Topaz Energy and Marine

Transcription

1 Topaz Energy and Marine Financial results for the year ended 31 Twelve months revenue of US$244m; stable EBITDA margin of 48 Dubai, UAE, Monday 26 th March 2018: Topaz Energy and Marine ( Topaz ), a leading offshore support vessel company, today announces its results for the twelve months ended 31 ( the period ). Consolidated Revenue EBITDA EBITDA Margin () ppt ppt Net Profit/(Loss) before exceptions 2 (6) NM (2) (24) NM Net Profit/(Loss) Margin () ppt ppt Net Profit/(Loss) after exceptions (98) (79) NM (102) (116) NM Net Profit/(Loss) Margin () NM NM - NM NM - Core Vessel Utilization ppt Business Highlights Safety continues to be our top priority. We are pleased to report no Lost Time Injuries (LTIs) during the past 24 months. Overall core fleet utilization at 65, amidst persistent challenges in the sector. Solid EBITDA margin of 48 for the year, despite rate pressures. Topaz continues to maintain an industry-leading backlog of US$ 1.5bn through established long-term contracts, adding to the company's long earnings visibility and financial strength. Multiple strategic contract wins during the year including a 5-year (plus 2 years of options) contract with Dragon Oil in Turkmenistan for six vessels, a strategically important 1-vessel contract for Total in Azerbaijan and the deployment of our Africa fleet on long-term contracts. Early commencement of our strategic Tengizchevroil ( Tengiz ) project with two vessels in operation during - six months ahead of schedule. Further optimization of costs with US$20m of savings in operating costs and overheads in compared to the previous year. Successful refinancing of Senior Notes via the issuance of US$375m Senior Notes due in Fully compliant with financial covenants; covenants proactively reset during the period.

2 René Kofod-Olsen, Chief Executive Officer, Topaz Energy and Marine said, was a challenging year for the industry, but we believe the worst of the downturn is now behind us will also be challenging but we are cautiously optimistic as market conditions improve. Oil markets are more positive with demand and supply close to equilibrium. The number of projects being commissioned is increasing, with the supermajors reporting improved results for Q4. Despite the market conditions, Topaz made good progress during the year against our strategy. We secured a number of important contracts during the year including Dragon Oil in Turkmenistan and Total in Azerbaijan. We commenced operations of two vessels for our Tengiz contract in Q4, six months ahead of schedule. This is a gamechanging contract for our business. Topaz, with its partners, developed an entirely new class of vessel to meet the client s needs. Strategic projects such as Tengiz have helped us to maintain our industry leading backlog of US$ 1.5bn. Our core fleet utilization improved to 67 in Q4 from Q3 s 64. Our fleet in the Caspian, which accounts for more than 75 of our revenue, delivered a utilization rate of 80, illustrating the resilience of our Caspian business. Excluding laid-up vessels, our core MENA fleet was 84 utilized. Our core utilization for Africa was 40 for the year, although we experienced a significant increase in demand in the latter part of the year, and have since mobilized additional tonnage into the region to meet demand. We also reactivated a total of seven vessels across all our markets, which were laid-up at the end of. For our five vessels which are still in layup, we are evaluating options as part of our fleet renewal program. We have continued to invest in the business whilst generating additional cost reductions and efficiencies from the business, resulting in cost savings of $20 million for the year. We invested in systems supporting vessel maintenance, safety, customer relationship management, crew training, competency programs and localization initiatives to make Topaz more efficient and effective. Financially, we maintained a healthy business profile and delivered Revenues of US$244 million and a solid EBITDA margin of 48, testament to our focus on cost control and efficiency is going to be an exciting year for Topaz and the OSV industry, as consolidations are likely to transform the industry. Topaz, with our strong client relationships and unique marine logistics offerings, continue to actively review strategic options. 2

