Investor Presentation. January 2018

Transcription

1 January 2018

2 The dividend yield company 40 $3.1 bn 11.1 y 8.5% Vessels EBITDA backlog Charter tenor Dividend Yield 2

3 Market for ship financing Bonds Bank Shipping financing Equity Leasing Long term charters 3

4 Investment strategy $350m Modern Long term Acceptable Multi Annual new Vessels Charters Counterparties Segment investments 4

5 Charter backlog by client end of Q adjusted for recent transactions EBITDA* backlog of USD 3.1 billion Fleet 18 Tankers Major European container line 23 % 11 % 4 % 5 % 7 Oil-service 6 % 2 % 2 % Avg. remaining charter tenor of 11.1 years 11 % 5 % 3 % 6 6 Container vessels Car Carriers 8 % 13 % 7 % 2 Gas Carriers 1 FPSO *EBITDA backlog based on management s estimates on DB-1, certain options not being exercised, LIBOR forward curve, USDNOK and finance lease adjustments 5

6 Acquisition of three suezmax crude tankers with 10 years charter Transaction details Purchase price Seller s credit Net purchase price Charter duration Charter type Charterer Listing USD 55.7 million USD 12.5 million USD 43.2 million 10 years Hell & high water bareboat Nordic American Tankers Limited New York Stock Exchange, Ticker NAT Vessel details # Vessels 3 Vessel type Suezmax Crude Tanker Vessel size 157,000 dwt Scheduled deliveries June, August & October 2018 Ship yard Samsung Heavy Industries, Korea 6

7 Acquisition of suezmax crude tanker with 14 years charter Transaction details Purchase price Seller s credit Net purchase price Charter duration Charter type Charterer Owner USD 54 million USD 7 million USD 47 million 14 years Hell & high water bareboat Okeanis Marine Holdings SA. The Alafouzos family Vessel details Vessel name Poliegos Vessel type Suezmax Crude Tanker Vessel size 158,000 dwt Built January 2017 Ship yard Sungdong Shipbuilding and M.E., Korea 7

8 Suezmax case study Suezmax resale value (USDm) Book value vs. lease outstanding (USDm) Suezmax resale Okeanis net purchase price NAT net purchase price Book value, 25 years to scrap Okeanis lease outstanding* NAT lease outstanding** *Last purchase option of USD 17.2m after year 12 **Purchase obligation of USD 13.6m after year 10. Purchase option after year 5 at a 5% premium to lease outstanding. 8

9 Acquisition of two vessels with long term charters to Aker BP ASA Transaction details Total purchase price USD million Total bank loan USD 65.0 million Charter type Bareboat charter Charter expiry Sep/Dec 2029 Bareboat rate USD 17,253 per day per vessel Bareboat EBITDA USD 12.6 million p.a. Charterer Aker BP ASA Credit rating BB+ Vessel details Vessel NS Orla & NS Frayja Vessel type Platform Supply Vessel (PSV) Built Sep/Dec 2014 Ship Yard Hyundai Mipo Dockyards, Korea 9

10 Update on Dhirubhai-1 Production uptime of close to 100% in Q Only USD 30m debt outstanding on the vessel at the end of Q Expect production on the MA field to continue beyond the end of the firm contract in September 2018 Purchase option at the end of the charter contract at USD 255m Reliance and BP to expand production on the KG-D6 block by investing about USD 6 billion to develop three additional fields Field development plans on the MJ fields and Satellite fields submitted in October The MJ field will be developed with an FPSO solution and Dhirubhai-1 is a candidate for this field 10

11 Adjusted EBITDA and net profit EBITDA adjusted for finance lease effects (USDm) Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Adjusted net profit (USDm) Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 11

12 Growth in cash dividends for 16 consecutive quarters Dividend yield Adjusted earnings per share (USD cents) % 2 p.a. Pay-out ratio on adjusted Q3 EPS Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q % Dividend per share (USD cents) % Adjusted earnings yield 10.9% 2 p.a. Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 See Q Financial Report Note Per , Q DPS annualized, share price of NOK 71.40, NOK/USD of

13 Strong liquidity position Cash and securities available for sale per Q3 17 (USD million) Cash Available drawing facilities Total available cash Bonds in AMSC Total available liquidity Comments No capex commitments 13

