CBL International Limited

Good morning, ladies and gentlemen. I'm Venus Zhao, Investor Relations and Public Relations Director of CBL International Limited. Thank you for joining the 2034 Intro Results Webcast of CBL International Limited. Before we begin, I'd like to remind you that today's presentation will include forward-looking statements made pursuant to the Safe Harbor Provision of the Private Securities Litigation Reform Act 1995. These statements are subject to the risks and uncertainties that could cause actual results to differ materially from our expectations. Today's meeting will be conducted in English with simultaneous translation into Mandarin. We'll begin with the presentation, followed by the Q&A session. You can find the presentation deck on the webcast page and in the investor relations section of our company website. We're excited to introduce you to the key members of our leadership team who are driving our vision forward. Let me introduce our speakers for today's session. We have Mr. Tianlin Cha, the Group Chairman and CEO, Mr. Raymond Chu, our Chief Financial Officer, and myself, Ms. Venus Zhao, Director of Investor Relations and Public Relations. Please allow me to give a presentation of our interim results. We will divide it into five chapters, Company Introduction, Investment Highlights, Financial Review, Operational Review, Strategic Initiatives, and Market Outlook. The first chapter is the company introduction, who we are. CBL International Limited, NASDAQ ticker BANL, is the listing vehicle of Banner Group, a reputable marine fuel logistics company based in the Asian Pacific region that was established in 2015. We are committed to providing customers with one-stop solution for vessel refueling, which is referred to as bunkering facilitator in the bunkering industry. Our clients are international container liners, bulk carriers and tankers We facilitate vessel refueling mainly through local physical suppliers in 60 plus ports worldwide in Asia Pacific, Europe and Africa We are top two players in both the Hong Kong and China bunker facilitating markets in 2023 We are committed to sustainable fuel solutions This short corporate video will give you a comprehensive overview of our company's operation. I hope this video provides valuable insights into who we are and the exciting opportunities that lie ahead. Please enjoy.

Starting 2015, we served mainly the world's top 20 international container liner operators. We are providing customers with options to get their vessels refueled in more than 60 refueling ports worldwide. We are Bonley. Our services cover the majority of the ports in the fast-growing market of Asia-Pacific, which includes our customers' sailing routes along the Euro-Asia route, Inter-Asia route, and Trans-Pacific route. We have established an extensive supply network to provide our customers with more options and flexibility in fulfilling their vessel refueling requirements. Our establishments include Kuala Lumpur, Hong Kong, Shenzhen, Seoul, Labuan, Singapore, London, and Dublin that forms a network which currently covers more than 60 ports worldwide. Customers can customize the best quality bunkering services and select the most convenient port. Our business is built with a customer-oriented culture and focuses on providing marine fuel with our professional and reliable bunkering services at competitive price, as well as helping customers whenever they are dealing with contingencies. In 2023, we marked the listing on NASDAQ. In support of international maritime organizations' decarbonization initiatives, we have obtained both the ISCC EU and ISCC Plus certifications. This enables us to support the industry's collective efforts towards the net-zero journey. Moving forward, we intend to allocate more resources to further expand our supply network targeting at the continual market share enhancement. We have positioned ourselves as one of the pioneers in providing stable biofuel supply at major ports during this transition period. Simultaneously, we will continue to explore various green and sustainable marine fuel solutions for our customers. We endeavor to ensure that our customers can continue their voyages safely and with confidence. We are Bonley.

