CBL International Limited

Good morning, everyone, and welcome to CBL International Limited's interim result presentation for the period ended June 30, 2025. Today's meeting will be conducted in English with simultaneous translation into Mandarin. Before we begin, I'd like to remind you that today's presentation will include forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectation. Thank you for joining us today. I'm Venus Zhang, Investor Relations and Public Relations Director of CBL International Limited. Presenting alongside with me are Dr. Titling Cha, Chairman and Chief Executive Officer, and Mr. Nicholas Fung, Assistant Chief Financial Officer. We are excited to share our performance and achievements in first half 2025 and provide an outlook for fiscal year 2025. Let's begin with today's agenda. Our presentation will cover the following. First, company introductions. Second, market trends and geopolitical impact. Third, financial review. Four, operational review. Fifth, strategic initiatives and market outlook. And sixth, Q&A. Let me start with a brief introduction to CBL International. CBL International Limited, NASDAQ ticker BANL, is the listing vehicle of Barnley Group. a reputable marine fuel logistics company based in the Asian Pacific region that was established in 2015. We are a global marine fuel logistics provider operating under an asset-light business model. Our key services include fungary services across strategic global ports, supplying both fossil fuels and sustainable fuels, and serving container liners, bulk carriers, and tankers. We are recognized as professional and trustworthy by our business counterparties, delivering flexible and integrated vessel refueling solutions. Our competitive advantages include, first, global ports network. We operate in over 65 ports across Asian Pacific, Europe, Africa, and Central America. Second, supplier relationships. We maintain strong relationships, enable us to offer competitive fuel pricing, superior service, and operational efficiency. Third, customer relationship. With our extensive service, we can provide one-stop refueling solutions for customers, ensuring seamless service and operational efficiency. Fourth, growth strategy. We are focused on expanding our service network, increasing sales volumes, and integrating sustainable fuel solutions to meet involving market needs. This short corporate video will give you a comprehensive overview of our company's operation. I hope this video provides 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, intra-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 Bondly.

Okay, let's come back to our presentation. We maintain long-term strategic partnerships with global industry leaders and are recognized in the industry as a professional and trustworthy provider of flexible and integrated vessel refueling services. Through collaboration with reputable local partners, we consistently deliver high-quality services to our clients worldwide. This ensures access to efficient, reliable, and competitively priced bunker fuel solutions, meeting the diverse needs of the global maritime industry. Now, we move on to market trends and geopolitical impact. Let's continue. Seaborn trade and container volume have demonstrated steady growth, as shown in this review of maritime transport by United Nations. According to USCTAD, total seaborn trade grew by 2.5% in 2025, while containerized trade grew by 2.9%. Both are forecasted to maintain moderate annual growth rates through 2029. Shift supply increased by 6.1% in 2025, with demand growth by 3.5% to 4.5%. These numbers reflect a consistent recovery and expansion of global trade. CBL's Bunkering Operation Network aligns strongly with this trend. with a presence in 13 out of the top 15 global container ports, including 9 of the top 10 ports, such as Shanghai, Singapore, and Ningbo, Zhongshan. On the customer front, CBR serves 9 out of the top 12 global container liners, which represent a combined around 60% market share in global container liners. Let's move on to this slide, which highlights geopolitical tensions and market impacts. Global marine time trade faced significant disruptions in first half of 2025 due to geopolitical tensions. First, let's review the whole global economic landscape. The broader economic environment remains uncertain. The recent decline in oil prices, though a source of market uncertainty, directly eased our working capital. Sea bond trade showed moderate resilience, expanding by 1.5% in the first quarter and accelerating to a projected 2% in the second quarter. One of the notable disruptions in global shipping was the ongoing instability in the Red Sea. where vessels were rerouted via the Cape of Good Hope. This diversion extended Eurasia voyages by 10 to 14 days, resulting in an increased fuel consumption due to longer travel distances. Constantly, demand for bunkering services surged at alternative ports along these rerouted shipping lanes. The situation in Ukraine and the accompanying sanctions contributed to the instability in energy markets, prompting