Hoegh LNG Q1 2014 results presentation
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Hoegh LNG Q1 2014 results presentation Hoegh LNG Q1 2014 results presentation Presentation Transcript

  • Höegh LNG – The floating LNG services provider First Quarter 2014 Presentation of financial results 23 May 2014
  • Forward looking statements 2 This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about its operations. All statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Höegh LNG undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changes in LNG transportation and regasification market trends; changes in the supply and demand for LNG; changes in trading patterns; changes in applicable maintenance and regulatory standards; political events affecting production and consumption of LNG and Höegh LNG’s ability to operate and control its vessels; change in the financial stability of clients of the Company; Höegh LNG’s ability to win upcoming tenders and securing employment for the FSRUs on order; changes in Höegh LNG’s ability to convert LNG carriers to FSRUs including the cost and time of completing such conversions; changes in Höegh LNG’s ability to complete and deliver projects awarded; increases in the Company’s cost base; changes in the availability of vessels to purchase; failure by yards to comply with delivery schedules; changes to vessels’ useful lives; changes in the ability of Höegh LNG to obtain additional financing, in particular, currently, in connection with the turmoil in financial markets; the success in achieving commercial success for the projects being developed by the Company; changes in applicable regulations and laws; and unpredictable or unknown factors herein also could have material adverse effects on forward-looking statements.
  • Agenda 3  Highlights  Financials  Operational review  Market outlook  Summary
  • First quarter 2014 - Highlights and subsequent events 4  Mandatory change in accounting standard for recognition of joint venture investments from proportionate consolidation to the equity method  EBITDA of USD (1.0) million and loss before tax USD 4.5 million  Signed a USD 412 million loan facility for the Höegh Gallant and FSRU #4  Tower Yoke Mooring System (TYMS) for the PGN FSRU project installed  PGN FSRU Lampung delivered from yard and connected to the TYMS  The second FSRU, Independence, delivered from yard  Letter of Intent for 5 year FSRU contract signed with Egas of Egypt  Höegh LNG Partners LP (“MLP”) made confidential submission to the United States Securities and Exchange Commission of initial draft registration statement for initial public offering of common units of the MLP
  • Agenda 5  Highlights  Financials  Operational review  Market outlook  Summary
  • Impact on consolidated figures from change in accounting standard 6  Reduction in Income, EBITDA and EBIT - net profit remains same  Reduction in liabilities and total assets - equity remains same USD'000 1Q2014 1Q2014 Total income 51,3 59,3 Operating profit before depreciation (1,0) 8,4 Operating profit (3,9) 2,1 Profit or (loss) for the period (4,5) (4,5) 31.03.2014 31.03.2014 Total assets 739 1 160 Equity adjusted for hedging reserves 453 453 Net interest bearing debt 146 527 Equity ratio adj. for hedging reserves 61 % 39 % Consolidated by the proportionate methodConsolidated by the equity method
  • Income statement 7 USD million 1Q2014 4Q2013 3Q2013 2Q2013 1Q2013 Income on T/C basis 17,2 17,8 17,2 11,3 15,6 Construction contract revenue 28,2 14,6 11,8 26,3 - Management and other income 3,6 8,9 3,8 1,6 1,7 Share of results from investments in joint ventures 2,2 4,2 3,8 3,6 3,5 TOTAL INCOME 51,3 45,5 36,7 42,7 20,7 Charterhire expenses (8,7) (8,9) (8,9) (8,8) (8,7) Construction contract expenses (24,0) (12,8) (10,4) (22,5) - Operating expenses (6,4) (6,2) (5,7) (5,9) (5,8) Administrative expenses (6,2) (4,9) (4,4) (3,9) (3,9) Business development expenses (7,0) (11,1) (5,9) (4,1) (4,5) EBITDA (1,0) 1,5 1,3 (2,4) (2,2) Depreciation (2,9) (4,6) (4,4) (4,3) (3,9) EBIT (3,9) (3,1) (3,1) (6,7) (6,2) Interest expenses (0,4) (0,6) (0,1) (0,1) (2,5) Interest income 0,5 0,5 0,5 0,6 0,7 Other financial items (0,7) (1,1) 0,1 0,2 0,5 PROFIT OR (LOSS) BEFORE TAX (4,5) (4,2) (2,6) (6,0) (7,6) Taxes (0,0) 0,3 (0,2) (0,1) (0,4) NET PROFIT OR (LOSS) (4,5) (3,9) (2,8) (6,1) (7,9)
