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Weathering The Perfect Storm

Weathering The Perfect Storm. Magnus Fyhr. Jefferies Tanker Index. What’s In Store For 2005?. Strong Global Economic Growth Global Oil Demand Growing At 2%+ Stricter Regulations Against Single Hulls Increasing Competition For Shipyard Capacity

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Weathering The Perfect Storm

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  1. Weathering The Perfect Storm Magnus Fyhr

  2. Jefferies Tanker Index

  3. What’s In Store For 2005? • Strong Global Economic Growth • Global Oil Demand Growing At 2%+ • Stricter Regulations Against Single Hulls • Increasing Competition For Shipyard Capacity • Investor Concerns Center On Rate Volatility & Orderbook • Risk/Reward Remains Attractive

  4. Jefferies Charter Rate Assumptions VLCC Charter Rates (2000-2006E) Suezmax Charter Rates (2000-2006E) MR Product Charter Rates (2000-2006E) Aframax Charter Rates (2000-2006E)

  5. The “Rodney Dangerfield” of the Energy Sector … • Low P/E’s reflect volatility • Capital intensive with historically poor returns • Fragmented industry • Tanker shares have historically been valued on NAV

  6. … Is Finally Getting Some Respect • Shipping stocks showing up on investor radar screens • Trading volumes increasing • Increasing number of publicly traded shipping companies • Group market cap now above $20 billion

  7. Yield Stocks Are Trading At Premium

  8. Asset Values Are Firming Despite Volatility VLCC Sale Prices (2000-2005) EBITDA Payback On VLCC Newbuild VLCC Spot Charter Rates (2000-2005) VLCC 1 Yr. T/C Rates (2000-2005)

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