Q2 2013 Earnings Presentation 20 August 2013 Statements in this presentation which are not statements of historical fact are "forward-looking statements" (as such term is defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, the Company at the time this presentation was made. Although the Company believes that the assumptions underlying such statements are reasonable, it can give no assurance that they will be attained. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information or future events, unless it is required to do so under the securities laws. The Company makes no prediction or statement about the performance of its units, warrants or common stock. For the selected financial data presented herein, the Company compiled consolidated statements of income for the three and six month periods ended June 30, 2013 and June 30, 2012.
Transcript
Q2 2013 Earnings Presentation
20 August 2013
Statements in this presentation which are not statements of historical fact are "forward-looking statements" (as such term is defined in Section 27A of the Securities Act of
1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). These forward-looking statements are based on the information available to,
and the expectations and assumptions deemed reasonable by, the Company at the time this presentation was made. Although the Company believes that the assumptions
underlying such statements are reasonable, it can give no assurance that they will be attained. The Company undertakes no obligation to update any forward-looking
statements, whether as a result of new information or future events, unless it is required to do so under the securities laws. The Company makes no prediction or statement
about the performance of its units, warrants or common stock. For the selected financial data presented herein, the Company compiled consolidated statements of income
for the three and six month periods ended June 30, 2013 and June 30, 2012.
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2 2
IPO – July 2008
(NYSE:NNA)
Raised $253.0 million
gross proceeds
2008
Acquired 13 Product
& Chemical Tankers
and 2 options – May
2010
$457.7 million
Acquired 7 VLCC
Tankers with long-term
charters to strong
counterparties –
September 2010
$587.0 million
2009 2010
Warrant Program –
September 2010
Raised $78.3
million and
simplified equity
capital structure
2013
Bond Issued – October 2010
$400.0 million
8.625% Mortgage Notes due 2017
Acquired 2
LR1 NB
Product
Tankers –
October 2010
$82.8 million
Equity Offering –
November 2010
Raised $35.8
million gross
proceeds
6.5 million
shares issued
NNA Operating History
Bond Additional
Issue – May 2011
$105.0 million
8.625%
Mortgage Notes
due 2017
Acquired 2 MR2 on the
water Product Tankers –
June 2011
$84.8 million
Exercise of
Options for 2
LR1 NB
Product
Tankers –
July 2011
$81.0 million
2011
Acquired 3 MR2
NB Product
Tankers –
January 2012
$106.5 million
2012
Equity Offering –
February 2013
Raised $100.5
million gross
proceeds
35.2 million shares
issued
Acquired 4 in
the water and 3
NB MR2
Product
Tankers – April
2013
$176.8 million
Acquired 10 vessels
from HSH Bank in
Joint Venture (47.5%)
with NM and NMM –
April 2013
Equity Offering – May 2013
Raised $120.0 million gross proceeds
32.9 million shares issued
Exercise of
Options for 2
MR2 NB
Product
Tankers – June
2013
$63.0 million
Acquired 2
Chemical
Tankers –
June 2013
$67.2
million
Acquired
1 VLCC –
July 2013
$35.4
million
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Company Highlights
Large, Modern and
Diverse Tanker Fleet
41 owned vessels (29 in the water), 12 to be delivered (10 newbuildings)
Modern high-quality fleet with an average age of 4.7 years
Diverse portfolio of 8 VLCC, 8 LR1, 21 MR2 and 4 Chemical Tankers
Proprietary Deal Flow
Built in Growth
Access to distressed deals through strong relationships with banks
Available revenue days will grow from 5,786 days in 2012 to 12,596 days in
2014 (118% growth in available revenue days)
14 product tankers delivering throughout 2013, 5 in 2014 and 2 in 2015
Long-Term Cash Flow Visibility
with Strong Counterparties
93.6% of revenue days fixed in 2013 - $188.4 million
62.8% of revenue days fixed in 2014 - $169.8 million
Average duration of all charters of 2.4 years
Diverse group of first-class charterers (DOSCO, Shell, Koch, Vitol, Formosa)
