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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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Friday, 15 February 13
2ND ANNUAL INDONESIA MINING 2013 CONFERENCE
Bringing Indonesia's Mining Stakeholders Together Towards Improving Mining Investment Climate & Operations
Following the success of th ...
Friday, 15 February 13
SCRAPPING TO RISE AS BULKER OWNERS SUFFER - DREWRY MARITIME RESEARCH
Drewry's latest Dry Bulk Forecaster report suggests that cash-strapped shipowners will scrap younger and younger ships this year as the dry bulk ma ...
Thursday, 14 February 13
HANDY: ATLANTIC "STABLE"; PACIFIC "QUIET" - FEARNLEYS
Handy
The Atlantic remain stable with rates for FH from USG around USD 18k. The Pacific remains quiet due to Chinese New Year holidays. Rates were ...
Thursday, 14 February 13
BIMCO FORECASTS MOSTLY HIGHER DRY BULK RATES FOR THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Higher steel demand is expected to keep dry bulk rates elevated during the next six weeks, according to the latest BIMCO forecast. The Organization ...
Wednesday, 13 February 13
6TH ANNUAL CBM CONFERENCE
The 6th Annual CBM conference which will be held in Singapore on 18-21 June 201 offers comprehensive insights into leading CBM projects in the Asia- ...
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- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- The University of Queensland
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
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