the European Union to seek alternatives to Russian fuel supplies. This shift added volatility to global oil prices, creating challenges in fuel supply and demand. U.S. trade policy, particularly the tariffs implemented in April 2025, significantly impacted global trade flows, leading to shift in shipping volumes. These tariffs redirected cargo from traditional routes, especially between China and the U.S. to alternative regions, such as intra-Asia and Europe-Asia. This adjustment increased demand for bunkering services along these alternative corridors, particularly in the Asia-Pacific and the Europe-Asia regions. Despite these challenges, the CPL team responded swiftly and strategically. We targeted the increased demand from rerouted vessels, ensuring that our strategic supply chain could meet this demand. Effectively responded by capturing this increased demand resulting in a notable rise in sales volumes across Asian Pacific and Europe. Reframing from supplying vessels subject to the sanctions that were outlined in the lowest list containing United Nations Securities Council consolidated list. Maintained operational efficiency positioning CBL can navigate both the economic uncertainties. Let's move on to our financial highlights. Here are the first half 2025 financial highlights showcasing CBL's strong performance. Total sales volume grew by 9.8%, while revenue decreased by 4.4% to $265.2 million U.S. dollars. Gross profit margin increased by 4 basic points to 1.02%, and net loss narrowed by 38.8%. Our current ratio of 1.54 demonstrates healthy liquidity, while capital dates at negative 4.44 highlight excellent cash cycle management. In the first half of 2025, CDR's revenue distribution and growth by geographic location highlight key market trends. China accounted for 67.5% of total revenue, followed by Hong Kong at 27.8% and Malaysia at 2.1%. with smaller contributions from Singapore, South Korea, and others. Compared to first half of 2024, revenue growth was seen 26% growth in China and 131% in others. CBL's strategic focus on establishing network to capture regional demands as they shifted, supported by macro C bond trade volume in China and Europe. Diving deeper into our financial results, revenue, CBL's total revenue decreased by 4.4%, reaching $265 million U.S. dollars. down from $277 million in the first half of 2024. The decrease was mainly attributable to the decrease in the marine fuel price, which was partially offset by the increase in the South Wall. Gross profit. Gross profit remained at a similar level, while gross profit margin slightly improved. We managed to maintain our gross profit with an increase in sales volume to cope with the challenging competition in the market. Operating expenses. Operating expenses decreased to 17%, from $4.12 million to $3.42 million. The decrease was due to harvesting the results of our investment in the past year on enlarging port network, expanding our customer base, and developing our biofuel operations and initiatives undertaken in the first half of 2025 to streamline operations. net income. Net income narrowed from a loss of $1.62 million in the first half of 2024 to a loss of $0.99 million in the first half of 2025. This 38.8% improvement was mainly driven by the reduction of operating expenses through the cost savings and the control initiatives in the operations during the period. CPL's high liquidity and financial flexibility have enabled sustainable growth in the first half of 2025. Working capital management. High liquidity strengthens the cash cycle and supports business operations. Bank facility. Ample bank facilities. A total of facilities, $50 million to fund future business expansion. debt, and leverage. Focus on maintaining low debt levels provides flexibility for future growth. Just-in-time inventory management. Optimize the cash flow, minimizes storage risk, and enhances efficiency. Minimum fixed assets. Maintain a lean asset base ensures operational agility. Let's move on to operational review. Global development is part of CBL's four-step strategy, and we have continued to see successful expansion since our IPO in 2023. As of June 30, 2025, CBL's global service network has expanded to 65 ports, an increase of 81%, marking a significant milestone in our growth strategy. The Asian Pacific region remained CBL's primary revenue driver, with key contributions from China, Hong Kong, Malaysia, Singapore, and South Korea. Volume attributable to deliveries in Asia-Pacific surged 9.1% year-on-year. Given several ports in Asia-Pacific are major global shipping hubs, 13 of the world's top 15 container ports in 2024. According to the Lotus List, fundraising operations in these regions account for a significant portion of deliveries. The expansion is especially evident in Europe, where our strategic focus on the ARA region has enhanced our market presence. we continue to develop our presence through our service network and maintain relationships with suppliers and customers. While current volumes in these regions remain steady, we are well positioned to scale operations