Well Positioned to Capture
Product Tanker Market Upside
44% of product tankers revenue days open in 2014 and 70% in 2015
84% of entire contracted fleet and 88% of product tanker contracted fleet has
profit sharing
Every $1,000 of profit share above base rate provides $8.0 million free cash
flow or $0.07 per common share annualized
Low Cash Flow Breakeven
Full cost of entire fleet covered from existing long-term charters for 2013
Operating expenses below the industry average; fixed until mid-2014
Low financing cost through distress deals with banks
Seasoned Management Team
with Strong Capital Market
Presence and Track Record
Strategic relationships with shipyards, banks and key industry players
Average industry experience of 20+ years per person
NNA has raised about $1.1 billion in capital markets
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$342.3 million in vessel acquisitions YTD 2013
9 product tankers - $239.7 million
2 chemical tankers - $67.2 million
1 VLCC - $35.4 million
EBITDA growth - Brand name attracts quality counterparties and attractive charters
~ $114.6 million 2013 EBITDA run rate (based on H1 2013 EBITDA)
$ 33.6 million additional annualized EBITDA from chartered vessels
− $25.1 million annualized base EBITDA from 10 contracted product tankers delivering in 2013(1)
− $ 8.5 million annualized base EBITDA from 3 contracted product tankers delivering in 2014(1)
Incremental EBITDA from six unchartered product tankers delivering in 2013 - 2015
Profit sharing captures market upside
Q1 2013 profit sharing from product tankers = $2.1 million
Q2 2013 profit sharing from product tankers = $0.9 million
− Profit sharing: 84% of entire contracted fleet; 88% of contracted product tanker fleet
Access to financing
$220.5 million equity raised in 2013
$88.8 million bank debt used to finance 3 product tankers and 2 chemical tankers
4
Strong Competitive Positioning
(1) Assuming current operating costs and 360 revenue days per year
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Access to distressed deals - ability to acquire vessels at favorable prices
Deals with banks
− HSH transaction provides a compelling opportunity to acquire vessels through distressed deals
(five product tankers and five container vessels)
Deals with shipyards
− 4 newbuilding Eco Type MR2 product tankers, built in South Korea delivering in 2014 and 2015
− 2 chemical tankers, 2013-built in South Korea
Deals with ship owners
− 2 MR2 product tankers, 2005-built in Japan
− 2 MR2 ice class 1A product tankers, 2007-built in South Korea
− 1 newbuilding Eco Type MR2 product tanker, built in South Korea delivering in 2013
− 1 VLCC 2003-built in South Korea
5
Executing Responsible Growth Strategy
31,525 54,285
121,403 152,086
0
50,000
100,000
150,000
200,000
Q3 2012 Q4 2012 Q1 2013 Q2 2013
Average Daily Trading Volume Building shareholder base
Trading volume increased by 382% since
Q3 2012
Share price appreciated 54.7% YTD
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HSH Transaction Update
Formation of Navios Europe Inc.
The Navios Group, composed of Navios Maritime Holdings Inc. (NYSE: NM), Navios Maritime
Acquisition Corporation (NYSE: NNA) and Navios Maritime Partners L.P. (NYSE: NMM) formed
Navios Europe Inc. as the next step in concluding the letter of intent signed with HSH Nordbank AG
("HSH") in April of 2013
Navios Europe, which will initially acquire five product tankers and five container vessels from debtors of HSH, will be owned 47.5% by NM, 47.5% by NNA and 5% by NMM
– It is anticipated that funding requirements will be satisfied in the same percentages
Management of Vessels
In August 2013, Navios Europe arranged technical and commercial management for five out of the
ten vessels. To date, the following vessels were delivered:
– Esperanza N a 2,007 TEU Sub-Panamax Container built in 2008
– Harmony N a 2,824 TEU Sub-Panamax Container built in 2006
– Three tanker vessels are also expected to be delivered through September 2013
Closing
Navios Europe is expected to take ownership of all 10 vessels by November 1, 2013, at which point
management of the remaining vessels will be transferred as well
Strategic Partnership
HSH and Navios are committed to their excellent working relationship. After the completion of this
transaction, HSH and Navios hope to work together toward similar transactions.