Let's continue. According to UNCTAD, total seaborn trade and containerized trade are forecast to grow 2.1% to 2.2% and 2.9% to 3.2% per annum from 2024 to 2028 respectively. According to BINCO, container volume for all trade is forecasted to grow 5% and 6% respectively in 2024 and 2025. According to Frost and Sullivan, Asia and Oceania accounted for 70% of global container port throughput in 2023. CBL's Bunkering Operations Network presence has covered 9 out of the top 10 global container ports in 2023. The ongoing Red Sea crisis, which began in October 2023, has significantly impacted the maritime routes due to geopolitical tensions and conflicts in the region. The reduction in traffic through critical conduits such as the Suez Canal and Bad Almenda Strait has forced ship owners and charterers to reroute vessels, leading to increased transit times and operational costs. The voyage from Rotterdam to Shanghai increased from 25.5 days to 34 days. Freightways on affected routes have surged due to these disruptions, as shipping companies face longer voyage and higher insurance premiums. This disruption has also had a significant impact on the bunkering industry. The demand for bunker fuel in Asia Pacific and Western Europe has risen sharply due to the rerouting of vessels around the Cape of Good Hope and other longer routes. Ports in regions such as China, Singapore, Mauritius and Cape Town have experienced a surge in bunkering volumes, driven by the need for vessels to refuel more frequently along these extended routes. This increased demand has led to greater price volatility with the price of low sulfur bunker fuel on roads rose immediately after the crisis began and began to stabilize and decline somewhat Even though they remain higher than pre-crisis level the decrease is attributed to the market adjusting to the new demand patterns and reopening of certain supply chains Moving on to what makes CBL stand out Bunkering is the critical process in maritime logistics, and we excel at it. Our primary role is to bridge the gap between ship operators, oil traders, and physical distributors. We handle all the logistics required to refill vessels, including obtaining and comparing quotations, negotiating prices, arranging physical delivery, and managing any airport occurrences that arise. The value we provide to our clients is significant. By acting as a single point of conduct, we reduce the administrative burden and time cost for ship operators, offer favorable pricing through demand aggregation, and provide flexibility to manage unexpected events. We are not just delivering fuel. We are delivering a comprehensive, reliable service that ensures our customers' vessels stay on schedule and operational. Let's draw into balanced business model, which is built around efficiency and scalability. We operate on cost plus pricing mechanism, ensuring the positive gross profit on every transaction. This model not only secures our profitability, but also allows us to offer a premium service to our clients. Our extensive server network, now spanning over 60 ports, is key to capturing additional business opportunities. This network provides our customers with the flexibility they need to refuel at convenient locations across the globe. Achieving economy subscale allows us to lower our unit operating costs. than is also an asset-like company. We practice just-in-time inventory management, which minimizes our fixed asset investment and reduces financial risk. Our deep relationships with suppliers and our possession of all necessary licenses further enhance our operational capabilities. Lastly, our operational efficiency is evident in our rapid cash flow and the fact that we maintain no long-term debt on our balance sheet. We minimized interest expenses from accounts receivable factory. These factors contribute to our ability to remain agile and responsive to market needs, ensuring that we can continue to grow sustainably. Let's move on to our investment highlights. Now we summarize the key investment highlights of Bentley International. These highlights are the pillars of our growth strategy and our value proposition to investors. First, our growth track record speaks for itself. We've achieved a revenue kicker of 23% from fiscal year 2020 to fiscal year 2023, demonstrating our ability to expand and capture market share even in challenging environments. Second, our financial health is strong. We are in a position with access to bank facilities and positive free cash flow. This financial health not only supports our ongoing operations, but also enables us to seize new opportunities as they arise. Third, we pride ourselves on our operational efficiency with high liquidity. Fourth, we hold a leading market position in key markets, particularly in Hong Kong and China. Our strong relationships with top-tier clients and our expansive service network give us a competitive edge. Finally, our growth potential is significant. We are not just expanding our network, we are also innovating in areas like sustainable fuels, which positions us for longer-term success in an evolving industry. Let's move on to the next part, financial review. Let's take a closer look at our financial performance for the first half of 2024 Our revenue grew by an impressive 44.4% year-on-year reaching US$277.2 million This growth was largely driven by a 39.4% increase in sales volume as we expanded our global supply network and tapped into rising demand from both existing and new customers Our current ratio stands at 1.51, reflecting our strong liquidity position. Additionally, our cash balance increased by 30.9% to $9.7 million, further strengthening our financial stability. Our capital days is minus 3.6 days, and free cash flow has increased by 131.8% to $2.3 million. The reduction in capital days indicates that we are managing our account payable and account receivables more effectively, leading to faster turnover and enhanced operational efficiency. The significant increase in free cash flow reflects our improved cash flow management, providing us with greater financial flexibility for investment and growth opportunities. Driving deeper into our financial results, our revenue of US$277 million represents a significant increase of 44.4% compared to the first half of 2023 This significant growth was driven by a 39.4% year-on-year increase in sales volume attributed to the expansion of our global supply network and higher marine fuel demand due to geopolitical factors However, our gross profit declined by 32.2% to $2.71 million, primarily driven by the reduction in premium