Capital Link London Sept Rikard Vabo Head of Investment Banking Division

Transcription

1 Capital Link London Sept. Rikard Vabo Head of Investment Banking Division September

2 The Shipping and Energy markets How to consider the month outlook IMO 2020 less than 1.5 years away Opportunities Challenges Shipping Shipping Orderbook at lowest point in two decades Orderbook at lows Freight rates long-awaited recovery Values and Rates at lows IMO 2020 Compliance and scrapping IMO 2020 Compliant fuel prices Capital markets open (ECM & DCM) Banks shipping lending capacity Solid World GDP growth Trade tariffs, blockades, import quotas Asset values still scraping off the bottom Poor pricing in capital markets Demand for new energy sources 1996 YTD 1996 YTD Capesize VLCC Capesize VLCC Offshore Oil Services Offshore Oil Services E&P-spending on the move on the back of rising oil prices Oil price firming Tonnage oversupply lay-ups and rig stacking Working rigs at lows Contracting on the raise Leverage is high in several segments Consolidation on the agenda Reactivation of stacked units Market discipline on the raise Short-term market outlook do differ in high degree across sectors 1996 YTD Asset quality 2001 Brent Crude Price Working Floaters Working Jackups 2

3 IMO 2020 less than one and a half year away A paradigm shift that will impact the entire shipping industry Owners are essentially left with four options: HFO MGO forward spread 1 1. Install scrubber and run on Heavy Fuel Oil (HFO) 1,400 Case: VLCC Scrubber Benefit USD/day 2. 2 Run on Marine Gas Oil (MGO) and new compliant fuels 1,200 21, Run on LNG/LPG 4. 4 Scrap the vessel USD/tonne 1, , IMO , spread 750 spread spread Calendar 2020 Base case High case Spread MGO HFO Note: 3

4 Investment Opportunities Today Dry Bulk Tankers VLGC Offshore Rig Implied 5yr* Payback in years 2020e 3.6yrs 2.5yrs 4.5yrs 2.4yrs NB parity 5yr yr Average 5yr Shares YoY% -5% -0% 5% 26% Min / Max YoY% +115% / -56% +62% / -57% +41% / -82% +60% / -74% Asset Values YoY% +8% +11% -8% 50%+ Management Capital Structure Market position Asset Base Capital Market Atributes Liquidity Cost Structure Operational Leverage Key sponsor(-s) Others Note: * The lowest priced tradable company in the relevant sector 4

5 A quick reminder of how quickly shipping markets can change In 2013, VLCC rates moved from 10k to 50k USD/day in one quarter A VLCC example VLCC MEG-Far East 2013 vs USDk/d And a quick reminder of how quickly equities move Current upside to FSEC targets Tanker stocks 2013 vs (indexed) Upside to targets % 60% 40% 50% 62% 42% 72% 49% 63% 54% 80 20% % DHT EURN FRO HUNT INSW OET TNK 2013 Note: 5

6 Since Jan. 2016, Fearnley Securities has raised approx. USD 6.6bn for our clients Fearnley Securities winner of #1 Overall Top Stock Picker in the United States Recent Corporate Transactions USD 100m Unsecured Bond NOK 120m USD 100m and Merkur listing Sole Lead USD 115m Underwritten Offering NOK 750m Sr. Secured Bond NOK 750m Unsecured Bond Historical Transactions Completed with Current Team USD 250m USD 250m USD 250m USD 650m USD 800m USD 155m s NOK 520m Oil Service Shipping ECM: 52 DCM: 20 ABF: 13 Advisory: 12 ECM: 44 DCM: 26 ABF: 4 Advisory: 22 10,300 19,300 Energy Other ECM: 0 DCM: 11 ABF: 0 Advisory: 1 ECM: 6 DCM: 7 ABF: 0 Advisory: 8 1,300 1,000 /2017 USD 65m /2017 USD m NMM Sole Lead /2017 USD m Sr. Secured Bond & /2017 6

7 Incremental demand from digitalizing in our approach 1 Empirical data 2 Deal Specific 3 Data Approach Fundamental Analysis Non-deal roadshow Proprietary data Analysts calls Continuous investors dialog Broker calls Public data Peer Pricing Deal structuring Trade flows Transactions tracking Timing Statistics 7

8 Data Analytics Example from one of our innovative databases «Bubble bubble» Note: 8

9 Data Analytics Example from one of our innovative databases «Bubble bubble» Note: 9

10 Financing Available for Shipping World: Capital Raised for companies in the Shipping & Offshore Sectors Total Total Total Total Total Total Total Total Total Total 15, YTD Total EQ / Debt Sector Total EQ / Debt Sector Total EQ / Debt Sector 40,000 30,000 20,000 10,000 12,000 9,000 6,000 3,000 RoW USA / Norway Bonds Equity Oil Service Shipping RoW USA / Norway Bonds Equity Oil Service Shipping - - Fearnley Market Share Equity Shipping & Offshore (2016 YTD) Strong Placing Power Across Shipping & Offshore (2016 YTD) FS FS OTHERS FEARNLEY (FS) CONTAINER OTHERS FS GAS OFFSHORE OTHERS DRY BULK TANKER OTHERS OTHERS FS Note: 10

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