Financial Results for the Period Ended 30 September Investor Call, 30 October 2018

Transcription

1 Financial Results for the Period Ended 30 September 2018 Investor Call, 30 October 2018

2 Q RESULTS HIGHLIGHTS Growth across the business Strong cash flow generation and increased profitability Q revenue increased to US$92m, up 53% compared to Q EBITDA increased by 70% to US$51m in Q against Q Significantly increased contribution from the Tengiz project US$65m revenue and US$44m EBITDA generated by Topaz s strategic marine logistics project, Tengiz All twenty vessels have been received from the shipyards; fifteen vessels earning full revenue as at 30 th September 2018 Project ramp-up continues with full vessel deployment anticipated during Q Market leading asset portfolio and fleet utilisation rates Overall core fleet utilisation at 86% with significant improvements in MENA and Africa regions A second modern Anchor Handling Tug Supply Vessel ( AHTSV ) added to the fleet - the Topaz Mariner, to be immediately deployed in Saudi Arabia Solid contract backlog at US$1.4bn providing long-term earnings visibility and financial strength Robust financial performance driving balance sheet deleveraging Continue to be fully compliant across all financial covenants with sufficient headroom Moody s upgraded the outlook on Topaz from negative to stable while reaffirming their B2 rating Proven health and safety track record Topaz s strong commitment to health and safety illustrated by 33 consecutive months without Lost Time Injuries ( LTIs ) Page 2

3 SECTOR VIEW Industry utilisation rates improved globally to ~59% in Q Brent reached a 4-year high of US$86/bbl in October E&P news OSV news Industry OSV utilisation improved from 55% in Q (Topaz peer group) to 59% in Q Global upstream CAPEX expected to significantly increase: ~15% by 2020 and ~30% by 2022 (~10% and 45% respectively for offshore alone). EU majors driving offshore revival, which could bring 2019 offshore greenfield projects to the highest level since After more than two decades of dispute, the Caspian s legal status has settled: treating the surface as international water and dividing the seabed into territorial zones. This opens the door to construction of the Trans-Caspian-Pipeline 4 and will bring additional foreign investment into the region Despite increased oil company spending, major OSV companies reported deficits in Q and a large number of OSVs remains stacked. Charter rates are predicted to remain stagnant for at least 6 months 5 M&A activity continues in the industry with the latest being Nordic American Offshore (NAO) and Horizon Maritime Services Global Offshore Support Vessels Market to Surpass US$26.8 Billion by Sources: 1 Yahoo! Finance 2 Morgan Stanley 3 Clarkson s 4 NY Times 5 ShippingWatch 6 Digital Journal Page 3

4 9 SAUDI ARABIA 4 QATAR 3 UAE 9 RUSSIA TOPAZ FLEET FOOTPRINT Focused on core markets of Caspian, MENA and Africa 2 NORTH SEA/BALTICS 15 TOPAZ SOLUTIONS 21 AZERBAIJAN 29 KAZAKHSTAN 6 TURKMENISTAN 12 NIGERIA ANGOLA Notes: As of 30 Sep 2018; Excludes 5 MCVs for the Tengizchevroil contract already delivered but not yet operational, one newbuilt M-class AHTSV being mobilized to Saudi Arabia, and two subsea vessels being delivered from yard in Dec North Sea / Baltics includes subsea vessels Topaz Installer and Topaz Commander Nigeria includes subsea vessel Topaz Captain

5 INDUSTRY LEADING BACKLOG Securing contracts in challenging operating conditions Robust historical contract backlog evolution 1 (US$bn) Q CAGR: +8% 1.0 provides high revenue visibility long term (Q US$m) Q $109 $32 $378 $17 $352 $112 $148 $135 $ Firm $1,010 Option $358 Total $1,368 $50 7% Dragon Oil 39% TCO 39% BP KEY HIGHLIGHTS 7% Others Topaz was awarded multiple 4% Eni one-year contracts by Saudi Aramco in Q3 2018, 4% Saudi Aramco strengthening its backlog and earnings visibility Proven ability to secure contracts in challenging operating conditions Focus on development and production phases of the energy cycle underpins stability Long-term contracts provide visibility and inevitable consumption of backlog at times Preferred global supplier status with a number of IOCs/NOCs Increasing IOC/NOC tender activity signaling growing confidence in the E&P sector & beyond Firm Option Source: Company data 1 Backlog consists of estimated revenue from the uncompleted portion of all vessel charter contracts, based on day rates and assuming extension of contracts at the option of our clients. Page 5