  • Financial position 8 USD million 31.03.2014 31.12.2013 30.09.2013 30.06.2013 31.03.2013 Licences, design and other intangibles 74 74 74 74 74 Investments in newbuildings under construction and vessels 455 421 388 387 366 Shareholder loans to joint ventures 23 25 26 27 28 Investments in joint ventures 0 0 7 8 6 Mark-to market on hedging reserves 14 18 12 13 3 Other assets 10 19 17 19 19 Restricted cash (non-current) - - - 1 - Unbilled construction contract receivable 81 53 38 25 - Current cash and marketable securities 82 75 101 108 162 TOTAL ASSETS 739 684 665 662 657 Total equity 374 389 381 381 349 Investments in joint ventures 89 86 97 103 130 Interest bearing debt 227 165 154 148 152 Mark-to market on hedging reserves 14 14 8 8 7 Other liabilities 34 31 25 22 20 TOTAL EQUITY AND LIABILITIES 739 684 665 662 657 Total equity adjusted for MtM on interest rate swaps 456 460 461 463 469 Equity ratio adjusted for MtM on interest rate swaps 62% 67% 69% 70% 71% Net interest bearing debt * 146 90 52 39 (10) * [IBD less cash, mark.securities and restricted cash]
  • Cash flow statement 9 USD million 1Q2014 4Q2013 3Q2013 2Q2013 1Q2013 Net profit or (loss) before tax (4) (4) (3) (6) (8) Adjustments of non-cash P&L items (3) (1) (1) (3) 2 Dividend received from joint ventures 1 9 3 1 1 Net changes in working capital, other 6 0 3 (6) 2 Net cash flow from operating activities (1) 5 2 (15) (2) Proceeds from sale of marketable securities - 21 - 80 - Investments newbuildings under construction and vessels (52) (45) (13) (38) (90) Investments in intangibles and equipment (0) (0) (0) (1) (3) Proceeds of repayment on shareholders loans 2 2 1 2 2 Net cash flow from/(used in) investing activities (50) (23) (13) 43 (91) Proceeds from borrowings 108 21 5 - 19 Repayment of borrowings (30) - - - - Interest paid (2) (2) (2) (2) (2) Other financing activities (8) (7) (0) (0) (4) Net cash flow from/(used in) financing activities 67 12 2 (3) 12 TOTAL CASH FLOW 16 (6) (8) 26 (82)
  • Agenda 10  Highlights  Financials  Operational review  Market outlook  Summary
  • Status of FSRU newbuilding programme and new contracts 11 Vessel / Hull Customer Status Construction Delivery PGN FSRU Lampung PGN, Indonesia Delivered April Independence KN, Lithuania Delivered May Höegh Gallant LOI/TS with Egas Under construction 95% August 2014 2551 On offer in tenders Under construction 38% March 2015
  • 12 Perusahaan Gas Negara project  The Tower Yoke Moring System (TYMS) installed on site in Lampung  PGN FSRU Lampung delivered from yard and connected to the TYMS  Project on budget and schedule to commence operation in June 2014
  • 13 Klaipedos Nafta FSRU project  Independence delivered from yard  Terminal on schedule to commence operations no later than end 2014  Jetty and pipeline (Client’s scope) on schedule for completion during 3Q 2014  Pursuing interim employment for Independence in short term market  Klaipedos Nafta reports that LNG supplier has been selected
  • 14 Letter of Intent / Term Sheet with Egas of Egypt  Letter of Intent/Term Sheet signed with Egyptian Natural Gas Holding Company (Egas) for a 5 year FSRU contract  LNG to be used to cover natural gas deficit in power sector  Basis Höegh Gallant which will sail directly from yard to site  FSRU to be located at Ain Sokhna port on the Red Sea  Average annual EBIDA of around USD 40 million  Operations scheduled to commence in 3Q 2014  Term Sheet subject to negotiation of Time Charter Agreement, board approval and approval of the Egyptian competent authorities
  • Egypt’s Natural Gas Transmission & Distribution 15 0 10 20 30 40 50 60 Billioncubicmeters Development of Natural Gas Quantities Distribution (1997-2012) Export Local Source: Egyptian Natural Gas Co.  Consumption of natural gas has doubled in 10 years  Natural gas is used for power generation (58%), commercial sector (20%), Industrial sector (12%) and petrochemical industry (10%)  Volumes available for export to Jordan (pipeline) and for Damietta LNG facility have declined  LNG imports will cover local demand for natural gas in peak season
