Q Presentation

Transcription

1 Q Presentation

2 Contents Highlights and material events Segment reporting Financial information Summary Page 2

3 Group Financial performance Q highlights: Operating revenue of USD 240 million EBITDA of USD 71 million EBITDA-margin of 29 % EBIT of USD 34 million Profit of USD 18 million Page 3

4 Highlights and material events in Q Dividend and share buy-back program suspended - In February 2015, the Board decided to suspend the annual dividend for the financial year 2014 due to the significant weakening of market fundamentals and the re-contracting risk in the Company s MODU segment. At the same time, the Board also decided to suspend the share buy-back program for the same reasons. Cost reduction programs - The Group has implemented a series of measures to reduce cost levels throughout the organisation: - The Group is in the process of optimising its support functions in order to provide more efficient support services. During Q1 2015, about 60 onshore employees in Norway has been laid off. - Further downsizing of the onshore organisation will be executed throughout 2015 to reduce future cost level and other cost savings initiatives are in the process of implementation. - A reorganisation of operational and technical support services has also been initiated to increase efficiency and operational performance. Page 4

5 Highlights and material events in Q (cont.) MODU Deepsea Aberdeen commenced on its 7-year drilling contract with BP on 21 April 2015 on the Quad 204 field development project West of Shetland, UK. Deepsea Metro I has secured employment for Vietgazprom for approximately 20 weeks in Vietnam. Expected commencement is mid Q and estimated contract value is USD 40 million. In additon there are two options for approximately 90 days each. Deepsea Metro II finalized its contract with Petrobras in Brazil mid May 2015 and will be laid-up awaiting new employment. Drilling & Technology During Q approximately 60 employees in the Technology business area were made redundant following the downsizing communicated in Q report. Odfjell Drilling was awarded the drilling engineering sub contract for the Johan Sverdrup drilling platform topside and will be one of Aibel's major sub-contractors for their engineering, procurement and construction (EPC) contact for the Drilling Platform Topside for Johan Sverdrup in the Norwegian North Sea. The contract value is estimated to NOK 110 million. Well Services Due to the current market situation and a reduction of rigs in operation in Norway, Well Services has downsized with approximately 30 offshore and onshore personnel in Q Page 5

6 Segment reporting - Mobile Offshore Drilling Units (MODU) MODU MODU Firm MODU contract backlog at 31 March 2015 of USD 1.6 billion Financial utilisation: Financial Utilisation 1 Q1 15 Q1 14 FY 14 FY 13 Deepsea Stavanger 99.0% 95.1% 96.5% 87.1% Deepsea Atlantic 99.1% 91.8% 92.1% 98.7% Deepsea Bergen % 98.1% 98.7% 97.9% Deepsea Metro I 3 n/a 96.7% 97.7% 98.7% Deepsea Metro II 94.3% 64.1% 75.5% 78.7% Comments: 1) Financial Utilisation is measured on a monthly basis and comprises the actual recognised revenue (encompassing different hourly day rates) for all hours in a month, expressed as a percentage of the full day rate for all hours in a month. Financial Utilization, by definition, does not take into account periods of non-utilisation when the units are not under contract. Modern fleet of UDW and harsh environment drilling units Extensive drilling experience Provision of integrated management services for drilling units 2) Deepsea Bergen s financial utilization in Q was negatively impacted by 8 days off-hire in connection with challenges with the subsea equipment in February ) Deepsea Metro I was free of charter in Q Page 6

7 MODU - Dayrates, contract status and options Drilling unit Location /operator Current day rate (USD/day) 1 Contract status Deepsea Stavanger Angola BP Angola 545,000 Deepsea Atlantic Norway Statoil 566,371 Deepsea Aberdeen UK BP Exploration 450,000 Deepsea Bergen Norway Statoil 350k Deepsea Metro I Anchored in South Africa 255,000 2 Deepsea Metro II Brazil Petrobras 432,598 3 Deepsea Guarapari Brazil Petrobras 518,453 4 Deepsea Itaoca Brazil Petrobras 524,592 4 Deepsea Siri Brazil Petrobras 528, Contract Option Construction 1) Rates may include mix of currencies and fluctuate based on exchange rates. 2) Day rate is net of taxes 3) In addition to the day rate there is a bonus element of up to 10% linearly from 93% to 98% utilization. 4) In addition to the day rate there is a bonus element of up to 15% linearly from 93% to 98% utilization. Contract length for each of the units is 15 years from commencement of operations Page 7