6 INCREASING PROFITABILITY Record contribution from the Tengiz project ( US$m) Q3 YTD (Jan-Sep) Variance Variance Revenue % % Operating costs & overheads % % EBITDA % % EBITDA margin 50% 55% +5ppt 50% 53% +3ppt Cash flow from operations % % Interest expense % % REVENUE Q3 BY REGION (US$ m) 100% 80% 60% 40% 20% REVENUE YTD Q3 BY REGION (US$ m) 100% 80% 60% 40% 20% KEY HIGHLIGHTS The Africa market continues to demonstrate stability and robust results Tengiz project ramp up is proceeding as per plan Operating costs and overheads increase in line with revenue increase EBITDA margin has continued a stable trajectory around 50%, with an upwards trend Interest costs higher due to utilisation of the RCF 0% Q Q Caspian MENA Africa Solutions 0% YTD Q YTD Q Caspian MENA Africa Solutions 1 includes a one-off US$20m charge incurred during HY bond re-financing Page 6

7 QUARTERLY TREND DATA Positive PAT achieved in Q PROFIT & LOSS (US$ m) Q Q Q Q Q Q3 18 vs Q3 17 Revenue % EBITDA % EBITDA margin 50% 45% 50% 52% 55% +5ppt PAT (before exceptions) NM PAT margin (before exceptions) -8% -9% -5% 6% 9% +15ppt PAT (after exceptions) NM PAT margin (after exceptions) -40% -114% -5% -1% 5% NM REVENUE (US$ m) EBITDA (US$ m) EBITDA margin Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q3 17 Q4 17 Q1 18 Q2 18 Q % 40% 20% 0% Exceptions include US$19.1m of costs incurred during bond refinance in Q3 17. Vessel and goodwill impairment of US$65.2m and US$7.8m respectively in Q4 17. Loss of sale of disposal of 4 vessels of US$6m in Q

8 YTD Q BUSINESS PERFORMANCE Significant year-on-year improvement in utilisation Selected KPIs YTD Q3 17 YTD Q3 18 Variance Utilisation of core fleet 64% 86% +22ppt Caspian 80% 85% +5ppt Caspian Azerbaijan 93% 85% -8ppt Caspian Others 42% 87% +45ppt MENA 52% 84% +32ppt Africa 30% 86% +56ppt Topaz Solutions n/a 100% n/a Average day rate, core fleet $15,656 $14, % Contract backlog (US$b) % No. of vessels KEY HIGHLIGHTS Utilisation rates significantly increased due to improved performance in MENA, Africa and Turkmenistan, compared to the same period in 2017 Caspian position remains strong on the back of solid contract cover in Azerbaijan and Turkmenistan Fifteen vessels in the Solutions business unit (Tengiz project) were earning full, operational day rate as at 30 September 2018 Natural decrease in backlog as long-term contracts are consumed Average vessel age As of 30 Sep 2018; Excludes 5 MCVs for the Tengizchevroil contract already delivered but not yet operational, one newbuilt M-class AHTSV being mobilized to Saudi Arabia, and two subsea vessels being delivered from yard in Dec Page 8

9 DEBT COVENANTS Compliant with all financial covenants Financial Covenants Threshold Actual Sep 18 Headroom Net Interest Bearing Debt (NIBD 1 ) to EBITDA 2 < 5.75x 4.08x 29% Tangible Net Worth 3 > US$275m US$301m 9% Total Free Liquidity > US$30m US$78m 159% EBITDA to DSCR 4 > x 50% Continued focus on working capital management and flexible expansion CAPEX to maintain sufficient liquidity Tengiz project expected to further improve credit ratios significantly in Q NIBD = Total Debt less free cash less subordinated debt 2 EBITDA = Last twelve months 3 Tangible Net Worth = Shareholder funds (including MI) less intangibles 4 Calculated based on: EBITDA / (Interest + Current Portion of Total Debt) Page 9

10 LIQUIDITY POSITION AS AT 30 SEP 2018 Strong focus on liquidity US$m Limit Drawn Available Tenor RCF (committed lines) Expires April 2020 Cash & Bank Balances As at 30 Sep 2018 Total Liquidity 78 Drew US$10m on RCF during Q to fund the acquisition of a vessel which will be immediately deployed on a longterm contract with Saudi Aramco Page 10

11 QHSSE PERFORMANCE Topaz has now operated for 33 MONTHS without any LTI Lost Time Injury Frequency (LTIf 12 months rolling) KEY HIGHLIGHTS Q4 16 Industry benchmark = 0.44 * Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Topaz's commitment to safety is demonstrated by its LTI and TRIR scores, which are significantly ahead of industry benchmarks Topaz has now operated for 33 MONTHS without any LTI Total Recordable Injury Rate (TRIR 12 months rolling) Industry benchmark = 1.76 * Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 *IMCA Safety Statistics for 2017, informed by IMCA in March Page 11

12 Questions?