Höegh LNG The floating LNG services provider. 4Q 2015 Presentation of financial results 29 February 2016

Transcription

1 Höegh LNG The floating LNG services provider 4Q 2015 Presentation of financial results 29 February 2016

2 Forward looking statements 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. 2

3 Höegh LNG Holdings - Agenda for presentation of 4Q 2015 results Sveinung J.S. Støhle President & CEO Highlights / Markets / Summary Steffen Føreid CFO Financials Dedededw Appendix 3

4 4Q 2015 highlights EBITDA USD 24.6 million and profit after tax USD 4.0 million adjusted for FLNG impairment Paid quarterly dividend of USD 0.10 per share Received firm commitments for very competitive debt financing for FSRU#7 Declared dividend of USD 0.10 per share for the first quarter 2016 FLNG activities put on hold - resources and capital allocated to the FSRU segment 4

5 Höegh LNG s contract coverage 14 years* on average and USD 3.4 billion in EBITDA backlog Unit Type Built Charterer HMLP drop-down candidate? Höegh LNG Holdings Ltd Libra LNGC 1979 No SOLD Arctic Princess LNGC 2006 Statoil Maybe Arctic Lady LNGC 2006 Total Maybe Independence FSRU 2014 Klaipedos Nafta Yes Höegh Grace FSRU 1Q 2016 SPEC Yes FSRU#7 / 2552 FSRU 1Q 2017 Yes FSRU#8 / 2865 FSRU 1Q 2018 Octopus Yes FSRU options FSRU Yes Secured options for attractive delivery slots at competitive prices Höegh LNG Partners LP GDF Suez Neptune FSRU 2009 GDF Suez GDF Suez Cape Ann FSRU 2010 GDF Suez PGN FSRU Lampung FSRU 2014 PGN Höegh Gallant FSRU 2014 Egas Contract Extension option Under construction Option 5 *Excluding LNG Libra

6 All FSRUs operating according to contract and generating stable income PGN FSRU Lampung - Indonesia Main project drivers: Replace imported liquid fuels with domestic LNG Independence - Lithuania Main project drivers: Energy diversity and access to world markets for LNG Höegh Gallant - Egypt Main project drivers: To cover energy deficit in power production by using low cost LNG GDF Cape Ann Main project drivers: To cover industrial demand for natural gas and replace liquid fuels Octopus site in Conception. Chile GDF Neptune Currently operating as an LNGC as part of Engie s portfolio - confirming FSRUs flexibility 6

7 Höegh LNG s next FSRU project is on schedule for start-up in Cartagena / Colombia second half Required permits received Construction of associated infrastructure on schedule Main driver for FSRU: LNG will be used to cover electricity deficit FSRU Höegh Grace on 20 year contract 7

8 .. and the FSRU project in Concepción / Chile is on schedule for start-up in 2018 Permitting process according to schedule Backed by 20 year LNG and power contract Will cover electricity deficit and supply local industry in Concepción region Concepción Bay FSRU#8 due to be delivered from yard first quarter 2018 for a 20 year contract 8

9 Höegh LNG will focus solely on expanding its FSRU franchise world wide 1 The segment that offers the best return on invested capital 2 Favourable market conditions creating strong foundation for continued growth 3 Höegh LNG is the leading company in the FSRU segment and will continue to aggressively expand its market share 9

10 Höegh LNG Holdings - Agenda for presentation of 4Q 2015 results Sveinung J.S. Støhle President & CEO Highlights / Markets / Summary Steffen Føreid CFO Financials Dedededw Appendix 10

11 No. of FSRUs USD/bbl Fall in energy prices supports growth in the FSRU market Oil price development and FSRU projects in operation FSRU projects in operation (left axis) Average price of Brent FOB (right axis) Over the last two years FSRU projects in operations have increased by 82% Plenty of LNG available at low prices creates a solid foundation for FSRU projects 11

12 .. and the LNG market will be long supplies for coming years Which will propel further growth and development in the FSRU market But make FID s on proposed new LNG liquefaction projects unlikely in the same period 12

