Company Presentation
September 2017
Company Presentation September 2017 Safe Harbor Statement This - - PowerPoint PPT Presentation
Company Presentation September 2017 Safe Harbor Statement This document may contain forward- looking statements that reflects managements expectations for the future. The Private Securities Litigation Reform Act of 1995 provides safe harbor
September 2017
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This document may contain forward-looking statements that reflects management’s expectations for the future. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements 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 Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
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Youngest ECO dry bulk fleet
Industry leading balance sheet
First dry bulk company to reinstate full amortization
Compliant with future regulatory requirements
Favorable supply dynamics
tonnage
Positive demand outlook
Positive rate environment
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Scorpio Bulkers Inc. (“Scorpio” or the “Company”) owns and
time charters in two vessels
under the ticker “SALT”
Islands and is not subject to US income tax
supplier relationships as well as technical and commercial management
efficient dry bulk vessels built at quality shipyards
Scorpio Ultramax and Scorpio Kamsarmax pools
difficult operating environment
Key Facts Fleet Profile Scorpio Average Age vs. Worldwide Fleet
34 18 1 1 5 10 15 20 25 30 35 40 Ultramax Kamsarmax Owned TC/BB Chartered-In 1.7 1.5 8.0 8.5 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Handymax Panamax Scorpio Bulkers Active Fleet
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Market Cap ($m) Trading Liquidity ($m/day) Stock and Bond Price Performance
Current Shareholders
Source: Fearnley Securities September 25th, 2017
# Holder Ownership 1 Scorpio Services Holding Limited 17.9% 2 Grm Investments Ltd 17.0% 3 Evermore Global Advisors, LLC 8.4% 4 Raging Capital Management, LLC 5.5% 5 BlackRock Fund Advisors 3.2% 6 Q Investments 2.1% 7 Anchorage Capital Group, LLC 1.7% 8 Impala Asset Management, LLC 1.7% 9 Warlander Asset Management, LP 1.6% 10 Royce & Associates, LP 1.3%
$0 $2 $4 $6 $8 Star Bulk Scorpio Bulkers Golden Ocean Diana Eagle Bulk Navios Partners Genco $0 $200 $400 $600 $800 $1,000 Golden Ocean Star Bulk Scorpio Bulkers Genco Eagle Bulk Diana Navios Partners $19 $20 $21 $22 $23 $24 $25 $26 $2 $3 $4 $5 $6 $7 $8 $9 $10 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Share Price (LHS) Senior Notes (RHS)
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$3,462 $5,335 $7,083 $7,238 $8,230 $8,360 $9,005 $3,331 $5,263 $6,349 $7,401 $9,164 $9,273 $8,749 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17* Ultramax Kamsarmax
continued market recovery
* Projections based on 56% and 50% of the days for the Ultramax fleet and Kamsarmax fleet, respectively as of July 24th 2017
February 10, 2016 BDI hits 40 year low
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Operating Cash Flow EBIT Revenue EBITDA
Figures in $USD millions.
$10.2 $17.4 $23.9 $26.8 $34.7 $37.7 $0 $5 $10 $15 $20 $25 $30 $35 $40 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
$0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
$0.9 $7.0 $10.9
$0 $5 $10 $15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
$2.5
$0 $5 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
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P&L FY 2016 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Revenues 78.4 10.2 17.4 23.9 26.8 34.7 37.7 EBITDA (23.1) (17.0) (5.8) (1.3) 0.9 7.0 10.9 EBIT (78.3) (28.8) (19.2) (16.2) (14.1) (8.5) (4.7) Net Income (99.9) (33.4) (24.7) (21.3) (20.6) (16.4) (13.4) Balance Sheet FY 2016 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Total Assets 1,547.2 1,466.9 1,522.2 1,553.1 1,547.2 1,563.1 1,532.2 PP&E 1,414.1 1,183.3 1,244.8 1,318.3 1,414.1 1,363.5 1,352.5 Cash 101.7 230.2 241.7 200.9 101.7 126.6 149.3 Equity 956.6 941.5 989.0 972.7 956.6 926.0 916.2 Debt 579.5 510.0 523.4 570.8 579.5 628.2 606.3 Cash Flow FY 2016 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Cash from operations (52.2) (27.5) (18.1) (4.5) (2.1) (1.7) 2.5 Cash from investing (235.4) 22.6 (23.0) (128.5) (106.4) (22.4) (1.5) Cash from financing 189.0 34.8 97.8 47.0 9.3 49.0 (23.1)
Figures in $USD millions.
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Source: Clarksons Research Services, September 2017
2009-2017 Iron Ore Coal Grains Minor Bulks Total Dry Bulk CAGR 6.5% 4.9% 6.0% 3.9% 5.0%
Million Tonnes 3,429 3,844 4,080 4,342 4,588 4,829 4,833 4,895 5,074
2,000 3,000 4,000 5,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 (f) Iron Ore Coal Grain Minor Bulk
11 Metals & Minerals, 27.4% Coal, 19.2% Steel Products, 13.7% Grain, 13.7% Forest Products, 12.3% Iron Ore, 8.2% Argribulks, 4.1% Others, 1.4%
Kamsarmax Cargo Breakdown Ultramax Cargo Breakdown
Coal, 55.8% Grain, 18.2% Steel Products, 13.0% Metals & Minerals, 7.8% Iron Ore, 5.2%
12 $0 $200 $400 $600 $800 $1,000 $1,200 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Rotterdam Singapore Houston
consumption – ‘ECO Ships’ make a difference.
value of the vessel and
Historical FO & MGO Prices ($/MT) (1)
Source: Clarksons Research Services/Ocean Connect September, 2017
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BWTS Piping in Engine Room
without the space in the engine room to fit BWTS (see how large these BWTS are)
52 out of 52 of SALT’s vessels are fitted with BWTS
BWTS Filtering Unit
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Source: Clarksons Research Services, September 2017
Fleet Scrapping Scrapping Avg Age Fleet Age Profile
(Million DWT) 20 22 24 26 28 30 32 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD Handymax Panamax 4.6 8.2 6.1 4.2 0.4 1.0 1.8 0.5 5.6 10.6 6.6 23.3 33.4 23.2 16.4 30.7 29.3 10.5 5 10 15 20 25 30 35 40
Scrap Price ($/ldt)
32% 35% 37% 30% 46% 34% 38% 40% 12% 14% 12% 9% 4% 12% 7% 8% 6% 5% 6% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Capesize Panamax Handymax Handysize 0-4 5-9 10-14 15-19 20+
230 410 200 250 300 350 400 450 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17
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1 yr TC Rates (Last 12 months) Historical 1 Yr TC Rates
Source: Clarksons Research Services, September 2017 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Kamsarmax Ultramax 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 Kamsarmax Ultramax BDI
Historical Data 2009-2017 Class Week of Sep. 22 Avg Max Min YTD YoY Since Feb-16 Ultramax $11,000 $11,813 $24,375 $4,875 32.2% 44.9% 105.1% Kamsarmax $13,500 $12,875 $29,625 $5,363 36.2% 82.5% 123.0% BDI 1,433 1,408 3,941 307 25.9% 61.4% 272.1%
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25.3 25.2 44.6 81.3 100.3 100.4 63.0 48.2 49.3 47.2 46.5 27.6 22.5
40 60 80 100 120 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018* 2019* Capesize Panamax Handymax Handysize
(1)Does not assume slippage or scrapping (2) Assumes newbuildings deliver as scheduled, Source: Clarksons Research Services, September 2017
Fleet Development Before Scrapping (1)
(Million DWT)
Newbuilding Deliveries Per Year (2)
323.1 327.6 341.8 354.0 355.2 202.1 205.3 210.6 215.3 216.4 193.7 197.9 201.3 202.8 203.2 95.8 97.4 100.3 101.2 101.4 814.7 828.2 853.9 873.3 876.2
200 300 400 500 600 700 800 900 1,000 Current 2017 2018 2019 2020 DWT (Millions) Capesize Panamax Handymax Handysize
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$18 $20 $22 $24 $26 $28 $30 Ultramax NB Kamsarmax NB Ultramax Resale Kamsarmax Resale
Figures in million US$, Source: Clarksons Research Services, September 2017
Historical Asset Values Newbuild & Resale Asset Values Five Year Old Asset Values
– Increased 23.3% and 16.3% for ultramax and kamsarmax resales, respectively. – Increased 22.6% and 32.1% for ultramax and panamax 5 year old vessels, respectively. – Increased 3.4% and 1.0% for ultramax and kamsarmax newbuildings, respectively.
supporting expectations for continued market recovery
$0 $10 $20 $30 $40 $50 $60 Ultramax NB Kamsarmax NB Panamax NB $10 $12 $14 $16 $18 $20 $22 Ultramax 5 yr Kamsarmax 5 yr Panamax 5 yr
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Source: Clarksons Research Services, September 2017
Lowest Orderbook as % of Fleet Since 2002 Newbuilding Orders
7.62% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Aug-00 Aug-01 Aug-02 Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17
12.2 15.3 9.6 22.4 15.1 8.9 22.3 36.6 33.1 29.5 76.4 159.3 101.5 37.0 102.3 41.7 24.4 103.3 63.8 24.2 14.012.2
20 40 60 80 100 120 140 160 180 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD (Million DWT)
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Total Dry Bulk Grain Iron Ore Coal
Figures in Ton Miles (Billions), Source: Clarksons Research Services, September 2017 18,618 21,069 22,374 23,780 24,945 26,371 26,613 27,212 28,241
10,000 15,000 20,000 25,000 30,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 (f) 2,221 2,460 2,404 2,594 2,794 3,002 3,304 3,403 3,642
1,000 1,500 2,000 2,500 3,000 3,500 4,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 (f) 3,446 4,052 4,322 4,844 5,048 5,240 4,977 4,965 5,188
2,000 3,000 4,000 5,000 6,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 (f) 5,365 5,852 6,336 6,718 6,931 7,536 7,579 7,854 8,230
2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 (f)
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Coal/iron ore Iron ore/coal Iron ore/coal Handysize 10,000 – 40,000 40,000 – 60,000 60,000 – 80,000 Steel/fertilizers/forest/grains/soybeans/ alumina/coal/other minor bulks Steel/fertilizers/forest/grains/soybeans/ alumina/coal/other minor bulks Coal/grains/soybeans/bauxite
Vessel type DWT Cargo carried
Handymax/Supramax Panamax/Kamsarmax Post-Panamax Capesize VLOC 80,000 – 110,000 110,000 – 200,000 Over 200,000
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steel, along with limestone & coking coal and is the largest single commodity shipped on dry bulk vessels.