8 Segment reporting - Platform Drilling and Technology Platform Drilling and Technology Drilling & Technology Firm contract backlog of USD 0.5 billion at 31 March 2015 Value of priced optional periods of USD 1.4 billion Platform Drilling contracts: Customer Platforms Contract status 7 NO platforms 1 Mariner (UK) Bressey (UK) One of the leading contractors in the North Sea platform drilling market Drilling engineering services Established competence for the latest generation technology Brage 6 UK platforms 2 5 UK platforms Contract Option 1) Grane, Heidrun, Njord, Sleipner A, Visund, Snorre A, Snorre B 2) Claymore, Clyde, Saltire, Piper, Tartan, Fulmar 3) Clair, Andrew, Bruce, Magnus, Clair Ridge Page 8

9 Segment reporting - Well Services BASES : EUROPE Norway Key figures ~525 employees United Kingdom Holland Romania Services from 11 bases Operations in more than 20 countries Service offering Tubular runnng services BASES : ASIA Thailand Vietnam Drill tool rental services Well intervention services BASES : MIDDLE EAST Saudi Arabia United Arab Emirates Turkmenistan Kurdistan BASE OPERATIONS A leader in remote operated drilling technologies 9

10 Market outlook Exposed to re-contracting risk in a weak drilling market over the next couple of years MODU The drilling market has continued weakening into 2015 and we expect a weak drilling market over the next couple of years. The soft market is due to continued delivery of newbuilds and oil companies increased cost focus and capital discipline, resulting in an increasing number of stacked units and continued downward pressure on day rates. Several of the Group s drilling units are exposed to re-contracting risk in the current or near term drilling market. Fierce competition for a limited number of contract opportunities in the market, and reduced day rates alone does not clear the current market. The bifurcation between modern and older drilling units is expected to continue and scrapping of older units will continue. In our opinion, the demand for modern UDW and HE units will slowly start improving throughout 2016 leading to increased utilization and a subsequent improvement in day rates. Platform Drilling and Technology Platform drilling services is secured by medium to long-term contracts. The slowdown in the North Sea activity level has led to postponement and cancellation of development- and upgrade projects. As a result the Group has further adjusted the manning within engineering services and further cost cuts and efficiency improvement programs are in the process of being implemented. Page 10

11 Market outlook (cont.) Well Services Well Services has experienced a further reduction in its activities on the Norwegian Continental Shelf (NCS) so far in This has partly been neutralised by continued growth outside the NCS. General Due to the overall challenging market conditions, cost cutting and efficiency improvement programs have already been implemented and further programs are in the process of implementation. In the longer term, we are of the opinion that the oil industry s demand for drilling services will continue to be supported by the need for reserves replacement and by continued spending on exploration and field-development in the main offshore regions. The Group s business segments will all benefit and will be well positioned for taking advantage of such future market improvements. Page 11

12 Earnings visibility through USD 3.6 billion order backlog Total revenue backlog per year (for firm contracts and priced option periods) 1 USD million Firm contracts Priced options USD 2.1 billion USD 1.5 billion Total backlog USD 3.6 billion Revenue backlog for Well Services, Technology and MODU Management is not included in the revenue backlog above. 1) At 31 March 2015, includes pro-rata backlog figures in respect of Odfjell Drilling s 40% ownership in Deep Sea Metro Ltd, but does not include any backlog for Odfjell Drilling s share of Odfjell Galvão. Total backlog figures may not equal the sum of firm contracts and priced option periods for the year due to rounding. The Vietnam contract for Deepsea Metro I has not been included in the backlog figures above. Page 12