in response to rising customer demand, ensuring we can meet market needs as they arise. In the first half of 2025, CBL achieved a 9.8% increase in sales volume, despite a challenging macroeconomic environment marked by fluctuating oil prices and geopolitical instability. This growth was fueled by the expansion of our service network, the successful acquisition of new customers, and a strategic shift towards non-continent liner segments. As of June 30, 2025, CBL serves nine of the world's top 12 container shipping lines, which contributed to nearly 60% of global container fleet capacity. The company's expanding customer base and broader service portfolio have reinforced its market position. Customer diversification Revenue share from top 12 liners increased to 60.1% versus 45.7% in the first half of 2024. Nut container sales, bulk, and tanker accounted for 36.9%. Top five customer sales concentration declined to 60.4% in the first half of 2025, versus 66.7% in the first half of 2024. New customers from 2024 and the first half of 2025 contributed to 11.9% in the first half of 2025 sales. In the biofuel sector, CBL achieved significant growth in sales and volume in the first half of 2025, biofuel sales saw an impressive increase of 154.7% year-on-year in the first half of 2025, with volume growth reaching 189.5%. This growth can be attributed to CBL's continued leadership in the sustainable fuel market, driven by the increasing adoption of biofuels among our customers. CBL has remained at the forefront of biofuel adoption, with increased sales volume in Singapore, Malaysia, Hong Kong, and various ports in China. Globally, CBL facilitated the first B24 supplies across several markets. Besides, the launch of biofuel helped reduce the GHG emissions by 20%, compared to traditional fuels. CBL has obtained ICC EU and ICC Plus certifications in early 2023. We supplied biofuel in Singapore since March 2025 and proactively supported customers to meet IMO GHG targets with sustainable and cost-effective alternatives. Looking ahead, CBL plans to further diversify biofuel offerings and strengthen our market position in green marine fuels. In addition, the company will explore more green fuel options, such as LNG and Magna, to meet the evolving sustainability regulations and industry demand. In the capital markets, CBL also made a remarkable progress with the following highlights. In January 2025, the company filed a shelf registration statement, which became effective on January 24, 2025, allowing for the offering of securities with an aggregate initial offering price of up to US$15 million. Following this, on January 28, 2025, the company initiated an at-the-market ATM offering with a total offering price of up to $2,604,166. The net proceeds from the ATM offering will be used for general corporate purposes. including acquisitions, business opportunities, and debt repayment, with management retaining discretion over the allocation. Additionally, on June 3, 2025, the company launched a share repurchase program approved by the Board of Directors. authorizing repurchases of up to the lesser of 5 million USD or 5 million ordinary shares, set to expire on April 15, 2028. Repurchases will be made in the open market with amounts in timing depending on the market conditions and corporate needs. The company highly values the relationships with our investors. In the first half of 2025, we have participated in several investor events and conferences, such as Linden Partners Investor Conference, Noble Capital Market Virtual Equity Conference, 8th China IR White Paper Summit, SZSE 2025 Global Investor Conference, Besides, we also held media and analyst luncheon and investor happy hour to further exchange insights with investors and media in person. CBL continued to actively communicate with different sites through various platforms, including AGM, newsletter, website, and social media. Our efforts have received much recognition. We have won the Most Creative Corporate Communication Award at the 2024 Valuable Capital Community Annual Selection and the Best Digital Investor Relations Award and Best Investor Relations Director at the 8th China Excellence IA Award. As an industry pioneer, CBL is committed to sustainability development and has initiated multiple steps with fruitful outcomes in ESG. In the first half of 2025, built up a corporate model for sustainability development, focusing on a reliable and responsible marine fuel supply, customer's growth support, and life quality enhancement. Engaged a consultancy with the aim of enhancing our ESG practices in a comprehensive four-stage approach. Conducted a materiality analysis on sustainability issues among internal and external stakeholders. Organized various maritime related volunteering programs and initiatives to support ESG practices in community. Following the corporate responsibility roadmap, we will mainly focus on three parts, ESG goal setting, ESG rating platform, and ESG disclosure. Looking forward, CBL will continue to take actions in ESG to achieve a sustainable development. More