13 U.S. LNG volumes will further increase the flexibility for FSRU LNG importers Close to 50% of the volumes have been sold to traders and these volumes will be offered for spot, short term or medium terms contracts; First cargo went to Brazil The FSRU market is the main sink for short term LNG supplies exemplified by importers such as Brazil, Argentina, Kuwait, Egypt, Dubai and Jordan all covering their LNG demand through spot supplies 13

14 Limited number of uncommitted FSRUs available * Not competitors - FSRU constructed for own purpose Höegh LNG Golar LNG Excelerate BW Gas MOL Exmar** OLT Gazprom Modern First generation Conversions Uncommitted FSRU under construction 14 * Two FSRUs operating as LNGCs ** Barge FSRU

15 FSRU tenders quoted in the public domain (so far) in 2016 There are currently seven publicly announced active FSRU tenders Höegh LNG is currently pursuing three FSRU projects for FSRU#7 and several for growth beyond current newbuilding program 15

16 Höegh LNG Holdings - Agenda for presentation of 4Q 2015 results Sveinung J.S. Støhle President & CEO Highlights / Markets / Summary Steffen Føreid CFO Financials Dedededw Appendix 16

17 Summary EBITDA of USD 24.6 million steady operating results Achieved commitments from banks for attractive debt financing for FSRU#7 Strong growth prospects in the FSRU market with attractive returns Decided to put FLNG activities on hold 17

18 Höegh LNG Holdings - Agenda for presentation of 4Q 2015 results Sveinung J.S. Støhle President & CEO Highlights / Markets / Summary Steffen Føreid CFO Financials Dedededw Appendix 18

19 Income statement - proportionate consolidation JV companies Income EBITDA Net Profit USD 4.0 million adj FLNG impairment USDm USDm USDm ,0 0,0-10,0-20,0-30,0-40,0-50,0 (2,3) 6,0 2,5 (33,0) ,0-70,0 (59,3) 19

20 Cash flow - proportionate consolidation JV companies USD million 4Q2015 3Q2015 2Q2015 1Q2015 4Q2014 Net profit or (loss) before tax (32) 2 6 (2) (58) Adjustments of non-cash P&L items Proceeds from sale of mooring Net changes in working capital, other (7) Net cash flow from operating activities Net (investments) proceeds in marketable securities (87) - (43) Investments newbuildings under construction and vessels (2) (8) (34) (13) (231) Investments in intangibles and equipment (0) (1) Net cash flow from/(used in) investing activities (90) (8) (77) 4 (190) Net proceeds form equity issuance Proceeds from borrowings Repayment of borrowings (16) (16) (16) (16) (27) Dividend paid to non-controllling interest (MLP) (4) (4) (4) (4) (2) Dividend paid to shareholders of the parent (8) (7) (7) (7) - Interest paid (18) (15) (15) (16) (14) Increase in restricted cash (2) (2) - - (37) Other financing activities - (3) (1) - (1) Net cash flow from/(used in) financing activities (47) (15) 107 TOTAL CASH FLOW (109) (60) 20

21 Financial position - proportionate consolidation JV companies USDm Assets USDm Equity and Liabilities 45% 40% % 30% 25% 20% 15% 10% % - 4Q14 1Q15 2Q15 3Q15 4Q15-4Q14 1Q15 2Q15 3Q15 4Q15 0% Current cash and marketable securities Other assets Vessels, newbuildings and installations under constr. Other liabilities Interest bearing debt Book equity adj MTM Equity ratio adj MTM (stat. reporting) - right axis 21

22 Competitive financing secured for FSRU#7 USD 223 million equivalent to 75% of delivered cost No employment requirement providing commercial flexibility Long amortization profile (20 years) positively impacting free cash flow Low cost (around 3.8% fixed interest rate) enhancing return on equity 22

23 Strong access to capital supporting further growth Equity at hand for current newbuilding programme and one more FSRU order With challenging MLP market, evaluating alternative sources of growth capital Unsecured, public or private bond Sale and lease back Preference shares Convertible bond Common equity Industrial / financial co-investor (s) 23

