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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, 08 February 13
NORTH P&I CLUB WARNS OF LIQUEFACTION RISK FOR BAUXITE CARGOES
The ‘A’ rated 170 million GT North P&I club has warned shipowners carrying bauxite aluminium ore cargoes that they have the potentia ...
Thursday, 07 February 13
CHINA NDRC APPROVED 10 BILLION YUAN POWER GENERATION PROJECTS
NDRC of China currently announced that some of power grid and power station in Jiangxu, Sichuan and Anhui Province would be newly constructed or ext ...
Thursday, 07 February 13
CAPESIZE : MORE ACTIVE WEEK IN THE PACIFIC - FEARNLEYS AS
Handy
The Atlantic market remained stable with no significant movement in rates. Rates from USG to FEast were around USD 18k and Black Sea to Feast ...
Thursday, 07 February 13
WEAK STEEL MARKET MEANS IRON ORE RALLY LIKELY TO END SOON - FITCH
The sharp rebound in iron ore prices over the last couple of months will hurt margins at non-integrated steel producers in the first quarter of 2013 ...
Tuesday, 05 February 13
NEWCASTLE PORT COAL SHIPMENTS DROPPED BY 10.77 PERCENT W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,412,497 MT of thermal and coking coal for week ended 0700 hours 4 February 2013, Newca ...
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- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- London Commodity Brokers - England
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
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