a number of assumptions that are subject to business,

economic and competitive uncertainties and contingencies, with respect to future business decisions, which are subject to change

and in many cases outside the control of Rickmers Maritime and the Trustee-Manager. Accordingly, neither Rickmers Maritime

nor the Trustee-Manager can give any assurance that any forward-looking statement contained in this presentation will be

achieved. Neither Rickmers Maritime nor the Trustee-Manager intends to update any of the forward-looking statements after the

date of this presentation to conform those statements to actual results.

This presentation may not be copied or otherwise reproduced without the prior written consent of the Trustee-Manager.


About Rickmers Maritime

ASEAN Opportunities


Changing Winds

Before 2008 Today Future Expectation

Capacities Excessive demand Excessive supply Tendency towards equilibrium with

excess demand

Charter and

Freight Rates High price level

Significantly deceasing prices,

stabilization on low level Tendency towards increasing prices

Financing High financing willingness

(Banks / LP models) Slump in financing market

Increasing financing options including

Asian capital sources

Efficiency Lower bunker prices / Low

pressure to act

High bunker prices / High

pressure to act to modernize

existing fleets

Uncertainty over bunker prices /

strategic focus on energy efficiency

Newbuildings Over-utilisation of the

shipyards/ Standardised ship

specifications

Under-utilization of the

shipyards / Individualized ship

specifications

Potentially more stable shipyard

capacity utilization / New generation

of energy-efficient ship specifications

Competition High number of market

participants Market consolidation Completed market consolidation

Vessel Prices Vessel prices at a high level Declining vessel prices with

current historical low points

Tendency towards increasing vessel

prices


Outlook

Container Demand 1980-2014

Source: Clarkson Research Services

Long-term fundamentals of container shipping

remains strong

Container shipping tracks world GDP growth

Globalisation has resulted in the separation of

consumption and production locations

Container shipping is still the most efficient means of

transporting consumer goods across long distances

Outsourcing trend to continue

Tonnage outsourcing trend to continue as vessel

ownership is capital intensive and liner companies look to

charter owners to supply required capacity

Traditionally small size tonnage was chartered in as

opposed to large tonnage which was typically owned. Is

this changing? If so, then outsourcing trend could well

accelerate

15%

>50%


Outlook

Source: Maersk Broker KS


Developing Intra-Asia Market

Source: Alphaliner

World’s largest container trade: Intra-Asia

ASEAN alone is forecast to attain economic

growth rates of 5.5% in 2013 and 5.7% in

2014(1)

27% of global container fleet is deployed in

intra-Asia trade => near in 1,500 ships

Size of vessels deployed is increasing rapidly

Average size: >1,350 TEU

Largest size: 5,500 TEU

Ongoing fleet upsizing to

cater for growing inter-regional

trade

(1) IMF's World Economic Outlook report published in January 2013


Developing Intra-Asia Market

Source: Alphaliner

World’s largest container trade: Intra-Asia

Seven of Top-10 operators of ships between

500 – 3,000 TEU are Asia-based with strong

intra-Asia presence.

Tonnage suppliers in this size segment have

typically been funded by the now defunct

German KG financing.

Asia-based tonnage providers are well

positioned to expand relationship with regional

operators by offering suitable tonnage at

competitive prices during the ongoing

transformation period.

Carrier Ships

500-3000 TEU

% Chartered

Maersk/MCC/Saf 346 83%

CMA/CGM 238 88%

MSC 195 69%

PIL 106 33%

Evergreen 78 56%

Wan Hai 61 20%

SITC 55 71%

COSCO 55 24%

CSCL 54 54%

RCL 36 14%

GSL 36 89%

TS Line 32 94%

Ships 500 – 3,000 TEU


Developing ASEAN shipowners

Regional Capital Markets

Rapidly developing Asian capital markets

and tax structures

Shanghai / Shenzhen free trade

zones?

Asian lenders are comfortable with Asian

credits (1)

Singapore

Asia’s Shipping hub

Financial hub

Established exchange for listings and

various transactions

Political stability and strong infrastructure

Launched shipping trust structure in 2006

Strong alternative for defunct KG-

model

These translate to

Opportunities for ASEAN

Shipowners

Attractive Entry Point

Second-hand prices near historical low

Forced sales

Low newbuilding prices

Export financing available

Financing available / low LIBOR


Invest now?

Current Point of Cycle

It is hard to imagine achieving an undesirable

ROI on a vessel acquisition today - unless

you pick the wrong ship!

BEWARE OF PITFALLS!

Three Baskets of Ships

Future Preferred - eco tonnage which can be contracted at near all-time low prices and

provide the lowest operating cost for the liner company.

Future Proof - existing modern ships designed for high speed but which through a

combination of ultra-slow-steaming and retrofitting to achieve significant fuel savings

No Future - ships typically of older age, with overpowered main engines which are incapable of

performing ultra-slow steaming and/or have been ill maintained beyond the point of no return

due to little or no cash flow over an extended period of time.


Channeling of Funds

1st Priority

2nd Priority

Invest in secondhand tonnage which can

be retrofitted and made ‘future proof’

Invest in eco-newbuildings (‘future

preferred’ tonnage)

Avoid any “no future” vessels

‘Future proof’ existing fleet best possible

Compare existing fleet against new

eco designs and assess if there is an

investment case.

Divest vessels that cannot be made ‘future

proof’

ASEAN Opportunities

Resilient Business Model About Rickmers Maritime


About Rickmers Maritime

Description

Singapore Business Trust formed to own

and operate a containership chartering

business

Listed on SGX Mainboard on 4 May 2007 in

Singapore Dollar (S$)

Financial Performance FY2012

Total Revenue – US$144 million

Total Cash Flow from Operating Activities –

US$109 million

Total Net Profit – US$28 million

Distribution and Payout Ratio

Distribution payout for FY2012 and 1H2013:

US$0.024 per unit and US$0.012 per unit

respectively

1H2013 payout ratio:

16% of cash flow available for distribution

before payment to debt capital providers

Market Cap (1)

33.1%

Key Unitholder (2)

Capital Group

(1) As of 2 September 2013 (US$1=S$1.28)

(2) Latest available information

Rickmers Group’s Interest

S$237 million (US$185 million)

Listing Information


Successful Rights Issue

Raising funds

Successful 1-for-1 Rights Issue in May

2013, raising S$101.7 million (US$80.7

million)

Valid acceptances and excess applications

led to a subscription rate of approximately

1.5x

Use of proceeds

To repay bank loans in return for: 1.5 year VTL Waiver extension (until 29 Dec 2014)

Retaining margin of 175bps above 3-months LIBOR

Improved gearing leads to Investor

confidence

Improved cash balance

Achieving stability in a

time of market uncertainty


16 Modern Containerships Time

Chartered to Leading Liner Companies

IPO 4 May 2007

Jun 2007 Sep 2007 Dec 2007 Mar 2008 Jun 2008 Dec 2008 Mar 2009

MOL Delight 4,250 TEU

Key: Vessel Charterer

CMA CGM

Italia Marittima (Evergreen Group)

Mitsui O.S.K. Lines

Hanjin Shipping

Mediterranean Shipping Co

Sep 2008

Kaethe C. Rickmers

5,060 TEU

ANL Warringa

4,250 TEU

ANL Windarra

4,250 TEU

ANL Warrain

4,250 TEU

CMA CGM Azure

4,250 TEU

CMA CGM Onyx

4,250 TEU

Ital Fastosa

3,450 TEU

Ital Festosa

3,450 TEU

Ital Fiducia

3,450 TEU

MOL Dominance

4,250 TEU

MOL Dedication

4,250 TEU

MOL Destiny 4,250 TEU

MOL Devotion 4,250 TEU

Hanjin Newport 4,250 TEU

CMA CGM jade

4,250 TEU


Vessels on Charter

6 x 4,250 TEU

containerships (25,500 TEU)

3 x 3,450 TEU


1 x 4,250 TEU

containership

1 x 5,060 TEU

containership

5 x 4,250 TEU


Average Remaining

Charter Period (1)

1.8 years

0.9 years

2.8 years

0.6 year

5.2 years

Vessel Routes

Europe – Australia

Far East- West

Africa

Asia – East Coast

South America

Far East – US East

Coast

Europe – US East

Coast

Asia – S. America

N. Asia – S. Asia

Transatlantic

Description of

Charterers

3rd largest

container liner

company in the

world(2)

Operates more than

400 container

vessels totalling

more than 1,500,000

TEU

Part of Evergreen

Group - 4th largest

container liner co.

in the world(2)

Operates more

than 200 container

vessels totalling

more than 800,000

TEU

8th largest

container liner

company in the

world(2)

Operates more than

100 container

vessels totalling

more than 600,000

TEU

2nd largest

container liner

company in the

world(2)

Operates more than

450 container

vessels totalling

more than 2,300,000

TEU

10th largest

container liner

company in the

world(2)

Operates more

than 100 container

vessels totalling

more than 500,000

TEU

Reputable Counterparties

Rickmers Maritime’s charterers are among the largest and most experienced names in the

global container shipping industry

(1) As at 30 June 2013; (2) In terms of tonnage operated based on Alphaliner TOP100, September 2013

http://www.hanjin.com/en/main.jsp


Revenue Visibility and Stability from

Long-Term Charters

As at 30 June 2013:

Average age of vessels: 5.8 years

Average remaining charter period: 2.7 years

Remaining committed revenue: US$407.5 million

Name TEU Charterparty Net Daily Charter Hire

2013 2014 2015 2016 2017 2018 2019 2020

Kaethe C. Rickmers 5,060 MSC US$5,700 (until 24 Sep 2013) / US$6,650 (until Mar 2014)

Ital Fastosa 3,450 Italia Marittima US$25,870

Ital Festosa 3,450 Italia Marittima US$25,870

ANL Warringa 4,250 CMA CGM US$25,000

ANL Windarra 4,250 CMA CGM US$25,000

Ital Fiducia 3,450 Italia Marittima US$25,870

CMA CGM Azure 4,250 CMA CGM US$25,000

ANL Warrain 4,250 CMA CGM US$25,000

CMA CGM Jade 4,250 CMA CGM US$27,000

CMA CGM Onyx 4,250 CMA CGM US$27,000

Hanjin Newport 4,250 Hanjin US$25,950

MOL Dominance 4,250 MOL US$26,850

MOL Dedication 4,250 MOL US$26,850

MOL Delight 4,250 MOL US$26,850

MOL Destiny 4,250 MOL US$26,850

MOL Devotion 4,250 MOL US$26,850

Firm Time Charter Period Expiration Period


Fleet Performance

* Excluding positioning and scheduled dry-docking

FY2008 FY2009 FY2010 FY2011 FY2012 1H2013

Number of Vessels 13 16 16 16 16 16

Vessel Ownership Days 4,003 5,662 5,840 5,840 5,856 2,896

Off-Hire Days* 8.5 7.9 6.9 5.6 67.0 9.9

Fleet Utilisation 99.8% 99.9% 99.9% 99.9% 98.9% 99.7%


Ensuring Our Fleet is ‘Future Proof’ Constant Focus On Fuel Optimisation

Completed

Ultra-slow-steaming – Rickmers Maritime

were among the first tonnage providers

globally allowing ultra-slow-steaming of its

vessels

Turbo charter cut out - Successfully

implemented turbo charger cut out on

selected vessels

Propeller boss cap fins - Installed

PBCF’s on selected vessels

High performance paint – Applied high

performance paint on selected vessels


Ongoing

Hull and propeller optimisation - Ongoing

project aimed at reducing energy efficiency loss

by replacing bulbous bow, propeller and anti-

fouling coatings. Tank test for 4,250 TEU

completed with convincing results

Trim stability and voyage optimisation - Joint

project with ABB in the development and trial

testing of their bespoke EMMA system

Variable pump and fan speeds – Replacing

pumps and engine room fans with variable speed

units on selected vessels

Crew training – Ongoing training of vessel crew

in energy management

Energy efficiency fuels competitiveness

Ensuring Our Fleet is ‘Future Proof’ Constant Focus On Fuel Optimisation

Thank You

For more information, please visit

www.rickmers-maritime.com

SSA Shipping Conference 2013 - Global Maritime Hub...CMA CGM Italia Marittima (Evergreen Group)...

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