  • 16 Near-term FSRU opportunities for FSRU#4 and additional newbuildings Project Pre- qualified Bid Selection Contract award Start-up Columbia 2014 2014 2015 Lebanon 2014 2014 2016 India 2015 2015 2017 Port Meridian Exclusive 2014-2015 2017-2018 Chile 2 2014 2015 2017 Chile/Colbun 2014-2015 2017
  • Höegh FLNG Ltd. 17  Awarded pre-FEED contract to one major shipyard and one major EPC contractor for initial design of Höegh LNG’s proprietary FLNG Barge  Initial results of pre-FEED confirm Company’s expectations on competitive cost level and schedule to first gas  Signed Letter of Intent with non-disclosed North American barge FLNG project  Re-evaluating current capitalization plan for Höegh FLNG
  • 18 Vessels in operation  Existing fleet operated safely and without incidents
  • Agenda 19  Highlights  Financials  Operational review  Market outlook  Summary
  • Global LNG demand- according to the majors 20 Source: Fearnlys
  • Asia LNG demand growth – expectations continue to rise 21 Source: BG Group
  • Worldwide LNG import outlook  Significant growth in the use of FSRUs over the last 5-6 years  Average growth in peak regasification volume is 70% per year 22
  • LNG imports to Argentina and Brazil have grown with approx. 180% from 2010 - 2013 23  Brazil has a sudden severe drought and thus not enough hydro for electricity production  Argentina disregarded their E&P investments and therefore do not have enough gas 1,3 3,2 3,8 4,9 2,0 0,6 2,5 4,4 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 1 2 3 4 5 6 2010 2011 2012 2013 MTPA LNG imports - Argentina LNG imports - Brazil FSRU utilisation - Argentina FSRU utilisation - Brazil Source: IGU World LNG Report
  • 24 Around 30 projects in pipeline  16 projects in Asia/Middle East  6 projects in the Americas  7 projects in Europe/Africa Owner FSRUs (oper+constr) Customers* Höegh LNG 4+2 GDF Suez (2), Perusahaan Gas Negara, Klaipedos Nafta, Egas Golar LNG 5+2 Petrobras (2), Pertamina, Dubai Power Authority, Jordanian Energy Ministry, Kuwait Oil Corporation Excelerate 9 YPF (2), Petrobras, PREPA, Israel Electric Corporation OLT 1+0 E.ON, IREN (also owners) MOL 0+1 GDF Suez /Marubeni BW Gas 0+2 N/A * Projects in operation or awarded Existing Under construction / awarded Potential FSRU market outlook
  • 25 FLNG Projects under construction Main sponsor Country Technical solution Shell Australia Offshore FLNG Petronas Malaysia Offshore FLNG Petronas Malaysia Offshore FLNG Pacific Rubiales/Exmar Colombia Barge FLNG Existing Under construction / awarded Potential for HLNG Barge FLNG FLNG market outlook
  • Global LNG fleet overview  19 FSRUs in fleet  7 FSRU newbuildings on order  377 LNG carriers in fleet  114 newbuildings on order (30%) 26 Type Delivered Newbuildings on order Under conversion Total LNGC 377 114 - 491 FLNG - 4 - 4 FSRU 19 7 - 26 Total 396 125 - 521 LNG carrier fleet FSRU fleet (Source: Platou)
  • 27 Corporate strategy  Further expansion  With 3 of 4 FSRUs under contract, considering options for further expansion  Expansion will be in the following order of priority: 1) FSRU 2) FLNG 3) LNGC  All three Korean shipyards have confirmed that they still have available slots in 2017, and plenty available slots in 2018  Dividend policy  Company in the process of formulating a dividend strategy  Expects first pay out during the first half 2015  Details of the dividend strategy will be communicated to the market in the second half of 2014
  • Agenda 28  Highlights  Financials  Operational review  Market outlook  Summary
  • Summary 29  PGN FSRU project on schedule to start operations in June 2014  KN FSRU project on schedule for start up by end of the year – interim employment being pursued for Independence  Term Sheet signed with Egas for a 5 year FSRU contract - Höegh Gallant to be employed for the project  Firming up price and schedule on proprietary FLNG Barge. Signed a Letter of Intent with non-disclosed North American barge FLNG project  Dividend strategy under development with expected first payout in first half 2015  Evaluating strategy for next phase of FSRU expansion
  • 30 Thank You!