sold to customers and led to lower gross profit per ton, which was partially offset by an increase in volume sold. Our operating expenses rose by 64% to $4.12 million, driven by higher selling and distribution expenses related to our sales growth, strategic investment expansion into our supply network to new geographic areas and development of our biofuel operations. These expenses are necessary for our long-term growth and are expected to yield positive returns in the coming years. Our net loss of 1.62 million USD was driven by lower gross profit margin and higher operating costs. Despite these challenges, we are confident in our ability to navigate the current market environment and return to a path of improved profitability as we continue to scale and optimize our operations. Let's now examine our revenue breakdown by geographic location. China and Hong Kong remain our largest markets, contributing 51.3% and 34.8% of our revenue in first half of 2024, respectively. Malaysia and Singapore also play important roles in our regional portfolio, accounting for 10.9% and 2.3% of our revenue. We have seen strong revenue growth across all these regions, with Singapore, Hong Kong, Malaysia, China and South Korea experiencing a year-on-year growth of 150%, 52%, 41%, 38% and 25% respectively. This geographic diversity not only strengthens our market presence, but also helps mitigate risk by spreading our revenue sources across multiple key markets. Our continued focus on expanding our network and customer base in these regions is expected to drive future growth and solidify our leadership position. Finally, let's review the key highlights of our balance sheet as of June 30, 2024. We maintain a highly liquid capital structure, with cash accounting for 41% of our net assets. This solid cash reserve not only provides us with financial stability, but also enables us to seize opportunities as they arise. We operate on a debt-free basis with zero long-term borrowings. Instead, we leverage available non-recourse factoring facilities, which allows us to maintain liquidity without incurring debts. This approach minimizes financial risk and position us favorably in the market. Our commitment to just-in-time inventory management further enhances our cash flow and avoids storage risk This strategy not only improves our operational efficiency but also aligns with our goal of maximizing profitability We also maintain a lean asset base with minimum fixed assets This strategy allows us to maintain agile and responsive to market changes reducing overhead costs and enhancing our overall efficiency Finally, our rapid cash conversion cycle is a testament to our efficient operations. We engage mostly in short-term activities transactions with efficient operation. In summary, our balance sheet reflects a company that is not only financially stable, but also strategically positioned for sustainable growth in the years ahead. Now, let's review the company's operational performance. Let's talk about one of the key drivers of our recent success, our service network expansion. Since our IPO in March 2023, we've significantly expanded our global service network from 36 ports to over 60 ports across Asia. Europe and Africa. This expansion has been instrumental in enabling us to serve a broader customer base and meet the growing demand for our services. One of the notable milestones in this expansion is the opening of our new office in Ireland in late 2023. This strategic move has bolstered our market coverage in Europe and enhanced our local sourcing capabilities, positioning us to better serve our customers in this region. Additionally, we successfully launched bunkering services through local physical suppliers in new locations. including our inaugural services in Mauritius, Africa in May 2024. This further extends our reach and demonstrates our commitment to growing our footprint in key markets around the world. Now, let's dive into our sales volumes and oil prices per metric ton on our business. In the first half of 2024, our sales volume surged by 39.4% compared to the same period in 2023. This growth was driven by the expansion of our service network and the rising demand from both existing and new customers. In the first 6 months of 2024, the average bunker prices per metric ton increased by 3.6%, compared to the same period last year. Our ability to serve 8 of the world's top 12 container shipping lines, which together account for 87.1% of global container fleet capacity, has been a major factor in this volume increase. Our increased market presence in key regions like China, Hong Kong, Malaysia and Singapore, along with our new port coverage in Africa and India, has contributed significantly to our strong sales performance. we implemented strategies to expand the service network to beyond our traditional geographic areas in Asia Pacific and Europe to Africa, and beyond container liner to include bulk and tanker businesses. As the global shipping industry moves towards decarbonization, Bentley is at the forefront of promoting sustainable fuels. In the first half of 2024, Benny's biofuel volumes and revenue increased by 84.6% and 95.8%, respectively, compared to the same period of 2023. with significant rights in this area. Having obtained ISCC EU and ISCC Plus certifications in early 2023, these certificates underscore our commitment to providing compliance and sustainable fuel options that meet the evolving needs of our customers and industry. In July 2023, we commenced our B24 biofuel operations in Hong Kong, followed by successful bunkering in Yantian, Shekou and Nansha in China, as well as Portland in Malaysia. The B24 biofuel plant offers a 20% reduction in greenhouse gas emissions compared to conventional marine fuels, making it an attractive option for ship operators looking to reduce their carbon footprint. Looking ahead, we plan to further expand our biofuel supply capabilities and explore other sustainable fuel options. Our work in biofuels is expected to facilitate the transition from fossil fuels to sustainable fuels, creating a second growth curve for Benin and positioning ourselves as a leader in the sustainable fuel market. Finally, let's take a closer look at our global service network and the extensive reach we have achieved. We are in the top two market share positions in both Hong Kong and China. As of the first half of 2024, Bentley is providing vessel refueling services in over 60 ports worldwide. This map illustrates our network which spans key locations across Asia, Europe, Africa, and beyond. Our presence in this strategic