Does supply meet demand? Price cutting scenarios Impact on your company’s profitability Retaining the competitive advantage

2. HEAVY LIFT SHIPPING TRENDS
SUPPLY v DEMAND

3. Dry Bulk Indices 1985 – 2013 – Some historical
Perspective …
GFC
ORDER BOOM

4. Daily Freight Index – July 2007 – Oct(Ocean Transport)
Recent Project Experience 2013

5. History repeats itself…
 Shipping is a cyclical industry.
 Newbuilding orders were made on the back of
a record breaking boom.
 Downturn came with an unprecedented bang
in the wake of the GFC
 Too much supply will always lead to
deterioration in rates.
 Shipping is a commodity but specialist heavy
lift – especially at the higher end – requires
engineering and risk management – which
commands a premium.

6.  H/L Liner Fleet at 2.12m dwt as@ Oct 2013
 Min lifting capacity 300mt
 Trend is increasing lifting cap from 300-500t in
late 90’s to 700-900t in 2010’s
 DWT capacity also trending up

7. Heavy Lift Tramp Fleet
Owner
Number of Units
Total DWT Fleet (MT)
Ave Combinable Lifting
Capacity (MT)
Ave DWT per vsl (Mt)
Ave age of vessel
BBC
48
538,062
11,210
463
4.7
Bockstiegel
31
420,378
13,561
554
2.7
HHL
24
400,399
16,683
878
3.2
Other
25
282,693
11,308
359
9.1
Big Lift
15
220,974
14,732
867
9.3
Peter Dohle
17
205,499
12,088
422
7.1
SAL
16
166,112
10,382
985
9.8
Thorco
13
149,437
11,495
346
7.1
Combi Lift
16
136,097
8,506
609
7.3
Jumbo
14
133,042
9,503
1,293
12.3
Intermarine
12
130,599
10,883
575
5.7
Nordana
7
86,256
12,322
414
0.0
SE Shipping
5
75,665
15,133
420
3.0
Hanssy
7
63,468
9,067
471
19.0
Desgagnes
4
50,845
12,711
315
4.0
Elmira
3
26,622
8,874
333
13.3
Heino Winter
2
25,564
12,782
240
8.0
Freese
2
25,488
12,744
240
7.0
Sloman Neptun
2
25,344
12,672
300
1.0
Hartman
6
23,800
3,967
260
2.5
PGM
3
22,901
7,634
400
13.0
Sloman Neptun
2
25,344
12,672
300
1.0
Atlanska Plovida
2
14760
7380
500
18.5

8. Premier League of Heavy Lift Carriers
Owner
Number of Units
Total DWT Fleet (MT)
Jumbo*
14
133042
SAL
16
Ave DWT per vsl (Mt)
9,503
Ave Combinable Lifting
Capacity (MT)
Ave age of vessel
1,293
166112
12.29
10,382
985
Ave Combinable
Total DWT Fleet (MT) Ave DWT per vsl (Mt) Lifting Capacity (MT) Ave age of vessel
2414
400399
16,683
133042
9,503
1,293 878
12.29
16
166112
10,382
985
9.81
24
400399
16,683
878
3.17
1515
220974
14,732
220974
14,732
867 867
9.33
16
136097
8,506
609
7.31
12
130599
10,883
575
5.67
1631
136097
8,506
609
420378
13,561
554
2.71
48
538062
11,210
463
4.67
17
205499
12,088
422
7.12
12
130599
10,883
575
9.81
Bockstiegel
31
420378
13,561
554
2.71
BBC
48
538062
11,210
463
4.67
Peter Dohle
17
205499
12,088
422
7.12
Owner
HHL
Jumbo
SAL
HHL
Big Lift Big Lift
Combi Lift
Intermarine
Combi Lift
Bockstiegel
BBC
Peter Dohle
Intermarine
Number of Units
*Includes 2 x K3000 new buildings delivery 2014
3.17
9.33
7.31
5.67

10. Years >

11. Market Trends
 Fleet renewal over past 5 years slowing.
 Entry of Capital Fund Managers into shipping
markets.
 Trend towards consolidation amongst carriers
driven by market downturn and need to
improve prospects.
 Fewer Carriers will lead to greater control and
leverage of rates towards higher levels.

13. Global EPC Feed Projects – Energy & Power
Sector 2014 - 2017

14. Snapshot SE Asia 2014 – 2019 EPC + FEED Projects

15. Snapshot Indiua 2014 – 2019 Confirmed EPC Projects
India Projects 2014 - 2020 (Upstream, Power, Renewables, Midstream, Downstream confirmed)
120,000
100,000
80,000
60,000
40,000
20,000
Source: EIC, Upstream
0
2014
2015
2016
2017
2018
2019
2020
ALE Heavy Lift, SE Asia Marine Business Strategy 2013

16. Conclusions on Project Demand
 Global Project Demand remains solid.
 External shocks in 2011 / 12 – i.e., Arab Sping
- put dampener on project development in
MENA region.
 Positive developments in US-Iran relations
 Still some concern on situation in MENA i.e.,
Syria, Egypt, Libya
 Liquidity coming back to Finance sector which
is good for projects.

17. Conclusion: Supply v Demand
 Downward pressure on shipping rates has mostly
been caused by significant over capacity / over
supply and fleet expansion in H/L sector.
 Significant financial pressure forced restructure and
collapse of some shipping co’s.
 Entrance into the market by Capital Funds and
Venture Capital has led to sector consolidation.
 Consolidaiton to continue leading to fewer players
and greater market control.
 Project Demand is steady and with liquidity coming
back into the financial sector will create further
opportunities for energy and infrastructure projects.
 External shocks must always be taken into account!
 Rates to gradually rebound end 2014 with pick up
2015/2017.

18. Final thought: Equilibrium – is it too much to ask?!
Thank you!