Himalaya Shipping Ltd. · OSL:HSHP
Himalaya Shipping — Q3 2023 Earnings Presentation
16 slides from Himalaya Shipping's earnings presentation, Nov 15, 2023
Slide 1: Himalaya Shipping – Q3 2023 results presentation
Himalaya Shipping – Q3 2023 results presentation 15 November 2023 1
Slide 2: Forward looking statements
Forward looking statements This results presentation and any related discussions contain forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not reflect historical facts and may be identified by words such as
Slide 3: Highlights
Highlights Q3 2023 Highlights: • Successful delivery and commencement of operations of an additional two Newcastlemax dual fuel newbuildings. • All delivered vessels generated total operating revenues of $10.2 million, an average time charter equivalent earnings of approximately US$22,300/day, gross
Slide 4: Key Financials Q3 2023
Key Financials Q3 2023 Income statement Comments US$ millions, except per share data Q3 2023 • Operating revenues of $10.2 million on six vessels. Average time charter equivalent earnings of approx. US$22,300/day, gross. Operating revenues 10.2 • Vessel operating expenses of $3.0 million. Average ve
Slide 5: Key Financials Q3 2023
Key Financials Q3 2023 Balance Sheet Summary Comments • Net cash generated by operating activities of $1.6 million. US$ millions September 30, 2023 June 30, 2023 • Net cash used in investing activities was $127.6 million, primarily consisting of $103.1 million for the final installment payments for
Slide 6: Strong growth in dry bulk demand
Strong growth in dry bulk demand Jan-Sep yoy change in tonne-miles by segment and commodity Million tonne-miles Source: AXSDry, Arrow 6 6
Slide 7: Capesize market fundamentals should see more support going forward
Capesize market fundamentals should see more support going forward Chinese demand - iron ore restocking need, strong bauxite demand and some more monetary support Iron ore port stocks in China Chinese bauxite imports Fixed asset investment growth in China Source: Clarksons Shipping Intelligence Netw
Slide 8: A significant reduction in Capesize congestion has put pressure on freight rates
A significant reduction in Capesize congestion has put pressure on freight rates Decreases in speed have not been enough to counterweight the drop in congestion Congestion YTD. 2023 Average speed YTD. 2023 Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) 8
Slide 9: Capesize freight rates have been very sensitive to a drop in congestion
Capesize freight rates have been very sensitive to a drop in congestion Utilization vs. stationary fleet IF stationary fleet in Q3.23=Q2.23, then Capesize freight rates would theoretically be 50% higher and average at 19.000 $/day, instead of 12.500 $/day. IF stationary fleet in Q3.23=Q3.22, then Ca
Slide 10: The investment case
The investment case 10
Slide 11: The right timing
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 12: The right timing
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 13: The right ships
The right ships 43% more CO2 efficient than a standard Capesize1 …well positioned for EU ETS commencing 2024² CO2 pr day (mT) (43%) 138 CO2 78 180k dwt 2014/15 Himalaya Newcastlemax built Capesize vessel LNG propulsion 1. When running on LNG, basis 43 mT pr day fuel consumption and 3.2 CO2 pr mT for
Slide 14: The right ships
The right ships Fuel flexibility unlocking premium potential vs. conventional vessels $/day 28 024 4 858 4 212 16 200 2 754 2022 average 17% larger cargo intake 26% lower laden fuel ~30% scrubber earnings ~70% potential when 3 Capesize Index1 consumption premium potential2 reflecting theoretical siz
Slide 15: The right financing
The right financing Estimated cash break-even of a fully delivered basis Last upcycle Capesize rates vs. est. equivalent cash break-even 1 year Capesize timecharter rates 2003 – 2010, ($/day) Value of ship (average purchase price) $m 71.6 Oct 2008 Financing (average debt financing)1 " 63.1 200,000 1
Slide 16: 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