port ensures that we can provide timely and reliable refueling services to our customers. We are recognized by our business counterparts as a professional and trustworthy partner known for delivering flexible and integrated vessel refueling services. As we continue to expand, and strengthen our network, we remain committed to delivering high quality services that meet the needs of our customers and drive our growth. Looking ahead, Bentley is focused on helping ship operators navigate the energy transition and comply with increasingly stringent emission regulations. The IMO's EEXI, Energy Efficiency Existing Ship Index, and CII, Carbon Intensity Indicator regulations, along with the Fuel EU Marine Time Initiative, are driving the industry towards greener pathways. These regulations require significant reduction in greenhouse gas emissions with targets of 2% by 2025, 6% by 2030, and up to 80% by 2035. Ship operators that fail to comply with these regulations will face significant financial penalties. However, there is a growing demand from corporations to reduce their scope-free emissions, those generated by their supply chain and logistics operations. Benny is well positioned to help these companies achieve their sustainability goals by providing biofuels and other sustainable fuel options. Our B24 biofuel, for example, is a transitional product that allows ship operators to reduce their carbon footprint without making substantial investments in alternative fuel fleets. This flexibility is crucial, as many operators are hesitant to invest in new technologies due to the uncertainty of the market and existing depreciation timelines of their current assets. We are pioneers in promoting sustainable fuels in the Asia-Pacific region by leading the change in biofuel adoption and other sustainable practices. Benny is not only contributing to the decarbonization of the shipping industry, but also positioning itself for long-term success in a rapidly evolving market. We are not just focused on growth. We play an important role in the value chain, in the bunkering market. We have prominent local partners as our suppliers. Since the launching of our B24 biofuel operations in July 2023, we have successfully delivered these sustainable operations in Hong Kong, Shekou, Yantian, Nansha, and Portland. We strongly believe that biofuel is the inevitable trend during the energy transition from fossil fuels to sustainable fuels such as LNG, methanol, ammonia, or hydrogen, owing to biofuel's compatibility with traditional fuel oil engines without requiring additional hardware investment and sacrificing efficiency. In the future, we are also exploring other sustainable fuels such as LNG, Methanol and Ammonia, etc. to provide our customers, depending on market demand. Now, move on to the strategic initiatives and market outlook. As we look ahead, let me outline Bentley's strategic initiatives as well as our market outlook. First, expand service network, our recent actions, Strengthening the Asia-Pacific market, BANI has prioritized bolstering its presence in the Asia-Pacific region, where economic resilience is driving increased demand for shipping and bunkering services. Expanding into Europe and other regions, BANI is actively expanding into Europe and other regions, capitalizing on the robust demand for sustainable fuels driven by stringent environmental regulations and decarbonization targets. Second, maximize sales volume impact. Diversified offerings and enhanced market position. Bennett's efforts to diversify its field of offerings, including biofuels and sustainable fuels, have enhanced its market position. Increasing market share. Bennett's strategy is focused on increasing its market share by expanding into high growth regions. leveraging economics of scale. Benny's expansion allows the company to benefit from economics of scale. Third, explore sustainable future plans. Compliance with IMO and EU regulations. Benny is committed to aligning with the latest environmental regulations set by the International Marine Time Organization, IMO, and the European Union. Biofuel adoption. Benny is investing heavily in the adoption and expansion of biofuels, exploring other sustainable fuel options. In addition to biofuels, Benny is exploring alternative sustainable fuels such as LNG, methanol, and hydrogen. As we execute these strategies, we will also continue to monitor and manage risk effectively ensuring that we remain agile and responsive to market dynamics. Let's take a closer look at the market outlook and how it aligns with our strategic initiatives. The global green marine fuel market is expected to grow to $201.35 billion by 2030, with a staggering CAGR of 50.4% from 2023 to 2030. This growth is driven by increasing regulatory pressures and the global shift towards decarbonization. Benin is well positioned to capitalize on this trend. Our expanding service network, commitment to operational efficiency, and focus on sustainable fuel solutions put us at the forefront of this market transformation. We are also well prepared to navigate the challenges associated with oil price fluctuations and geopolitical conflicts. Our cost-plus pricing mechanism ensures that our profitability is not directly impacted by oil price volatility, while our proactive risk management framework allows us to adapt to changing market conditions. We will continue to enhance operational efficiency and cost control. In terms of strategic acquisitions and partnerships, we are exploring opportunities that enhance our operational capabilities and further strengthen our market position. By investing in technology and innovation, particularly in sustainable fuels, we are positioning Benley to lead the industry into a more sustainable future. With that, we conclude our presentation today. We've covered the Bentley strategic initiatives, our strong financial and operational foundation, and the exciting growth opportunities ahead, particularly in the rapidly expanding sustainable fuel market. I'd like to open the floor to any questions you may have. whether it's about our recent performance, our future plans, or the broader market environment. Please feel free to ask your questions and we will do our best to address them. Please type in your question in the Q&A box and we will read them aloud for management to address. Okay, I've seen some questions online. The question one is from Shenzhen Crossfield Asset Management, Newfoundland. And the question is, what is BANIS macroeconomic outlook for the remainder of 2024? This question I would like to ask Mr. William Trapp.