2. DISCLAIMER
This document contains forward-looking statements which are statements that are not historical facts,
including statements about our beliefs and expectations. Forward-looking statements generally can be
identified by the use of forward-looking terminology, such as “may,” “will,” “could,” “expect,”
“anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project” and similar terms and phrases.
These statements include, among others, statements regarding our business strategy, future financial
position and results, and plans and objectives of our management for future operations. Forward-
looking statements are, by their nature subject to substantial risks and uncertainties, and investors
should not unduly rely on such statements. Forward-looking statements reflect our current views with
respect to future events and are not a guarantee of future performance. These statements are based on
our management’s beliefs and assumptions, which in turn are based on currently available information.
Although we believe the assumptions upon which these forward looking statements are based are
reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking
statements based on these assumptions could be incorrect. Actual results may differ materially from
information contained in the forward-looking statements as a result of a number of factors, many of
which are beyond our control . Because of these factors, we caution you not to place undue reliance on
any of our forward-looking statements. Forward-looking statements we make represent our judgment
on the dates such statements are made. New risks and uncertainties arise from time to time, and it is
impossible for us to predict these events or how they may affect us. Save as required by all applicable
laws of applicable jurisdictions, including the SFA, and/or rules of the SGX-ST, we assume no obligation
to update any information contained in this document or to publicly release the results of any revisions
to any forward-looking statements to reflect events or circumstances that occur, or that we become
aware of, after the date of this document.
2
5. FINANCIAL HIGHLIGHTS FOR 6 MONTHS
(H1 FY 2013)
REVENUE INCOME
Revenue at USD 66.2 mn. as Net Profit at USD 0.1 mn. as
compared to USD 73.2 mn. for compared to USD 5.6 mn. for
the corresponding period the corresponding period
previous year previous year
EBITDA OPERATING DAYS
EBITDA at USD 22.8 mn. as Operating days at 2918 days as
compared to USD 28.3 mn. for compared to 3120 days for the
the corresponding period corresponding period previous
previous year year
• Decrease in Revenue and Income mainly due to weaker spot markets as
compared to previous year
• Decrease in operating days due to idle days and higher scheduled drydock days
as compared to previous year
Note : FY /Financial Year refers to the period from April 1st of current year to March 31st of following year
5
* Market rate refers to average of Time charter routes for Panamax vessels
6. FINANCIAL HIGHLIGHTS FOR THE QUARTER
(Q2 FY 2013)
REVENUE INCOME
Revenue at USD 35.5 mn. as Net loss at USD 0.3 mn. as
compared to USD 35.1 mn. for compared to net profit of USD
the corresponding period 1.7 mn. for the corresponding
previous year period previous year
EBITDA OPERATING DAYS
EBITDA at USD 11.2 mn. as Operating days at 1476 days as
compared to USD 13.0 mn. for compared to 1558 days for the
the corresponding period corresponding period previous
previous year year
Note : FY /Financial Year refers to the period from April 1st of current year to March 31st of following year
* Market rate refers to average of Time charter routes for Panamax vessels
6
7. BALANCE SHEET HIGHLIGHTS
(In USD millions) 30 September 2012 30 September 2011
Cash & Bank Balances 6.4 17.1
Trade Receivables 35.6 15.0
Vessel, Property & 597.0 626.8
Equipment
Debt 236.2 264.2
Trade Payables 18.3 15.7
Shareholders Equity 391.7 391.5
Debt Equity Ratio 0.60 0.67
* As on
Market Price per share SGD 0.115* SGD 0.139 November
07, 2012
EPS (for 6 months ended) SGD 0.0002 SGD 0.006
7
8. HISTORICAL FINANCIAL PERFORMANCE
Particulars FY 09 FY 10 FY 11 FY 2012 H1 FY 2013
Revenue (USD mn.) 186.1 144.5 155.4 147.7 66.2
Net Profit (USD mn.) 75.8 40.7 31.1 7.8 0.1
Approx. TCE Earnings per 41,886 27,605 26,049 20,600 16,665
day (in USD)
Average Baltic Panamax TC 36,954 24,251 21,276 12,290 8,087
rate (USD per day)
Operating days 4,084 4,703 5,543 6,259 2,918
Total Fixed Assets (USD mn.) 485.4 570.8 644.5 610.5 597.0
Revenue and earnings have been impacted due to continued weak markets
However, the Company has continued to perform much better than the industry average rate
Significant increase attained in fixed assets and operating days over the past years
8
9. FLEET UTILISATION
Q2 FY 2013 H1 FY 2013
HIGH CAPACITY UTILIZATION
Owned vessels
Number of vessels 14 14
Operating days 1219 2374
Fleet utilization % 96.8% 97.8%
Chartered-in vessels*
Number of vessels 3 3
Operating days 258 545
Fleet utilization % 98.3% 99.2%
Total fleet
Number of vessels 17 17
Operating days 1476 2918
Fleet utilization % 97.0% 98.0%
TCE Revenue (US$’000s) 23,670 48,628
Approx. TCE Rate (US$ per day) 16,035 16,665
“TCE Revenue” is defined as revenue less voyage expenses before taking into account revenues attributable to vessels
chartered- in on a voyage charter.
* Company charters in vessels on short term basis to maximize earnings out of its contract.
9
10. PER DAY TCE EARNINGS Vs. MARKET
45000
40000
35000
30000
25000 Our TCE per day
20000 rate
15000 Average Baltic
10000 Panamax TC rate
5000
0
FY 2009 FY 2010 FY 2011 FY 2012 H1 FY
2013
We have consistently outperformed the market in terms of Time Charter Equivalent (TCE)
Earnings per day
10
11. FAVOURABLE LONG TERM DEBT
REPAYMENTS
32.9
25.5
24.5 21.8
13.1
US$113.5
Next 6 FY 2014 FY 2015 FY 2016 FY 2017
months FY
2013
Our debt repayment commitments are structured to ensure cash flow flexibility
Note: 1. Schedule as on 30th Sep 2012.
2. Amounts in US$ Millions
3. Repayment schedule is towards principal payments only.
4. Excludes working capital revolver loan facility 11
13. AVERAGE FREIGHT RATES COMPARISON
40
Per day USD rate in
thousands 33.7
35
30
26.6
25 23.1
YTD CY 2010
20
16.9 YTD CY 2011
14.5 14.5 YTD CY 2012
15 13.4
9.8
10 8.7 8.4 7.9
6.9
5
Source: RS
Platou
0
Capesize Panamax Supramax Handysize
The freight have fallen down considerably over the past 3 years
Note : CY /Calendar Year refers to the period from Jan 1st to Dec 31st
13
14. DRY BULK SHIPS - INVESTMENT ANALYSIS
Current 1 yr T/C Required T/C Actual in % of req.
USD/Day USD/Day T/C rate
PROMPT RESALE
Capesize 170,000 13,750 19,000 72%
Panamax 75,000 7,800 14,000 56%
Supramax 53,000 8,500 13,000 65%
5 YEARS SECOND-HAND
Capesize 170,000 13,750 17,000 81%
Panamax 75,000 7,800 12,000 65%
Supramax 53,000 8,500 12,000 71%
Source: Fearnleys
Assumptions: 25 years lifetime. Interest: 10 % on total investment, and normal operating/docking
expenses. Based on end of Oct 12 values and demoliton prices. Operating days: 355
Note : CY /Calendar Year refers to the period from Jan 1st to Dec 31st 14
15. DRY BULK ORDERBOOK AND DELIVERY
SCHEDULE
Type of vessel Order book % of fleet Delivery expected Delivery expected Delivery expected
( million DWT) in CY 2012 in CY 2013 in CY 2014 and
(million DWT) (million DWT) beyond
(million DWT)
Capesize 58.0 21.2% 22.4 24.6 11.0
Panamax 55.8 32.6% 21.4 24.4 10.1
Handymax 26.1 19.1% 11.5 11.3 3.3
Handysize 14.6 17.0% 5.6 6.5 2.5
Total Fleet 154.5 23.1% 60.9 66.8 26.8
Source: Clarksons
Majority of the delivery expected in CY 2012 and CY 2013. The orderbook remains substantially high
which will keep the freight rates low in the coming years.