14 Bond overview Bond terms OCY02 OCY03 OCY04 Face value NOK 1,000 million NOK 1,000 million NOK 750 million Repurchased NOK million NOK million Coupon NIBOR % p.a. NIBOR % p.a. NIBOR % p.a. Maturity March 2019 April 2020 September 2021 Tap issue NOK NIBOR % p.a. in July 2014 Financial covenants bonds Q Q Minimum Book Equity of 25% 32.6% 33.3% Minimum Cash of $ 25 Million EBITDA / Interest expenses > 2.0x 5.1x 5.0x Dividend limitations requires liquidity > $ 30 Million or 3% of NIBD 14

15 Risk management $ % Counterparty Residual value Operations Interest cost Financing Tax 15

16 Outlook Lower transaction volumes for modern vessels in 2017, driven by lower newbuilding activity Expected increased newbuilding activity and transaction volumes in 2018 Ocean Yield well positioned to continue to grow the fleet Strong balance sheet and liquidity position Access to capital markets Intends to continue policy of paying attractive and increasing quarterly dividends, however at a conservative growth rate 16

17 Appendix 17

18 Profit & loss Income statement Q2 Q3 Amounts in USD million Operating revenues Finance lease revenue Income from investments in associates Total revenues and other income Vessel operating expenses (5.1) (4.1) Wages and other personnel expenses (1.4) (2.7) Other operating expenses (1.4) (1.4) EBITDA Depreciation and amortization (24.8) (26.7) Impairment charges and other non recurring items - - Operating profit Financial income Financial expenses (17.3) (19.0) Foreign exchange gains/losses (5.4) (41.4) Mark to market of derivatives Net financial items (15.2) (14.6) Net profit before tax Tax payable (0.0) (0.0) Change in deferred tax (3.7) (7.9) Income tax expense (3.7) (7.9) Net profit after tax Non-controlling interests Equity holders of the parent Earnings per share (USD) Comments Revenues Increased due to full quarter earnings for 4 vessels delivered during Q2 Vessel opex Q2 was impacted by replacement of gas turbine generator according to scheduled maintenance Wages and other personnel expenses Provisions for bonuses for key employees due to positive share price development in Q3 Depreciation Impacted by delivery of vessels during Q2 Deferred tax expense Change in deferred tax is offset against deferred tax asset on balance sheet 18

19 Adjusted net profit Adjustments Comments Q2 Q3 Amounts in USD million Net profit Impairment charges Foreign exchange gains/losses Mark to market of derivatives (6.2) (44.4) - Tax payable Changes in deferred tax, net Adjusted net profit Mainly related to bond and bank loans in NOK USD/NOK cross currency and interest rate swaps Non-cash and offset against deferred tax assets on balance sheet 19

20 Balance sheet Balance sheet Q2 Q3 Q2 Q3 ASSETS (USD million) EQUITY AND LIABILITIES (USD million) Goodwill Equity to holders of the parent Vessels and equipment ,340.7 Non-controlling interests* Investments in associates Total equity Finance lease receivables and related assets Investments in AMSC Bonds Interest-bearing debt Restricted cash deposits Mobilization fee, advances and other Other non-current assets Mark to market of derivatives Shares in Solstad Farstad ASA Field abandonment provision Deferred tax assets Total non-current liabilities ,519.1 Total non-current assets Interest-bearing short term debt Mark to market of derivatives Trade receivables and other receivables Trade and other payables Cash and cash equivalents Total current liabilities Total current assets Total liabilities Total assets Total equity and liabilities Equity ratio 32.6 % 33.3 % *Non-controlling interest of USD 10 million relates to the vessel SBM Installer 20

21 Quarterly EBITDA and net profit EBITDA per quarter (USDm) Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Net profit per quarter (USDm) Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 21

22 Strong value proposition for our clients Up to 100% leverage Up to 15 years tenor Floating or fixed interest rate Purchase options Flexible leasing product at a competitive cost of capital On- or offbalance sheet 22

23 Two chemical tankers with 12 years charter to Navig8 Ltd. Vessel details No of vessels 2 x Vessel type IMOII chemical tanker Vessel size 45,000 dwt Delivery October & November 2016 Transaction details Purchase price Seller s credit Charter duration Charter type Charterer USD 35 million USD 6 million 12 years Hell & high water bareboat Navig8 Ltd. ( Navig8 Group ) 23