6
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Nave Celeste to replace 1996 built Shinyo Navigator and take over existing contract
for the remaining duration
− Charter rate: $42,705 net per day until Dec 2016
$35.4 million acquisition price historically low for 10 year old VLCC
Shinyo Navigator due for dry docking in Nov 2013
− NNA to save dry docking expenses as well as an estimated 30 days off hire
Shinyo Navigator will be substituted by the Nave Celeste as collateral under the bonds
due in 2017
− As a result, an estimated $13.0 million additional value will be added to the existing collateral
package
7
Acquisition and Delivery of Nave Celeste VLCC
Vessel Type DWT Year Built Yard Delivered
Nave Celeste VLCC 298,717 2003 S. Korea August 12, 2013
Replacing a 17-year old VLCC with a 10-year old vessel with only nominal additional cost
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46.4 57.3
H1 2012 H1 2013
73.5
97.5
2011 2012
Vessel Deliveries Continue to Provide Material Growth
4,053
5,786
9,646
2011 2012 2013
Available Days
8
67%
43%
121.9
151.1
188.4
2011 2012 2013
Contracted Revenue (m USD)
25% 24%
100%(1) 100% 93.6% 23%
33%
14
19
34
2011 2012 2013
Fleet
79%
36%
(1) % of fixed days
(2) Excludes the effect of $3.7 million compensation fee for early charter termination
(2)
EBITDA (m USD)
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2013-2015: Twelve Vessels to be Delivered
Capex Fully Funded
Vessel Anticipated Delivery Date DWT
Nave Constellation Chemical Tanker Q3
2013
45,000
Nave Alderamin MR2 Product Tanker Q3 50,000
Eco Type MR2 Product Tanker Q3 50,000
Nave Dorado MR2 Product Tanker Q3 47,999
Nave Lucida MR2 Product Tanker Q4 47,999
Eco Type MR2 Product Tanker Q1
2014
50,000
Eco Type MR2 Product Tanker Q3 50,000
Eco Type MR2 Product Tanker Q3 51,200
Eco Type MR2 Product Tanker Q4 51,200
Eco Type MR2 Product Tanker Q4 50,000
Eco Type MR2 Product Tanker Q1 2015
51,200
Eco Type MR2 Product Tanker Q2 51,200
Aggregate Cost = $366.3 million
Financing = ($247.2 million*)
Equity already paid = ($35.2 million)
Remaining Balance = $83.9 million
2013 = $24.1 million
2014 = $53.6 million
2015 = $6.3 million
(*) Includes $97.1 million financing for 6 MR2 Product Tankers delivering in 2013, 2014 and 2015, under approval process
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10
Strong Liquidity Position
Cash(1) 120.6
Debt 1,016.1
Shareholders' Equity 425.9
Capitalization 1,442.0
Net Debt / Capitalization 62.1%
June 30, 2013 (in m USD)
Available Credit Lines
40.0
Cash(1) 120.6
Total Liquidity 160.6
(1) Includes restricted cash
- - -46.5
544.2
32.0 95.1 116.8
0
100
200
300
400
500
600
2013 2014 2015 2016 2017 2018 2019 2020+
No significant debt maturities until 2017
(m USD)
Company deleveraged by 19%
since December 31, 2012
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$7,663 $7,347
$564 $479
$6,303 $5,157
$2,672 $3,283
$20,869 $21,457
11
Cash Flow Cushion from Low Breakeven
2014 – 62.8% Fixed 2013 – 93.6% Fixed
Average Contracted Daily Charter-Out Rate
Opex (incl. dry docking) General & Administrative Expenses Interest Expense Capital Repayments
2013 E
$17,202
2014 E
$16,266
Cost Revenue
− Breakeven includes operating expenses as per Management Agreement inclusive of dry docking, general and administrative expenses, interest
expense and capital repayment
− Total Available Days of Fleet: 9,646 for 2013; 12,596 for 2014
Fully
Loaded Cost
Fully
Loaded Cost
Breakeven Analysis 2013
Total fixed revenue 188,449,893
Total cost (165,926,657)
Surplus of revenue over cost 22,523,236
Open days 616
Impact on revenue per $1,000 day rate 616,000
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12
Fleet Update