13 Financial information

14 Financial performance highlights Odfjell Drilling reports for Q1 2015: Operating revenue of USD 240 million EBITDA of USD 71 million EBITDA-margin of 29 % Net profit in the period of USD 18 million Group Operating Revenues (USDm) Group EBITDA (USDm) Q1 15 Q1 14 FY 14 FY 13 FY 12 FY 11 FY 10 Q1 15 Q1 14 FY 14 FY 13 FY 12 FY 11 FY 10 Note that the group includes the Deep Sea Metro figures applying the equity method Page 14

15 Group summary financials Condensed consolidated income statement P&L - (USD million) Q1 15 Q1 14 FY 14 FY 13 Operating revenue Other gains/losses Share of profit/(loss) from joint ventures Personnel expenses Other operating expenses EBITDA Depreciation and impairments Operating profit (EBIT) Net financial items Profit/(loss) before tax Income taxes Profit/(loss) for the period Note that the group includes the Deep Sea Metro figures applying the equity method Page 15

16 Segment reporting - MODU financials MODU Key Financials (USD million) Condensed P&L - (USD million) Q1 15 Q1 14 FY 14 FY 13 Operating revenue EBITDA Depreciation and impairments EBIT Revenues Book value own rigs Share of DSM 2 non-current assets Total book value MODU units (incl 40% DSM) Q1 15 Q1 14 FY 14 FY 13 Revenue growth -8,2 % -2,9 % -1,9 % 9,8 % EBITDA growth 6,7 % -8,8 % -2,3 % 18,7 % EBIT growth 19,7 % -22,1 % -37,6 % 26,3 % EBITDA-margin 47,2 % 40,6 % 44,2 % 44,4 % EBIT-margin 26,6 % 20,4 % 17,1 % 26,9 % Share of group revenue 3 63,8 % 58,0 % 59,9 % 56,8 % Share of group EBITDA 3 85,8 % 76,6 % 79,1 % 72,2 % Share of group EBIT 3 93,8 % 74,3 % 73,9 % 70,2 % EBITDA Note that the MODU segment includes pro-rata 40% of Deep Sea Metro figures Q1 15 Q1 14 FY 14 FY 13 1) Include drilling units, periodic maintenance and construction in progress 2) DSM = Deep Sea Metro Ltd Group 3) Before group eliminations and corporate overheads Page 16

17 Segment reporting - Drilling & Technology financials Drilling and Technology Condensed P&L - (USD million) Q1 15 Q1 14 FY 14 FY 13 Operating revenue EBITDA Depreciation and impairments EBIT Key Financials (USD million) Revenues Revenue growth -30,6 % -11,9 % -14,0 % 11,2 % EBITDA growth -106,4 % -128,9 % -91,7 % 2,2 % EBIT growth -54,5 % -168,3 % -121,6 % 5,5 % EBITDA-margin -5,6 % -1,9 % 0,7 % 7,2 % EBIT-margin -7,6 % -3,4 % -1,4 % 5,7 % Share of group revenue 1 20,9 % 25,1 % 24,2 % 26,2 % Share of group EBITDA 1-3,3 % -1,5 % 0,5 % 5,4 % Share of group EBIT 1-8,8 % -5,4 % -2,5 % 6,9 % Q1 15 Q1 14 FY 14 FY 13 EBITDA Q1 15 Q1 14 FY 14 FY 13 1) Before group eliminations and corporate overheads Page 17