different types of coal; steam coal (which is used for electricity generation and industrial uses), and coking coal (which is the key ingredient for steel making).
(such as corn, barley, oats, and rye) and soya bean/meal.
such as phosphate rock, fertilizers, bauxite, steel products, forest products, nickel, ore, sugar, salt, and others.
Breakdown of Drybulk Cargoes Breakdown of Minor Bulks Breakdown of Major Bulks
Total Sugar 3% Total Agribulks 9% Fertiliser 8% Metals and Minerals 40% Manufactures 40%
Source: Clarksons Shipping Intelligence, September 2017
Iron Ore, 29% Coal, 23% Grains, 10% Minor Bulks, 37%
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Owned Vessels # Name Year Yard Type # Name Year Yard Type 1 SBI Athena 2015 Chengxi Ultramax 27 SBI Samson 2017 Chengxi Ultramax 2 SBI Bravo 2015 Nacks Ultramax 28 SBI Phoenix 2017 Chengxi Ultramax 3 SBI Antares 2015 Nacks Ultramax 29 SBI TBN 1 2015 Chengxi Ultramax 4 SBI Leo 2015 Dacks Ultramax 30 SBI TBN 2 2015 Chengxi Ultramax 5 SBI Echo 2015 Imabari Ultramax 31 SBI TBN 3 2015 Chengxi Ultramax 6 SBI Lyra 2015 Dacks Ultramax 32 SBI TBN 4 2016 Chengxi Ultramax 7 SBI Subaru 2015 Dacks Ultramax 33 SBI TBN 5 2017 Chengxi Ultramax 8 SBI Tango 2015 Imabari Ultramax 34 SBI TBN 6 2017 Chengxi Ultramax 9 SBI Maia 2015 Nacks Ultramax 35 SBI Samba 2015 Imabari Kamsarmax 10 SBI Hydra 2015 Nacks Ultramax 36 SBI Rumba 2015 Imabari Kamsarmax 11 SBI Pegasus 2015 Chengxi Ultramax 37 SBI Capoeira 2015 Hudong Kamsarmax 12 SBI Ursa 2015 Dacks Ultramax 38 SBI Electra 2015 Yangzijiang Kamsarmax 13 SBI Thalia 2015 Chengxi Ultramax 39 SBI Carioca 2015 Hudong Kamsarmax 14 SBI Cronos 2015 Imabari Ultramax 40 SBI Conga 2015 Hudong Kamsarmax 15 SBI Orion 2015 Chengxi Ultramax 41 SBI Flamenco 2015 Hudong Kamsarmax 16 SBI Achilles 2016 Imabari Ultramax 42 SBI Bolero 2015 Hudong Kamsarmax 17 SBI Hercules 2016 Chengxi Ultramax 43 SBI Sousta 2016 Yangzijiang Kamsarmax 18 SBI Perseus 2016 Chengxi Ultramax 44 SBI Rock 2016 Yangzijiang Kamsarmax 19 SBI Hermes 2016 Imabari Ultramax 45 SBI Lambada 2016 Hudong Kamsarmax 20 SBI Zeus 2016 Mitsui Ultramax 46 SBI Reggae 2016 Hudong Kamsarmax 21 SBI Hera 2016 Mitsui Ultramax 47 SBI Zumba 2016 Hudong Kamsarmax 22 SBI Hyperion 2016 Nacks Ultramax 48 SBI Macarena 2016 Hudong Kamsarmax 23 SBI Tethys 2016 Nacks Ultramax 49 SBI Parapara 2017 Hudong Kamsarmax 24 SBI Phoebe 2016 Chengxi Ultramax 50 SBI Mazurka 2017 Hudong Kamsarmax 25 SBI Poseidon 2016 Mitsui Ultramax 51 SBI Swing 2017 Hudong Kamsarmax 26 SBI Apollo 2016 Mitsui Ultramax 52 SBI Jive 2017 Hudong Kamsarmax