24 49.5% interest in six mega container vessels with 15 years charter Vessel details No of vessels Type Vessel capacity Delivery Yard 6 x Container vessel 19,500 TEU Jul 16 until Feb 17 Samsung H. I., Korea Financial details Equity ownership 49.5% JV Partner Quantum Pacific Shipping Equity investment USD 162 million Bank debt Non-recourse to Ocean Yield Charter type Bareboat Charter duration 15 years Charterer Major European container line Illustration photo 24

25 Scorpio Tankers Inc. 4 LR2 product tankers with 13 years charter Vessel(s) Yard LR2 product tankers 4 x 110,000 dwt Sungdong Shipbuilding, Korea Built 2016 Gross price USD 49.5 million per vessel Seller credit 5% Charterer Contract Scorpio Tankers Inc. 13 year hell and high water bareboat charter ScorpioTankers Inc. Book equity of USD 1.3 billion Listed on NYSE with ticker STNG Following the merger with Navig8 Product Tankers, the fleet consists of 105 owned and finance leased vessels 38 LR2 tankers 12 LR1 tankers 41 MR tankers 14 Handy tankers Average age of 2 years 25

26 Navig8 Chemical Tankers Inc. 8 chemical tankers with 15 years charter Chemical tankers, IMOII Vessel(s) 4 x 37,000 dwt 4 x 49,000 dwt Yard Hyundai MIPO, Korea STX, Korea Built Gross price USD 36.2m per vessel USD 40.5m per vessel Seller credit 10% 10% Charterer Navig8 Chemical Tankers Navig8 Chemical Tankers Contract 15 year bareboat charter 15 year bareboat charter Navig8 Chemical Tankers Inc. Established in 2013 by Oaktree and Navig8 Group Book equity of USD 434 million Oaktree remains a majority owner (57%) Listed on Norwegian OTC ( CHEMS ) Fleet of 32 modern chemical carriers including newbuildings Commercial management done by Navig8 Group, which has COA s with major international petrochemical companies 26

27 Hartmann Two liquefied ethylene carrier newbuildings Vessels Yard Liquefied ethylene carriers 2 newbuildings Sinopacific Offshore & Engineering, China Delivery Q4 16 and Q2 17 Charterer Sub-charterer Yard cost EBITDA 15 years (10 years fixed rate) to SPVs owned by the Hartmann Group 10 years sub-charter + 5x1 years extension options to SABIC Petrochemicals B.V. USD 81 million per vessel USD 21 million p.a. Hartmann Group Charterer is SPVs owned by the Hartmann Group Activities include ship-owning, technical and commercial, management, incl. management of Gaschem pool with ~35 vessels SABIC Petrochemicals The vessel sub-charter is SABIC Petrochemicals B.V., a subsidiary of SABIC SABIC is 70% owned by the Saudi Arabian government and has a market cap of USD 65 billion Charter contract structured around subcharter with assignment of sub-charter + step-in rights 27

28 Höegh Autoliners 6 car carriers on long term charter Vessel(s) Charterer Charter guarantor Car carriers Beijing & Xiamen, 4900 CEU PCTCs, 2010 built Jacksonville & Jeddah, 6500 CEU PCTCs, 2014 built Trapper & Tracer, 8500 CEU PCTCs, 2016 built Höegh Autoliners Shipping AS Höegh Autoliners Holding AS Charters Bejing & Xiamen 8 years until 2022 Jacksonville & Jeddah 12 years until 2026 Trapper & Tracer 12 years until 2028 Höegh Autoliners One of 5 leading global providers of car and rolling cargo shipping and logistics Operates a fleet of +50 car carriers Book equity of about USD 712m (charter guarantor Höegh Autoliners Holding AS) Höegh Autoliners Holdings AS is a privately owned company controlled by the Höegh family with 61.2% and A.P. Møller Maersk with 38.8% 28

29 SBM Offshore SBM Installer Vessel(s) Built / Yard Diving support & construction vessel SBM Installer 2013 / Keppel, Singapore Ownership Ocean Yield: 75% SBM: 25% Delivery December 2014 Charter 12 years hell & high bareboat charter until 2026 Certain purchase options post year 5 Charterer SBM Offshore Services Inc. Guarantee from SBM Holding Inc. S.A. SBM Offshore Charter guarantor is SBM Holding Inc. S.A. Listed in Amsterdam with ticker SBMO EBITDA 2016 of USD 725 million EBITDA backlog of about USD 17 billion Market cap of about EUR 3 billion Main activities includes design, supply, installation, operation and life extension of FPSO vessels 29