18 Segment reporting - Well Services financials Well Services Condensed P&L - (USD million) Q1 15 Q1 14 FY 14 FY 13 Operating revenue EBITDA Depreciation and impairments EBIT Key Financials (USD million) Revenues Book value of equipment Cost price for equipment in use Revenue growth -24,9 % -12,9 % -12,7 % 9,0 % EBITDA growth -33,0 % -16,7 % -18,7 % 10,3 % EBIT growth -54,2 % -11,5 % -25,9 % 26,8 % EBITDA-margin 40,3 % 45,2 % 43,1 % 46,3 % EBIT-margin 17,8 % 29,1 % 25,0 % 29,4 % Share of group revenue 1 15,3 % 17,0 % 15,9 % 16,9 % Share of group EBITDA 1 17,6 % 25,0 % 20,4 % 22,4 % Share of group EBIT 1 15,0 % 31,1 % 28,6 % 22,9 % Q1 15 Q1 14 FY 14 FY 13 EBITDA Q1 15 Q1 14 FY 14 FY 13 Note that FY 13 figures include the divested Mooring business up to 30 April 2013 with a revenue of USD 11.5 million, EBITDA of USD 9.5 million and EBIT of USD 6.7 million. 1) Before group eliminations and corporate overheads Page 18

19 Group - Eliminations & Reconciliation Group Eliminations & Reconciliation (USD million) Q1 15 Q1 14 FY 14 FY 13 Operating revenue EBITDA EBIT EBIT for reportable segments Corporate overheads Gain from sale of Mooring business unit 20 Gain from sale of JV PSW Group AS 8 40% share of EBIT DSM Ltd Share of profits from JV/disposals Accounting differences Group EBIT Net financial items Group profit before tax Page 19

20 Deep Sea Metro financials Deep Sea Metro Ltd Group - Key financials (100% basis) Condensed figures - (USD million) Q1 15 Q1 14 FY 14 FY 13 Total income Operating expenses Financial items Profit/(loss) before tax Taxes Profit/(loss) Interest bearing debt: At 31 March 2015 the total interest bearing debt in the Deep Sea Metro Ltd. Group was USD 850 million. Non-current assets Cash Current assets Total assets Equity Non-current liabilities Current liabilities Total equity and liabilities Page 20

21 Summary statement of financial position Group statement of financial position Assets (USDm) 31 Mar Mar Dec 2014 Intangible assets Property, plant and equipment Financial fixed assets Total non-current assets Trade receivables Other current assets Cash and cash equivalents Total current assets Equity and liabilities (USDm) 31 Mar Mar Dec 2014 Total paid-in capital Other equity Total equity Borrowings Post-employment benefits Deferred tax liability Other non-current liabilities Total non-current liabilities Total assets Group gross interest bearing debt was USD 1,783 million (net of capitalized financing fees) at 31 March 2015 The remaining USD 110 million of the revolving credit facility was fully utilised during Q USD 249 million in cash and cash equivalents at 31 March 2015 Equity-ratio of 36 % In compliance with financial covenants at end of Q Borrowings Trade payables Other current liabilities Total current liabilities Total liabilities Total equity and liabilities Page 21

22 Summary statement of cash flow Group statement of cash flow Cash Flow - (USDm) Q1 15 Q1 14 FY 14 FY 13 Profit before income tax Cash from operations Interest paid Income tax paid Net cash from operations Net cash used in investing activities Net cash from financing activities Net change in cash and cash equivalents Cash and cash equivalents at period end Page 22

23 Summary Q Earnings visibility through USD 3.6 billion order backlog MODU exposed to current and near term re-contracting risk for several of its units Deepsea Aberdeen commenced its long-term drilling contract in April 2015 Deepsea Metro I secured new employment in Vietnam Platform Drilling secured by medium-to long term contracts Engineering capacity further adjusted to meet the reduced demand for engineering services in the North Sea basin Well Services experiencing further reduction in activities on the NCS so far in Partly neutralised by continued growth outside the NCS. Balance sheet with USD 1.1 billion in book equity and book equity-ratio of 36 % USD 249 million in cash and cash equivalents Page 23

24 President & CEO Simen Lieungh EVP & CFO Atle Sæbø Investor relations Lasse H. Johannesen, / Press contact Gisle Johanson, gijo@odfjelldrilling.com, Next event: Q results to be announced on 26 August 2015 For more information see: