Himalaya Shipping Ltd. · OSL:HSHP
Himalaya Shipping — Investor Presentation (July 2021)
24 slides from Himalaya Shipping's investor presentation, July 2021
Slide 1: Himalaya Shipping Ltd.
Himalaya Shipping Ltd. Historic low order book, already balanced market and new environmental regulation creates unprecedented set-up Presentation July 2021 |
Slide 2: Himalaya - Project description
Himalaya - Project description Himalaya Shipping Experienced technical and supervisory team Ship design Duel fuel LNG Newcastlemax – tier 3 Shipyard New Times Shipyard Fuel system Duel fuel LNG and MGO Time of order Jan 2021 (contract signed Mar 21) # ships 12 March 23 – Sept 24 Delivery dates (curr
Slide 3: Newbuilding schedule
Newbuilding schedule Capex schedule (USDm) Paid as Signing Target of end Remaining Price1 Size / option delivery Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 July-212 capex Ship (USDm) Yard (DWTk) date date 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 2024 (USDm) (US
Slide 4: LNG - 40% reduction in CO2
LNG - 40% reduction in CO2 Significantly lower CO2 emissions Significant flexibility kT of CO2/year 40 40% reduction in CO2 NOx emissions 37 vs almost totally eliminated standard capesize ship 35 w/o scrubber SOX emissions 30 almost totally eliminated 25 Material reduction in particle emissions 22 2
Slide 5: Indicative financing proposals
Indicative financing proposals Traditional lease pr ship Chinese lease pr ship Value at equity issue (USDm) 71.3 Value at equity issue (USDm) 71.3 Leverage % 75% Leverage % 85% Leverage pr ship (USDm) 53.475 Leverage pr ship (USDm) 60.605 Profile (years) 19 Profile (years) 18 Interest rate 4.60% Int
Slide 6: Newbuilding contracts already well in the money
Newbuilding contracts already well in the money Steel prices up almost 50% since Dec Newbuilding prices going up 1100 $m/ship 1000 $/t China plate price 900 79 800 700 77 600 500 400 75 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 20
Slide 7: Why are we ordering bulkers?
Why are we ordering bulkers? Record low orderbook Environmental changes - more scrapping Limited yard capacity – less financing 140% Non-compliant by 2023 314 ships – 21% Cape OB % of fleet 250 166 shipyards closed in China Facing non-compliance 828 ships – 55% Anhui Hengshun Fangzhou Nantong Jinghu
Slide 8: Dry bulk demand is growing – Brazil exports set to increase further
Dry bulk demand is growing – Brazil exports set to increase further Dry bulk is a growth market Vale iron ore production guidance 14% MT Significant Brazil export growth coming Need more than 100 12% additional NMAXs if volumes goes to China 10% 8% 6% Avg. demand growth last 10y - ~5% 4% 2% 0% -2% D
Slide 9: Last the orderbook was 6% was in 2002 – this happened the next 6 years
Last the orderbook was 6% was in 2002 – this happened the next 6 years Significant recovery 7.5x return on asset $10 million of equity invested Jan - 2002 Jun – 2008 turned into ~$230m of equity value $m Capesize rate $9,300/day $170,400/day Capesize $36m $96m newbuild price Capesize value $27.5m $1
Slide 10: Unique risk-reward
Unique risk-reward Himalaya will make money in almost any market1 Set-up for significant dividend yield2 (Capesize index $/day) $/day Yield based on $71.3m/ship 200,000 379% 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 61% 48% 20,000 12% 0 Mar-95 Mar-99 Mar-03 Mar-07 Mar-11 Mar-15 Ma
Slide 11: Risk factors (I/XIV)
Risk factors (I/XIV) Investing in the Company's shares through VPS registered depository receipts involves inherent risks. Before making an investment decision, investors should carefully consider the risk factors below and all information contained in this Presentation. The risks and uncertainties
Slide 12: Risk factors (II/XIV)
Risk factors (II/XIV) - Delays or defaults by the shipyards in the construction of the newbuildings could increase the Company’s expenses and diminish its net income and cash flows The Company has a number of newbuilding Newcastlemax dry bulk carriers on order, which are currently scheduled to be de
Slide 13: Risk factors (III/XIV)
Risk factors (III/XIV) - Due diligence risk The Company will seek to complete reasonable and appropriate technical, financial and/or legal due diligence prior to making an investment. Such due diligence will primarily be based on information which may only be available through certain third parties.
Slide 14: Risk factors (IV/XIV)
Risk factors (IV/XIV) - Highly cyclical nature of the dry bulk shipping industries The industry is cyclical with attendant volatility in freight rates, vessel values and consequently, profitability. Even though the degree of rate volatility among different types of vessels varies widely, the rates h
Slide 15: Risk factors (V/XIV)
Risk factors (V/XIV) Factors that influence the supply of vessel capacity include, but are not limited to: o the number of newbuilding deliveries; o port and canal congestions; o scrapping activity; o vessel casualties; and o the number of vessels that are out of service. Should the freight market l
Slide 16: Risk factors (VI/XIV)
Risk factors (VI/XIV) - Losses arising from the inherent risks of the shipping industry, which the Company’s insurance policies may not be adequate to cover The Company expects to procure insurance for its fleet against risks commonly insured against by vessel owners and operators, including hull an
Slide 17: Risk factors (VII/XIV)
Risk factors (VII/XIV) - The Company is dependent on continued exploration and production of gas ▪ The Company depends on oil and gas companies’ willingness and ability to continue making operating and capital expenditures to explore, develop and produce natural gas. Limitations on the availability
Slide 18: Risk factors (VIII/XIV)
Risk factors (VIII/XIV) Risks related to applicable laws and regulations - The Company is subject to complex laws and regulations Tax The Company will operate in many countries worldwide. As such, the Company may be subject to changes in applicable tax laws, regulations or tax treaties, and the inte
Slide 19: Risk factors (IX/XIV)
Risk factors (IX/XIV) Norwegian authorities amended Norway's tax code in 2018, by including a provision in the tax rules whereby a non-Norwegian company (such as the Company) may be considered tax resident in Norway if it has its "effective place of management in Norway". The interpretation of this
Slide 20: Risk factors (X/XIV)
Risk factors (X/XIV) Economic and other sanctions Many economic sanctions can relate to our business, including prohibitions on doing business with certain countries or governments, as well as prohibitions on dealings of any kind with entities and individuals that appear on sanctioned party lists is
Slide 21: Risk factors (XI/XIV)
Risk factors (XI/XIV) Risks related to financing - The Company is not fully funded and requires significant financing to be able to meet its obligations The Company is not yet fully funded to meet its future payment obligations, including payment of instalments to New Times under the shipbuilding co
Slide 22: Risk factors (XII/XIV)
Risk factors (XII/XIV) Risks related to the Shares (and correspondingly the investors’ depository receipts) - There are certain risks connected to the shares being registered in the Norwegian Central Securities Depository (Nw. Verdipapirsentralen) (“VPS”). The securities to be issued and listed on t
Slide 23: Risk factors (XIII/XIV)
Risk factors (XIII/XIV) In recent years, the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies. The price of the shares/depository receipts may therefore fluctuate based upon fac
Slide 24: Risk factors (XIV/XIV)
Risk factors (XIV/XIV) - European Union Substance Requirements The Economic Substance Act 2018 and the Economic Substance Regulations 2018 of Bermuda (the “Economic Substance Act” and the “Economic Substance Regulations”, respectively) became operative on 31 December 2018. The Economic Substance Act
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