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TRANSPORTNational ShippingAlso known asNSCSAPriceSR17.3Pricing / Valuation as on May 27, 2009Mkt capSR5.4bn ($1,450.9mn)Sh. outstanding315.0mnKey statistics52 week range H/L (SR) 36.3/13.4Avg daily turnover (mn) SR US$3m 69.14 18.4612m 110.38 29.47Raw Beta 6m 3yr0.56 1.13Reuters4030.SEBloombergNSCSA ABPrice perform (%) 1M 3M 12MAbsolute (%) 2 5 (46)Market (%) 6 32 (39)Sector (%) 5 12 (43)Website: www nscsa.comValuation multiples2006 2007 2008P/E (x) 12.3 20.3 6.9P/B (x) 1.7 1.7 1.0P/Sales (x) 3.1 4.6 2.0Div yield (%) 4.4 4.0 9.1Weightage (%)TASI (free float weight) 0.81MSCI Saudi (domestic – mid cap) 8.37Free float (%)Free float 66.76Relative share price perf.11,000409,000307,000205,000103,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASIShipping (RHS)Top 5 shareholders (%)Public Investment Fund 28.1Source: NCBC ResearchNational Shipping Company of Saudi Arabia (NSCSA), established in 1979, isengaged in providing marine transport services primarily to the oil & gas andchemical sectors. Additionally, NSCSA provides liner (general cargo), shipmanagement, and container storage and repair services.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 1,602 1,651 1,703 2,595 52.3 17.4EBITDA SRmn 685 649 634 1,188 87.3 20.1Net Income SRmn 434 410 388 750 93.1 20.0Assets SRmn 4,834 5,997 7,797 9,819 25.9 26.6Equity SRmn 2,601 3,005 4,660 5,091 9.2 25.1Total Debt SRmn 1,665 2,372 2,432 4,007 64.7 34.0Cash & Equiv SRmn 300 197 191 226 18.4 (9.1)EBITDA Mgn % 42.7 39.3 37.2 45.8 - -Net Mgn % 27.1 24.8 22.8 28.9 - -ROE % 18.4 14.6 10.1 15.4 - -ROA % 9.3 7.6 5.6 8.5 - -Div Payout % - 54.9 81.1 63.0 - -EPS SR 10.9 1.8 1.2 2.4 93.1 (39.7)BVPS SR 65.0 13.4 14.8 16.2 9.2 (37.1)Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2007 Geographic 2007%Rev % Op Inc Breakup %Rev % Op IncCrude Oil 43.48 57.75 Saudi Arabia 100.0 100.0General Cargo 28.67 24.12Petrochemicals 27.85 18.13Source: Company, NCBC Research• Business brief: In the beginning of 2008, NSCSA had a fleet of 29 ships, (11 oiltankers, 11 chemical tankers and 4 general cargos). The company is likely to add sixVLCCs to its existing fleet by 2009. NSCSA operates its chemical tankers through its80% subsidiary, National Chemical Carriers. The company is expected to have a totalof about 50 VLCCs and chemical tankers by 2011. Along with transportation, thecompany offers ship management services for its own vessels through its whollyowned subsidiary, Mideast Ship Management.• Financials: In 2008, NSCSA’s sales increased 52.3% year-on-year; while net incomegrew 93.1% during the same period. Factors such as increase in crude oiltransportation and general cargo freight and deployment of new fleet of oil tankerscontributed to the growth in revenue.• Recent developments: In April 2009, the company reported a 12.7% year on yeardecline in the 1Q 09 net profit to SR151.1 mn. In the same month, NSCSA signed aSR1.05 bn Murabaha contact with the General Investment Fund, to finance theconstruction of eight oil transporters. In March 2009, NSCSA announced its plans toextend its network to the US (the port of Charleston, in South Carolina). In the samemonth, NCC sold off three of its chemical tankers to a Norwegian company andrealized a profit of SR27mn. NCC also leased out three VLCCs to Old DominionFreight Line, Inc in Norway.JUNE 2009THE NATIONAL SHIPPING CO248