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Wednesday, 26 October 11
PWCS GLOBAL SHIPPING BENCHMARKING ANALYSIS: RECOVERY IN 2010 BUT GREAT UNCERTAINLY FOR 2011
 The recovery of global trade in 2010 to the same levels as 2008 led to an improvement in the overall performance of shipping companies in 2010 compared to 2009, according to the 2010 Global Shipping Benchmarking Analysis of PwC. But this does not mean that the shipping industry is on a safe path to recovery, since the deteriorating economic situation in Europe and the US have increased volatility and market uncertainty, impacting shipping companies’ performance as reflected in their reported results in the first half of 2011, which have been worse than the same period in 2010.
In its global benchmarking analysis, which is in its third 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 five years including 2010. 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.
The analysis shows that the Container and the Dry Bulk subsectors were the best performers in 2010, while the Tanker subsector was the worst performer. With the exception of net debt ratio and the ratio of net fixed assets to sales ratio, all financial performance indicators stabilized or improved in 2010 compared to 2009.
Socrates Leptos-Bourgi, Partner of PwC in Greece and the PwC Global Shipping & Ports Leader, says: “We’ve seen improvements in freight rates across all trades in 2010, which combined with cost savings implemented in 2009, have improved the reported profitability of shipping companies in 2010. How good or bad things will get in the future depends on how well the world economy copes with the post financial crisis problems that the US is facing, the resolution of the European sovereign debt crisis, the challenge of rebuilding northern Japan and the prospects of the Chinese economy. However, given the pressures caused from the supply of new tonnage in the shipping markets, it will require an extraordinary performance on all accounts to bring the shipping industry back to a period where returns become relatively attractive again.”
While the world economy is still fragile, with increasing volatility and uncertainty prevalent across many sectors, businesses continue to face tightening credit conditions and limited liquidity. Financial institutions have toughened their positions, both in existing exposures and when making new facilities available. Under these conditions many companies were forced to restructure their loan facilities in an attempt to rectify existing issues with their facilities or in preparing for a tougher year ahead.
Approximately 60% of the container vessel owners covered by our analysis have reported restructuring of their loan obligations during 2010. The corresponding percentage for the dry bulk sector was 29% and for the tanker sector 12%. But significantly less owners foresee debt restructuring in 2011.
Second hand vessel sale & purchase activity was significantly lower in 2010 than in 2009. The number of reported sales was down by close to 20% compared to 2009. Vessel values were under pressure reflecting a weaker freight market, an increasing concern about the order book and in general a large number of potential sales candidates. The survey results demonstrate that asset impairments are at lower levels in 2010 compared to 2009 in most sectors, but especially in the dry bulk and tanker sectors. The container sector reported the largest share of impairments on vessels in 2010, with 42% of the companies incurring impairment losses.
Our analysis shows clearly lower levels of shipbuilding cancellations in 2010 compared to 2009. Especially in the dry bulk sector there was a dramatic reduction of vessel cancellations among the companies we have covered. The reduced shipbuilding cancellations were accompanied with a resumption of ordering activity. This may have been the result increasing cargo demand, the firming of freight rates and low newbuilding prices. Especially for the dry bulk sector the number of orders for new vessels increased two-fold. This trend is expected to change in 2011 as the lower growth in world trade and the increase newbuilding deliveries is likely to divert ship owners’ interest to other subsectors such as gas (LPG or LNG) carriers.
According to our 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) stands at 25% for dry bulk vessels, 7% for tankers and 10% for containerships. However, these newbuilding ratios are significantly lower than those for the whole shipping market. We believe this is reflective of the fact that most of the companies in our 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.
Finally, scrapping activity declined in 2010, despite very strong scrap prices and relatively weak hire rates. Looking at the dry bulk sector, scrapping activity was negligible in the second half of 2010. However, this trend is likely to change as the container and tanker sectors are under severe pressure from freight rates that declined to levels close to or below operating break-even levels and scrap prices remaining at attractive levels.
Source: PriceWaterHouseCoopers / Hellenic Shipping
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Wednesday, 30 September 20
MARKET INSIGHT - INTERMODAL
Spot rates for Capesize bulk carriers received a significant boost last week, however, there are certain reservations in the market regarding the p ...
Tuesday, 29 September 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.73 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.91 points Monday, up 0.73 percent week on week.
The index, released by China ...
Tuesday, 29 September 20
SHIPPING MARKET - ALLIED
Here we are, just a short breath before the final quarter of the year, and many are now debating to what extent we can really expect a firm dry bul ...
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INDONESIAN COAL COMPANIES' EARNINGS TO WEAKEN IN 2H20 - FITCH RATINGS
Rated Indonesian coal miners and contractors will have weaker operating and financial performances in the second half of 2020 than in the first, sa ...
Tuesday, 29 September 20
RUSSIA'S COAL PRODUCTION TO DROP BY 10.5% IN 2020, SAYS MINISTRY - TASS
Russia’s Economic Development Ministry projects a 10.5% decrease in coal production in the country in 2020 compared with last year to 395 mln ...
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- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
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