specifically, CBL's 2025 ESG plan and long-term commitment underscores the importance of adopting ESG practices to enhance transparency, implement sustainable initiatives, manage risk, and meet stakeholder expectations. On the environmental front, CBL leads with its biofield initiative, aligned with IMO's 2023 strategy, blending marine fuel oil with 24% eucomi to reduce scope-free supply chain emissions. The company also supports customers in achieving sustainability goals while ensuring its biofuel production avoids deforestation, land use changes, and competition with fruit production. In terms of social responsibility, CBL promotes equitable practices, including adherence to pay-for-performance principles, fostering diversity and inclusion with strong female representation, and supporting employee development through education subsidies. CBL also prioritizes employee well-being with regular events and encourages community engagement by holding various training and programs, such as International Coastal Cleanup for World Oceans Day. On governance, CBL's practice is in alignment with IMO decarbonization targets and fuel-eco-marine time regulation. The company ensures fresh perspectives and independent oversight through annual director elections and rotation. The company also established strong reporting channels for misconduct, fraud, or violations of company policy, ensuring swift management response and whistleblower protection. The plan is structured across four phases. Q1 to Q2 2025, establishing a sustainability strategy, governance framework, and action plan. Q1 to Q3 2025, improving sustainability management and implementing the sustainable development plan. Q2 to Q3 2025, implementing our sustainable development plan. Q3 to Q4 2025, enhancing disclosure practices and strengthening investor relations. Now, let's move on to strategic initiatives and outlook. Looking ahead to fiscal year 2025, our key initiatives include strengthen our service network, focusing on Asian, Asia-Pacific and European markets. Strengthening our presence in emerging markets. Continue expanding ports coverage. Grow sales volume. Continue to target new customers and new segments while maintaining strong relationships with current customers. Enhance market position. Stronger and more in-depth supplier relationships. Explore sustainable fields. biofuel adoption as a core of CBL's sustainability strategy, focused on compliance with the latest carbon emissions regulations with further exploration of biofuel products and other sustainable fuels. The International Marine Time Organization, IMO, agreed on its global greenhouse gas GHG framework in April, with full implementation set for 2038. This decision further emphasized the urgency of reducing emissions, promoting biofuel adoption, and encouraging future investment in ships capable of running on zero-carbon fuels. In the first half of 2025, CBL has the following achievements in improving its performance across three key areas. First, to improve gross profit and narrow down net losses. The company plans to increase sales volume through network expansion and new customer acquisition while leveraging its network to mitigate supply chain disruptions. CBI will also focus on developing biofuels and exploring sustainable fuels such as methanol and LNG for higher margins, alongside achieving economic subscale to reduce unit costs. CBI's gross profit margin increased by four basic points and net loss has narrowed by 38.8% in the first half of 2025. Second, to maintain sufficient cash flow and manage working capital. CBL will prioritize the strong cash position, strengthen liquidity, and closely monitor accounts receivable and payable. Mastering the capital market at the right time and increasing trade financing will further enhance financial flexibility to support growth initiatives. In the first half of 2025, CBL's current ratio improved from 1.51 to 1.54, while capital days improved by 1.8 days to minus 4.44 days. Finally, to enhance efficiency, CBI will utilize office automation and the IT system to streamline operations and explore advanced technologies for continuous improvement, cost saving, upgraded back-end systems, And implementing real-time order tracking, data analytics, CBL's operational expenses has decreased by 17%. These efforts will improve customer service and operational efficiency, enhancing sustained progress and long-term growth. Thank you for your attention. We are now happy to take your questions. Please feel free to share your queries, and I will facilitate the discussion along with Dr. Cha and Mr. Tong. Now we come to the Q&A session. Please type in your question in the Q&A box, and we will read them aloud for management to address. I can see the first question on the screen. The first question is, Among both areas, what was the most significant achievement achieved by CBL? How did the company produce results in this area, and what were the challenges, and how did CBL overcome them? This question is from Hu Guangyi from Southwest Securities. I would like to direct this question to William.