24 Summary Stable operating results Well capitalized balance sheet Attractive bank financing secured for FSRU#7 Access to diversified range of funding sources 24

25 Höegh LNG Holdings - Agenda for presentation of 4Q 2015 results Sveinung J.S. Støhle President & CEO Highlights / Markets / Summary Steffen Føreid CFO Financials Dedededw Appendix 25

26 Income Statement - Joint Ventures according to equity method USD million 4Q2015 3Q2015 2Q2015 1Q2015 4Q2014 Freight revenues 51,3 54,1 50,5 42,8 27,6 Construction contract revenue ,1 Management and other income 3,9 1,4 2,0 2,0 2,4 Share of results from investments in joint ventures 3,5 2,8 2,5 2,6 2,7 TOTAL INCOME 58,7 58,3 55,0 47,4 40,7 Charterhire expenses (8,9) (8,9) (8,8) (8,7) (8,9) Construction contract expenses ,9 Voyage expenses (1,8) (0,1) (0,3) (0,5) (2,4) Operating expenses (10,0) (11,5) (10,9) (9,4) (11,6) Project administrative expenses (3,2) (2,3) (3,9) (3,4) (4,3) Group administrative expenses (4,1) (4,8) (5,2) (4,9) (3,7) Business development expenses (6,0) (4,2) (3,2) (3,9) (5,3) EBITDA 24,6 26,6 22,6 16,5 5,4 Depreciation (6,9) (6,9) (8,6) (8,4) (7,8) Reversal of impairment (impairment) (37,0) - 3,1 - (44,8) EBIT (19,3) 19,7 17,2 8,1 (47,3) Interest expenses (12,6) (12,6) (9,5) (9,3) (8,8) Interest income 0,4 0,4 0,4 0,4 0,4 Other financial items (0,4) (5,4) (2,1) (1,0) (2,2) PROFIT (LOSS) BEFORE TAX (32,0) 2,1 6,0 (1,8) (57,9) Taxes (1,0) 0,4 0,0 (0,5) (1,3) NET PROFIT (LOSS) (33,0) 2,5 6,0 (2,3) (59,3) 26

27 Financial position - Joint Ventures according to equity method USD million Licences, design and other intangibles Investments in newbuildings under construction and vessels Shareholder loans to joint ventures Mark-to-market on hedging instruments Other assets Restricted cash (non-current) Current cash and marketable securities Asset held for sale TOTAL ASSETS Total equity Investments in joint ventures Interest bearing debt Mark-to-market on hedging instruments Other liabilities TOTAL EQUITY AND LIABILITIES Total equity adjusted for hedging reserves Equity ratio adjusted for hedging reserves 40 % 41 % 37 % 41 % 42 % Net interest bearing debt

28 Cash flow statement - Joint Ventures according to equity method USD million 4Q2015 3Q2015 2Q2015 1Q2015 4Q2014 Net profit or (loss) before tax (32) 2 6 (2) (58) Adjustments of non-cash P&L items Dividend received from joint ventures Proceeds from sale of mooring Net changes in working capital, other (8) Net cash flow from operating activities Net (investments) proceeds in marketable securities (87) 0 (43) Investments newbuildings under construction and vessels (2) (8) (34) (13) (231) Investments in intangibles and equipment (0) (1) Proceeds of repayment on shareholders loans 1,34 1, Net cash flow from/(used in) investing activities (88) (6) (75) 6 (188) Net proceeds form equity issuance Proceeds from borrowings Repayment of borrowings (12) (12) (12) (12) (23) Dividend paid to non-controllling interest (MLP) (4) (4) (4) (4) (2) Dividend paid to shareholders of the parent (8) (7) (7) (7) - Interest paid (13) (10) (10) (11) (9) Increase in restricted cash (2) (2) - - (37) Other financing activities - (3) (1) - (1) Net cash flow from/(used in) financing activities (38) (6) 116 TOTAL CASH FLOW (113) (59) 28