15
16. DRY BULK DEMOLITION ACTIVITY
30
25
25 23.1
20
15
10.6 million dwt
10
6.4
5
0
CY 2009 CY 2010 CY 2011 YTD Sep
2012
Source: Clarksons
High demolition activity seen in CY 2011 and YTD CY 2012
16
17. WORLD ECONOMY
% change
10
9.3
8.4
8 7.8
7.1
6.7
6 5.8
CY 2011
4 3.8 3.6 CY 2012 (f)
3.3
CY 2013 (f)
2.1 2.0 2.3
2 1.8
1.5 1.3
0.2
0
USA Euro Zone Japan China India World
-0.5 -0.7
-2
Source: RS Platou,
IMF
Global Economy expected to grow at a lower rate in CY 2012
17
18. INDUSTRIA L PRODUCTION &
DRY BULK GROWTH
Industrial production growth rate estimates
Growth rate in 15
percentage
10
CY 2011
5 CY 2012 (f)
CY 2013 (f)
0
Source: RS Platou USA Euro Area Japan China Other Asia
-5
Dry Bulk Trade Growth correlated with GDP Growth
14
12
10
8
6 Dry Bulk Trade
4 World Output
2
0
-2 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (f)
(est)
-4 Source: IMF, Clarksons
Industrial production growth expected reduce even for China in the coming years which will also
impact the dry bulk trade 18
19. MARKET OUTLOOK
POSITIVE NEGATIVE
The overall outlook for the dry bulk shipping market seems to be negative mainly due to
oversupply of vessels
19
21. COMPANY HIGHLIGHTS
Young modern fleet with average age much below the industry average.
Fleet Largest fleet owner of geared Panamaxes amongst Indian-Owned
Shipping Companies.
History of repeat contracts from major customers
Customer base Blue Chip customer base including Tata Power, Arcelor Mittal Group, Cosco
Group, Cargill, Bunge Group and Noble Group
The Board and Key Management Personnel have collective industry
experience of close to 200 years.
Management Having an experienced in-house technical management company ensures
delivery of high quality service to our customers together with minimising
operating expenses and maximising operational efficiencies
Providing customized logistics solutions from the load port to the point of
Logistics usage to its customers in India.
solutions The Company has won high revenue generating contracts due to this
unique advantage
21
22. OUR STRATEGY
Deploy substantial Focus on high
portion of fleet growth markets in
capacity on long dry bulk trade from
China South Korea
India
term contracts to China and India
Iron Ore
Iron Ore hedge against
Brazil Coal Indonesia freight volatility
Coal Australia
Iron Ore
Iron Ore
To provide Leverage strong
VLOC routes customized end-to- and continued
end logistics relationships with
We specialize in transportation of commodities such as solutions existing customers
coal and iron ore to and from countries like India,
Indonesia, China, Brazil and Australia.
Mercator Singapore Mercator India
Ship voyage Trucks/ Rail
Port loading with Port unloading
Jetty Stock Yard User Site
geared vessels with geared vessels
Coal Barges Trucks/ Rail
Together with Mercator India, we provide logistics solutions from load port to point of usage to customers.
22
23. AWARDS & RECOGNITION
Mercator Lines
(Singapore) Limited Best Annual Report in 2009
(Silver) and 2010 (Bronze)
Global Entrepreneur Best Investor Relations 2012 Best Investor Relations 2011 amongst Singapore listed
of the Year 2010 (Gold) (Silver) companies
Emerging India Awards 2010 Singapore Corporate Awards Singapore Corporate Awards Singapore Corporate Awards
DEMONSTRATING STRONG
CORPORATE GOVERNANCE
Ranked 20th by NUS
and Business Times
TRACKRECORD
amongst the public Ranked 16th in overall
listed companies in performance amongst
Governance and listed shipping
Transparency Index companies in the world –
(GTI) Marine Money June/July
2012
Winning awards for consecutive four years in a row in the Singapore Corporate Awards emphasizes
our drive towards better corporate governance and Investor Relations
23
24. RELATIONSHIPS
OUR KEY RELATIONSHIPS
One of the largest iron ore companies in the world
The largest steel manufacturing company of the world
One of the largest power companies in India. Owned by one of the most reputed business groups in
the world.