30 Akastor Aker Wayfarer Vessel(s) Deepwater subsea equipment support vessel Aker Wayfarer Built / Yard 2010 (Modification completed in 2016) Shipyard Charterer STX Europe (Søviknes), Norway AKOFS Offshore AS with guarantee from Akastor ASA Charter Hell & high bareboat charter until 2027 Sub-charter Petrobras on a 5 year contract + 5 year extension option Akastor ASA Counterparty is AKOFS Offshore, with guarantee from Akastor ASA Implicit guarantee from Aker Solutions ASA by Norwegian law as the transaction was concluded before the split Akastor listed in Oslo with ticker AKA Aker ASA owning 36.7% and controlling 48.8% 30

31 Farstad Supply Far Senator & Far Statesman Vessel(s) Anker handling tug supply vessel Far Senator & Far Statesman Contract 12 years Hell & high bareboat until 2025 Counterparty Farstad Supply AS Shipyard / Built STX Langsten, Norway / 2013 Key features Acquisition price 24,000 BHP 755 m2 deck dimensions NOK 611 million per vessel Farstad Solstad Farstad Shipping, Solstad Offshore and Deep Sea Supply has agreed to combine, creating the largest company in the high-end global offshore supply vessel industry with 154 vessels. The company will operate a fleet of about 33 CSVs, 66 PSVs and 55 AHTSs. Solstad Farstad ASA is listed on Oslo Stock Exchange (ticker SOFF NO). Ocean Yield owns 3% of the company. 31

32 Connector Vessel Ultra deepwater multipurpose flex-lay construction vessel Connector Shipyard / Built STX Europe (Søviknes), Norway / 2011 Key features Book value Debt outstanding 2x subsea cranes with 400mt/100mt capacity DP3 & 26,000 bhp USD 207 million USD 121 million / 12 years / Eksportkreditt Guarantee: 70% GIEK (12 years) and 30% commercial banks (5 years) 32

33 Reliance Industries Dhirubhai-1 Vessel(s) Charterer Shipyard / Built Contract Floating Production, Storage and Offloading (FPSO) unit Purchase options Dhirubhai-1 Reliance Industries Ltd. Jurong Shipyard, Singapore / 2008 conversion Bareboat + Operating agreement until Sep 18 Cash EBITDA of about USD 100 million p.a. Last purchase option in Sep 18 of USD 255 million Book value USD 302 million (+ intangibles of USD 10m) Debt outstanding USD 30 million Reliance Industries Reliance Ind. is a conglomerate within oil & gas, refining, textiles, retail & telecom with listing in London and Mumbai Investment grade credit KG-D6 block license owned 60% by Reliance Industries, 30% by BP and 10% by Niko Resources Gas prices in India is regulated and substantially below import prices Government recently approved new pricing formula with substantially higher prices for new deep-water fields 33

34 Management Lars Solbakken Chief Executive Officer (1957) CEO, Norwegian Car Carriers CEO, Ship Finance International General Manager, Fortis Bank (Nederland), Oslo Branch Various positions in Christiania Bank and Wilh. Wilhelmsen M.Sc. from Norwegian School of Economics and Business Administration Eirik Eide Chief Financial Officer (1970) CFO, Ship Finance International Head of Corporate Finance, Orkla Finans Various positions in Orkla Finans, Fortis Bank and DNB Master of Business and Economics from Norwegian Business School Andreas Røde Head of Business Development and M&A Managing Director, Corporate Finance, Danske Bank Director, Corporate Finance, SEB Various Investment Banking positions Master of Arts in Accounting and Finance, University of Edinburgh and University of California Berkeley Marius Magelie SVP Finance & IR (1982) Research analyst and Partner, ABG Sundal Collier Equity Research, Kaupthing M.Sc. in Financial Economics from Norwegian Business School Andreas Reklev SVP Investments (1983) CFO, Team Tankers International Various positions in Camillo Eitzen & Co Bachelor of Science in Finance from Norwegian Business School Kristine Kosi Chief Accounting Officer (1983) Group Accounting Manager, Umoe Senior Associate and Auditor, PWC Master of Business and Economics and Master of Professional Accountancy from Norwegian Business School Erik Hiller Holom VP Investments (1989) Corporate Finance, Danske Bank Corporate Finance, SEB M.Sc. In Industrial Economics and Technology Management from NTNU 34

35 Notes 35

36 Investor Relations Marius Magelie, SVP Finance & IR , 36