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13
Recent Developments
Delivery of 10 Vessels YTD 2013
1 VLCC
2 LR1 and 6 MR2 product tankers
1 chemical tanker
MR2 Product Tanker Chartered out for 4 years – Charter Rate = $15,356 net per day plus 100% profit based on an index, with a ceiling of $20,475 net per day
– Charter base and ceiling rates will increase 2% per annum
– Annual base EBITDA for the first year = $3.2 million(1); Aggregate base EBITDA = $13.5 million(1)
Buddy and Bull MR2 Product Tankers rechartered(1) for 1 + 1 year – Charter Rate = $13,825 net per day first year; $14,813 net per day optional year
– Annual EBITDA = $2.7 million(2) per vessel
Extension of charters for Nave Cosmos and Nave Polaris Chemical Tankers for 1 year – Charter Rate = $12,188 net plus 50% profit sharing; Annual base EBITDA = $2.1 million(1) per vessel
Extension of charters for Nave Cassiopeia, Nave Cetus and Nave Cielo LR1 Product
Tankers for 6 months – Charter Rate = $11,850 net plus 50% profit sharing; Base EBITDA = $0.8 million(1) per vessel
3 MR2 Product Tankers delivering 2014 Chartered out for 2 years – Charter Rate = $14,319 net per day plus 50% profit sharing; $15,306 net per day optional year plus 50% profit sharing
– Annual base EBITDA = $8.5 million(1); Aggregate base EBITDA = $17.0 million(1)
(1) The charter contracts for these vessels since delivery have been terminated following the default of the original charterer and the vessels have been re-chartered to a
third party for a one year period
(2) Assuming current operating costs and 360 revenue days per year
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Vessel Type DWT Built Yard Acquisition
Price (million)
Delivery
Nave Equinox
MR2 Product Tanker
50,922 2007 S. Korea $23.2 Q2 2013
Nave Pulsar 50,922 2007 S. Korea $23.2 Q3 2013
Nave Dorado 47,999 2005 Japan $16.5 Q3 2013
Nave Lucida 47,999 2005 Japan $16.5 Q4 2013
TBN1
MR2 Eco Product Tanker
50,000 2013 S. Korea $34.3 Q3 2013
TBN2 51,200 2014 S. Korea $31.5 Q3 2014
TBN3 51,200 2014 S. Korea $31.5 Q4 2014
TBN4 51,200 2015 S. Korea $31.5 Q1 2015
TBN5 51,200 2015 S. Korea $31.5 Q2 2015
Nave Universe Chemical Tanker
45,513 2013 S. Korea $33.6 Q3 2013
Nave Constellation 45,000 2013 S. Korea $33.6 Q3 2013
Nave Celeste VLCC 298,717 2003 S. Korea $35.4 Q3 2013
14
Recent Developments (Cont’d)
2013 YTD Acquisitions - 12 Vessels
Purchase Price $ 342.3 million
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29 Product Tankers 4 Chemical Tankers 8 Crude Tankers
Vessel Sizes
in NNA Fleet
8 LR1 product
tankers
(60,000 –
85,000 dwt)
21 MR2 product
tankers
(47,000 – 52,000
dwt)
Chemical tankers
(25,000 - 45,000 dwt)
VLCC tankers
(280,000 – 320,000 dwt)
Commodities
Transported
Refined petroleum products
(naphtha, gasoline, kerosene, jet fuel)
Liquid bulk chemicals
(Organic/inorganic
chemicals, vegetable
oils and animal fats)
Crude Oil
Key Trades
North Sea
Caribbean
Mediterranean
Indo-Pacific
Middle East major
export zone
Far East and S. East
Asia major import zone
US/Europe and Far
East
Primarily long-haul
routes
AG to Japan / China
AG to US Gulf
W.Africa to US E. Coast
Large, Modern and Diverse Tanker Fleet
41 Vessels (4.2 million dwt)
15
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93.6%
62.8%
39.8%
0%
20%
40%
60%
80%
100%
2013 2014 2015
Chartering Strategy Maximizes Earning Capacity
$20,869 $21,457
$24,316
$10,000
$15,000
$20,000
$25,000
$30,000
2013 2014 2015
1,104
4,053
5,786
9,646
12,596
14,419
0
3,000
6,000
9,000
12,000
15,000
2010 2011 2012 2013 2014 2015
Time charter-out strategy provides high utilization rates, operating visibility and upside
16
Total Available Days % Days Contracted Average Daily Charter-out Rate
