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Tuesday, 05 February 13
THE SHIPPING SECTOR IS " NAVIGATING IN STORMY WATERS" - PWC
 The vulnerabilities of the global economy have been exposed and have more than played their part in making 2011 one of the worst years of shipping in terms of financial performance, which deteriorated further in 2012, according to the 2011 Global Shipping Benchmarking Analysis of PwC. In its global benchmarking analysis, which is in its fourth year of publication, PwC has analyzed certain key performance indicators (KPIs) of 150 shipping companies from around the world. The results are based on an analysis of their published annual reports over the last six years including 2011. The analysis covers both quantitative and qualitative information and gives an insight into how these companies are facing recent challenges and the main drivers of performance in the shipping industry. In our current year’s publication, developments in the area of sustainability reporting and corporate social responsibility in shipping have also been analysed, as this is rising up in the agenda of regulators, industry bodies and consumers.
The analysis shows that the Dry Bulk and the Offshore subsectors were the best performers in 2011, followed by the ferries subsector, while the Tanker subsector was the worst performer. For all subsectors the total performance for 2011 deteriorated compared to 2010 except for the ferries subsector which reported a slightly better performance. With the exception of the working capital to net revenues, all financial performance indicators stabilized or deteriorated in 2011 compared to 2010.
Socrates Leptos-Bourgi, Partner of PwC in Greece and the PwC Global Shipping & Ports Leader, says: “Unfortunately, the macroeconomic environment continues to be extremely uncertain. Combined with the delivery of new vessels into the existing fleet as a result of the tail end of the order book that was built in the years prior to the crisis has exerted severe pressure on hire rates for most subsectors for the shipping industry. Returns are particularly unattractive and equity investors have certainly incurred significant losses in the value of their investments. For seasoned participants in the shipping industry, this state of affairs may not come as a surprise, although the extent and depth of this downturn may have been hard to predict. Nevertheless, for some investors who understand the cyclicality of this industry, it is at this particular time that they believe that the best opportunities arise to enter the market.”
With increasing volatility and uncertainty prevalent across all sectors, banks are less optimistic about a recovery and are testing their shipping loans against more pessimistic assumptions about the future. Loan finance has also been impacted by the exit of some traditional shipping banks, the severe tightening of funding and the increased cost of new funding for ship owners. Many shipping companies have breached loan-to-value and liquidity covenants and have had to request lenders to either provide them with waivers or to revise loan terms. Among the companies covered by the PwC analysis 17% have reported that they have restructured their loan facilities. Approximately 21% of those belong to the tanker sector and 17% to the dry bulk sector.
Vessel values incurred a significant decline in 2011, both for new buildings and for second hand vessels across almost all subsectors, reflecting the weak freight market and the surplus supply of vessels in the market. The PwC analysis indicates that asset impairments are at higher levels in 2011 compared to 2010. Approximately 39% of the companies covered in our analysis reported vessel impairments in 2011 against 24% in 2010. The container subsector showed the largest share of impairments on vessels with 67% of the companies belonging in the sector incurring impairment losses.
According to the PwC analysis, the newbuilding ratio (calculated as the number of vessels on order divided by the number of vessels operated for all companies in our sample) stood at 16% for dry bulk vessels, 8% for tankers and only 1% for containerships. However, these newbuilding ratios are markedly lower than those for the whole shipping market. It is considered that this may be reflective of the fact that most of the companies in the sample are listed and, being accountable to a number of shareholders in the public markets, tend to follow more conservative strategies, while private companies have more risk tolerance and tend to take a more aggressive view of the market.
The PwC analysis also indicates higher levels of shipbuilding cancellations in 2011 compared to 2010 among the companies we have covered and especially in the dry bulk sector, which also reported a significant decline in returns to investors. The increase in shipbuilding cancellations were accompanied with significantly reduced new order activity. With the exception of 2009, the amount invested in new orders was the lowest since 2004. A significant portion of the investments in 2011 are attributed to the offshore sector.
The PwC analysis also looked at the performance of shipping companies across the various shipping sectors and their 1H2012 results. With the exception of the companies belonging to the offshore segment which showed a very positive trend, there was a clear deterioration in their results compared to their performance on the respective period of 2011. The dry bulk market was the hardest hit by the current market conditions with 68% of the companies covered, reporting a more than 15% decrease in their net income.
Although sustainability reporting is becoming important to shipping, the PwC analysis showed that the majority of shipping companies are lagging behind other industry sectors in this field. This may be a lost opportunity for shipping, since reporting about sustainability is not merely a matter of compliance but, more importantly, can have an impact on the bottom line. Pressure on the shipping sector to improve its sustainability reporting is likely to rise in the future as regulators, consumers and other participants in the supply chain become more sensitive to environmental and social responsibility concerns.
Source: PwC (PriceWaterHouseCoopers) / Hellenic Shipping
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Thursday, 21 February 13
SPRING COAL PROCUREMENT 2013 IS ABOUT TO TAKE PLACE
In 2012, “Steady Growth” had set the keynote for China’s economic development. Guided by the principle of progressing steadily, do ...
Wednesday, 20 February 13
BAKRIE GROUP LOOKS TO HAVE A CLEAR UPPER HAND - LUCKY ARIESANDI, CFA
The Bakrie-Rothschild saga is entering its final stage, with Bumi Plc (BUMI LN)’s holders to convene on 21 Feb at 11am GMT to vote on Nat Roth ...
Tuesday, 19 February 13
NEWCASTLE PORT SHIPPED 38.65 PERCENT LESS COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 1,820,559 MT of thermal and coking coal for week ended 0700 hours 18 February 2013, Newc ...
Monday, 18 February 13
78.75 MILLION TONS OF COAL RESERVES ARE NEWLY PROVEN IN WUGANG HUNAN PROVINCE
COALspot.com - Recently, Wugang City, known as the CHINA hundred key coal producing cities, achieved new breakthroughs in coal exploration: deep coa ...
Sunday, 17 February 13
STEEL DEMAND WILL HELP TO PUSH UP FREIGHT RATES - VISTAAR
COALspot.com - This freight market has been fairly steady week ended 15 February 2013.
The BDI was slightly up by 0.67 pct closing at 753 points ...
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- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
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- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Electricity Authority, New Zealand
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- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- White Energy Company Limited
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- The Treasury - Australian Government
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
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