One of the largest commodity trading companies
OUR OTHER RELATIONSHIPS
24
25. FLEET PROFILE
S. No Owned Vessels Type Capacity Year Built Shipyard
(DWT)
Geared Panamax 73,461 2001 Tsuneishi Corp, Japan
1 Sri Prem Aparna
2 Sri Prem Varsha Geared Kamsarmax 82,379 2006 Tsuneishi Corp, Japan
3 Sri Prem Veena Gearless Kamsarmax 82,459 2007 Tsuneishi Corp, Japan
4 Gaurav Prem Gearless Panamax 73,901 2005 Jiangnan, China Panamax
5 Gearless Panamax 74,444 2006 Hudong, China Fleet Average
Garv Prem
Age: 8 years
6 Sri Prem Vidya Geared Kamsarmax 82,273 2006 Tsuneishi Corp, Japan
7 Garima Prem Gearless Panamax 74,456 2007 Hudong, China
8 Kesari Prem Geared Panamax 69,186 1997 Tsuneishi Corp, Japan
9 Kanak Prem Geared Panamax 69,221 1997 Hashihama, Japan
10 Sri Prem Putli Very Large Ore Carrier (VLOC) 279,022 1993* Yiulian Yard, China
11 Kalpana Prem Geared Panamax 73,652 2000 Imabari Shipyard, Japan
12 Gauri Prem Gearless Panamax 74,405 2007 Hudong, China
13 Aarti prem Gearless Panamax 69,087 1994 Imabari Shipyard, Japan
14 Chitra Prem Gearless Post Panamax 93,270 2010 New Yangzijiang, China
Converted from VLCC to VLOC in 2009 in Yiulian
S. No Chartered vessels Type Capacity Year Built Country
(DWT) Built
1 Chaitali Prem Gearless Post Panamax 93,312 2009 China
2 Chanchal Prem Gearless Post Panamax 93,259 2009 China
3 Maria Laura Prem Gearless Post Panamax 91,945 2010 South Korea
25
26. FLEET DIVERSIFICATION
DIVERSIFICATION BY TYPE
PANAMAXES POST PANAMAXES
KAMSARMAXES KAMSARMAXES VLOC
(GEARLESS) PANAMAXES (GEARED)
• Chitra Prem • Sri Prem Aparna • Sri Prem Putli
• Gaurav Prem • Sri Prem Veena
• Chaitali Prem • Kesari Prem
• Garv Prem • Sri Prem Varsha
• Chanchal Prem (Geared) • Kanak Prem
• Aarti Prem
• Maria Laura • Sri Prem Vidya • Kalpana Prem
Prem (Geared)
DIVERSIFICATION BY DEPLOYMENT DIVERSIFICATION BY CARGO
CONTRACT OF
4%
AFFREIGHTMENT CONSECUTIVE VOYAGE
Geared CONTRACT Iron ore
Panamaxes/Geared VLOC
Kamsarmaxes
37% Others
TIME CHARTER
Coal
45%
Geared and Gearless
Panamaxes/Geared
BAREBOAT CHARTER Grain
Gearless Panamax
Kamsarmax/Post
Panamaxes
8%
26
27. RISK MANAGEMENT
FREIGHT VOLATILITY BUNKER FUEL COSTS
- Long term contracts - Appropriate Bunker adjustment factor in
all long term voyage charter contracts
- Forward Freight Agreements (FFAs)
-Bunker cost borne by Charterer in Time
Charter Contracts
Multifaceted risk
management
strategy attuned to
market volatility
CURRENCY RISKS ACCIDENT RISKS
- Insured all vessels adequately
- Income, expenses and reporting in USD
- Successful implementation of safety
management practices
27
28. MOVING FORWARD
• The Company expects the next 12-18 months to remain challenging for drybulk
shipping industry.
• The Company is exploring various options to shore up its liquidity to overcome the
current downfall in the industry which are as under:
Achieving increased
Sale of one of its operational efficiency
Vessel by closely monitoring
operating costs
Reduction in liabilities by
engaging the owners of
long term chartered in
vessels
Better positioned to overcome the current industry
challenges
28
29. GLOSSARY
•Under a COA, the ship owner provides capacity to transport a certain amount of cargo
Contract of Affreightment within a specified period from one place to a destination designated by the customer.
Typically all of the ship`s operating, voyage**and capital expenses are borne by the ship
(COA) owner. Freight rate normally is agreed on a per cargo ton basis.
•Under a CV, the ship owner provides capacity to transport a certain amount of cargo on
Consecutive Voyage a consecutive voyage basis over the contract period. Similar to a COA, all of the ship`s
operating, voyage**and capital expenses are borne by the ship owner and freight rate is
Contract (CV) agreed on a per cargo ton basis.
•A charter under which a vessel is chartered to a customer for a fixed period of time at a
rate that is typically fixed. The charterer pays all voyage costs. The owner of the vessel
Time Charter (TC) receives monthly or semi monthly charter payments on a per day basis and is typically
responsible for providing the crew and paying all vessel operating expenses(including
maintenance, repair and docking) and capital costs of the vessel.
Time Charter Equivalent •A standard shipping industry performance measure used primarily to compare period-
to-period changes in a shipping company`s performance despite changes in the mix of
(TCE) chartered types.
**Voyage Expenses - Expenses incurred due to a Vessel`s travelling from a loading port to a discharging port, such as fuel(bunker) costs, port
expenses, agents` fees, canal dues, extra war risk insurance and commissions.
29