44% of Product Tankers available days open in 2014 and 70% in 2015
88% of contracted Product Tanker fleet has profit sharing
Every $1,000 from profit sharing above base rate provides $8.0 million
Free Cash Flow or $0.07 per share annualized
Well Positioned to Capture Product Tanker Market Upside
2012: $151.1 million
2013: $188.4 million
2014: $169.8 million
2015: $139.6 million
Contracted Revenue
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-5,000
0
5,000
10,000
15,000
20,000
Q1/12
Q2/12
Q3/12
Q4/12
Q1/13
Q2/13
NNA LR1 Base Rate
BCTI TC5-TCE
NNA LR1 Including Profit sharing
17
Capturing the Upside While Protecting the Downside
MR2 Product Tankers(2) LR1 Product Tankers(1)
Period chartering strategy provides cash flow visibility and protection from downward volatility
Profit sharing captures market movements above the contracted base rate
(US$ per day) (US$ per day)
(1) Indicative profit sharing benchmarking of Nave Andromeda and Nave Estella with BCTI - TC5 index
(2) Indicative profit sharing benchmarking of Nave Atria and Nave Aquila with BCTI TC2_37 index
(3) Days contracted with profit sharing element
1H 2013 Per Contracted Day (3) LR1 Product Tankers MR2 Product Tankers Chemical Tankers
(1) Net Income and EPS for the 3 and 6 months ended June 30 2013 have been adjusted to exclude $1.6 million accelerated amortization of intangible assets associated with charter out contracts of 2 MR2 vessels, following charterers’ default
(2) Revenue for the three month period and the year ended December 31 2011 has been positively affected by $3.7 million of compensation fee for early charter termination
(2)
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Strong Balance Sheet
(1) Including Restricted Cash
Selected Balance Sheet Data
(in $ million) June 30, 2013 December 31, 2012
Cash & cash equivalents (1) 120.6 64.0
Other current assets 10.4 7.8
Vessel deposits 163.0 276.1
Vessels, net 1,149.5 940.7
Intangible assets other than goodwill 45.3 51.2
Total Assets 1,515.8 1,370.6
Current portion of long term debt 28.0 19.7
Other current liabilities 22.6 48.1
Long term debt, net of current portion 988.1 1,009.4
Stockholders Equity 425.9 225.3
Total Liabilities and Shareholders Equity 1,515.8 1,370.6
Book Capitalization 1,442.0 1,254.4
Net Debt / Book Capitalization 62.1% 76.9%
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Returning Capital to Shareholders
Dividend Policy:
Q2 2013 Distribution: $0.05 per share – Record date: September 18, 2013
– Payment date: October 3, 2013
– Shares entitled to dividend as of June 30, 2013: 108,640,916
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36
Financial Highlights
Prudent Financial Strategy
Ability to Access the
Capital Markets Through
the Cycle
Raised over $2.1 billion of debt and equity since
inception to finance tanker investments
Navios has a proven track record raising capital in the
debt and equity markets
Strong Liquidity Position
High Cash Flow Visibility
Long-term contracts with high-quality counterparties
secure revenue above fleet cash breakeven
Upside through growth in available days and profit
sharing
Focus on risk management
Long-term non amortizing debt in capital structure
Strategic chartering of newbuilds through recovery
Debt with attractive margins and amortization profile
All vessels to be delivered are fully financed
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37
Appendix
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38
Existing Fleet – Product & Chemical Tankers Vessel Type DWT
Nave Cosmos Chemical Tanker 25,130 2010 12,188 Aug-14 50%/50%
Nave Polaris Chemical Tanker 25,145 2011 12,188 Jul-14 50%/50%
TOTAL 1,196,621
(1) Charterer’s option to extend the charter for 6 months at same rate.
