Himalaya Shipping Ltd. · OSL:HSHP
Himalaya Shipping — H1 2023 Earnings Presentation
14 slides from Himalaya Shipping's earnings presentation, Aug 10, 2023
Slide 1: Himalaya Shipping – H1 2023 result presentation
Himalaya Shipping – H1 2023 result presentation 10 August 2023 1
Slide 2: Disclaimer and Important Information
Disclaimer and Important Information THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES REFERRED TO HEREIN IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
Slide 3: Highlights
Highlights 1H 2023 Highlights: • Completed Initial Public Offering (“IPO”) in the U.S. in April 2023, raising net equity proceeds of $44.9 million including the partial exercise of the Greenshoe option. • Successful delivery and commencement of operations of four Newcastlemax dual fuel newbuildings,
Slide 4: Key Financials 1H 2023
Key Financials 1H 2023 Income statement Comments US$ millions, except per share data 1H 2023 • Net loss of $1.1 million Operating revenues 8.2 • Operating profit of $1.8 million Vessel operating expenses (2.0) • EBITDA of $4.2 million Voyage expenses and commission (0.2) General and administrative e
Slide 5: Key Financials 1H 2023
Key Financials 1H 2023 Balance Sheet Summary Comments US$ millions June 30, 2023 December 31, 2022 • Cash increased by $19.9 million primarily as a result of: • Net cash provided by financing activities of $284.0 million from Total assets 459.8 177.8 net proceeds of $44.9 million on the U.S. IPO, dr
Slide 6: The investment thesis
The investment thesis 6
Slide 7: The right timing: record low orderbook
The right timing 25 year low orderbook at 5% Significant reduction in yard capacity 140 Capesize orderbook % of fleet 118 350 120 (59%) 300 100 250 Active Shipyards, Total 80 200 60 150 40 100 20 5 50 0 0 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 1995 1998 2001 2004 2007 2010 2013 2016 2019
Slide 8: The right timing: Capesize non-compliance and fleet age
The right timing 67% of Capesize vessels likely facing non-compliance by 2030 due to EEXI & CII Older vessels (non-eco) at risk Cum. scrapping Vessels built between Vessels built post-2016 # vessels Vessels built before 20093 candidates 2009 and 20153 unaffected by 20303 scrapped p.a. Year as % flee
Slide 9: The right ships: fleet overview
The right ships 43% more CO2 efficient than a standard Capesize4 Fleet overview CO2 pr day (mT) Price1,2 Estimated Ship Yard Size (DWTk) Ship type ($m) delivery date3 Mount Norefjell 70.2 NTS 210 DF Newcastlemax Mar-23 (43%) Mount Ita 70.2 NTS 210 DF Newcastlemax Mar-23 138 Mount Etna 70.2 NTS 210 D
Slide 10: The right ships: fuel flexibility and premium earnings
The right ships Fuel flexibility unlocking premium potential vs. conventional vessels $/day 28 024 4 858 4 212 16 200 2 754 2022 average 17% larger cargo intake 26% lower laden fuel ~30% scrubber earnings ~70% potential when 3 Capesize Index1 consumption premium potential2 reflecting theoretical siz
Slide 11: The right ships: LNG price versus VLSFO
The right ships LNG expected to be at a discount to VLSFO by 2026 Himalaya ships bunkering LNG in July 2023 $/tonne, calorific value adjusted1,2 LNG @ HSFO preferred LNG @ discount fuel with scrubber discount Seasonality in LNG markets 3,000 Some seasonal offer opportunity to bunker in opportunities
Slide 12: The right financing: estimated cash break-even
The right financing Estimated cash break-even of a fully delivered basis Last upcycle Capesize rates vs. est. equivalent cash break-even 1 year Capesize timecharter rates 2003 – 2010, ($/day) Value of ship (average purchase price) $m 71.6 Oct 2008 Financing (average debt financing)1 " 63.1 200,000 1
Slide 13: The right strategy
The right strategy In the last cycle you made 6x just owning the assets Capital discipline Himalaya has a brand new fleet No need for investments in fleet renewal Return cash-flow after debt service to shareholders Ambition to pay monthly dividends once ships are delivered $61k/day + 41% premium + $
Slide 14: Summary
Summary 1 The right timing – record low orderbook and limited yard capacity The right ships – reduction in CO2 emissions3 by >40% when running on LNG – 2 earnings significant premium to Capesize index rates 3 The right financing – fixed interest rate interest secures low CBE 4 The right strategy – c