(2) Charterer’s option to extend the charter for 1+1 years at $11,850 net 1st optional year plus 90% profit up to $16,000 plus 50% profit sharing above $16,000; $11,850 net 2nd optional
year plus 90% profit up to $17,000 plus 50% profit sharing above $17,000. Profit sharing formula is calculated monthly and incorporates $2,000 premium above the relevant index.
(3) Charterer’s option to extend the charter for 1+1 years at $13,000 net 1st optional year plus 100% profit up to $16,000 plus 50% profit sharing above $16,000; $14,000 net 2nd optional
year plus 100% profit up to $17,000 plus 50% profit sharing above $17,000. Profit sharing formula is calculated monthly and incorporates $2,000 premium above the relevant index.
(4) Charter duration three years. Charterer's option to extend the charter for 1 year at $15,306 net plus profit sharing. The charterers will receive 100% of the first $1,000 in profits above
the base rate and the owners will receive 100% of the next $1,000. Thereafter, all profits will be split equally to each party.
(5) The charterer will receive the first $1,000 of profits above the base rate and the owner will receive next $1,000 of profits. Thereafter, all profits will be split equally to each party. The
charterer has been granted an option for an additional year at a rate of $14,813 net per day plus 50% profit sharing.
(6) Charterer’s option to extend the charter for 1+ 1 years at $14,566 net 1st optional year plus profit sharing; $15,553 net 2nd optional year plus profit sharing. The profit sharing will be
calculated monthly and profits will be split equally to each party. Profit sharing formula incorporates $1,000 premium above the relevant index.
(7) The charterer has been granted an option for an additional year at a rate of $16,088 net per day, plus 50% profit sharing
(8) Charterer’s option to extend the charter for 1 year at $14,813 net
(9) The charter contracts for these vessels since delivery have been terminated following the default of the original charterer and the vessels have been re-chartered to a third party
(1) The charterer has been granted an option for an additional year at a rate of $16,088 net per day, plus 50% profit sharing
(2) Charter duration six months
(3) Charter duration 4 years, rate can reach a maximum of $20,475 net per day calculated based on a formula, both base and ceiling rate , increased by 2% annually
(4) Charter duration 2 years
(5) The charterer has been granted an option for an additional year at a rate of $15,306 net per day, plus 50% profit sharing
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2
4
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>=20 yrs >=25 yrs
41 41 41
Chemical Ship Supply Fundamentals are Improving Orderbook
World chemical tanker orderbook (million dwt – Jan 2013)
Source: Drewry July 2013
Aging chemical tanker fleet (million dwt)
(mil
lio
n d
wt)
3.6 2.5
0.6
6.6 4.8
3.4
0
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015+
40%
8.1
0.7%
(million dwt)
Growth before slippage
as % of Jan 2013 fleet: 4.1% 2.9%
24% 4.5
40%
Non-deliveries
10.9
Delivered
(M DWT)
Projected
(M DWT)
Non-Del’y
(by DWT)
2013 2.5 2.4 -1%
2012 3.4 4.5 25%
2011 4.9 8.1 39%
2010 6.6 10.9 40%
2009 9.2 10.8 15%
Fleet Development
2Q2013 Chemical Tanker Fleet = 87.6 M dwt
2012 Chemical Tanker Fleet = 86.6 M dwt
2011 Chemical Tanker Fleet = 83.0 M dwt
2010 Chemical Tanker Fleet = 79.4 M dwt
Net Fleet Growth
2Q2013 Net fleet growth was 1.0 M dwt or 1.2%
2012 Net fleet growth was 3.6 M dwt or 4.3%
2011 Net fleet growth was 3.6 M dwt or 4.6%
2010 Net fleet growth was 4.4 M dwt or 5.8%
Scrapping
2Q2013 Scrapping = 1.5% of fleet / 1.3 M dwt
2012 Scrapping = 2.5% of fleet / 2.1 M dwt
2011 Scrapping = 2.7% of fleet / 2.1 M dwt
2010 Scrapping = 3.7% of fleet / 2.8 M dwt
Age Profile
465 vessels are 20+ years old – 11.4% of the fleet