3 Financial Review REVENUE Caspian MENA Africa Total Revenue for the period was US$244m, a decrease of 13 compared to US$282m revenue in. This decrease is mainly the result of (i) off-hire of barges and tugs in Kazakhstan of US$17m, (ii) loss of revenue of US$13m due to layups and pressure on rates and utilization in the MENA and Africa regions, (iii) loss of revenue of US$13m due to lower utilization in Azerbaijan as the projects our vessels were contracted for reached completion and (iv) off-hire/standby rate on two subsea vessels of US$8m. However, this decrease is partially offset by the commencement of revenue from the Tengiz contract of US$16m. DIRECT COSTS Crew cost Technical maintenance Depreciation / dry-dock Mobilization charges Others Total For the year ended ember, our direct costs decreased by US$9m, a 5 improvement year on year, to reach US$169m in, compared to US$178m incurred last year. We continued our relentless focus on cost optimization, which allows us to operate in an efficient yet safe manner. Hard negotiations with our suppliers achieved savings on maintenance, while the decrease in depreciation/dry-dock is mainly due to an impairment charge reducing the depreciation amount. The increase in other costs is mainly due to costs associated with the Tengiz contract on supervision during the construction phase of the vessels. 3

4 EBITDA Caspian MENA Africa (1) - (1) (5) NM Corporate / adj (1) (1) (7) (5) NM Total EBITDA decreased by US$27m, or 19, to US$118m during the period compared to US$145m in the same period last year. This decrease mainly relates to (i) EBITDA reduction due to off-hire of barges and tugs in Kazakhstan of US$16m, (ii) EBITDA reduction of US$8m due to layups and pressure on rates and utilization in the MENA and Africa regions, (iii) EBITDA reduction of US$11m due to lower utilization in Azerbaijan as the projects on which the vessels were working came to end, (iv) EBITDA reduction of US$9m due to off-hire/standby rate on two subsea vessels. However, this decrease was partially offset by the EBITDA from the Tengiz contract of US$2m and by savings in overheads of US$6m. Administrative Expenses: Administrative expenses decreased by US$6m, or 18, to US$27m during the period, compared to US$33m during the same period last year. This is due to lower staff costs and various efficiency initiatives implemented across operational offices. Finance costs: Finance costs increased by US$19m, or 32, to US$78m during the period compared to US$59m during the same period last year due to the one-off costs of US$19m related to the refinancing of our Senior Notes. Income tax expense: Income tax expense decreased by US$1m, or 6, to US$13m during the period compared to US$14m in the same period last year. 4

5 Cash flow The cash generation as a percentage of EBITDA for the twelve months ended ember was 107 (January-ember : 112). The table below sets out a breakdown of cash flow for the year ended 31 ember : CASH FLOW EBITDA Changes in working capital (6) (3) Cash generated from Operations Cash conversion PPT Income tax paid (4) (5) (18) (15) -17 Interest paid (22) (29) (55) (70) -27 Net Cash generated from operating activities 2 (7) Net Cash generated from Tengiz - (1) Cash used in investing activities (8) (7) (44) (29) -34 Cash provided by financing activities (16) 42 (52) 18 NM Dividend paid to JV partner (9) - (9) (4) -56 Increase/(decrease) in cash and cash equivalents (31) 28 (16) 39 NM Investing activities include US$6m towards expansion CAPEX and US$23m towards maintenance, mobilization and upgrade CAPEX. Investing activities also include milestone CAPEX payments of US$148m to Vard under the new build contract for the Tengiz project, which was fully pre-funded by advance payments received from the client. Financing activities include bilateral debt repayment of US$30m, US$2m for repayments of parent company debt in March and US$46m of interest payments. We have drawn US$25m from our Revolving Credit Facility (RCF) in Q4, for general liquidity purpose. Unutilized banking lines as of 31 ember include an RCF of US$75m expiring in April We successfully reset our covenants in ember, thereby providing us additional headroom on our financial covenants, while remaining within the previous covenants. 5

6 Financing Facility Maturity Interest Rate Repayment Conventional and Islamic facility** 7 years 3-month LIBOR Quarterly with bullet repayment Outstanding as of US$ ,225 Senior Notes 5 years Bullet 366,409 Total Topaz Loans 662,634 *Recorded as per International Financial Reporting Standards (IFRS) in US$. ** Includes US$25m drawn from the RCF facility in Q4. Bank Covenants The senior secured borrowing arrangements include undertakings to comply with certain financial covenants. As of 31 ember, Topaz is compliant with all financial covenants. Financial Covenant Threshold As of 31 Net Interest-Bearing Debt to EBITDA < x Headroom 14 Tangible Net Worth > US$275m US$313m Headroom 14 Free liquidity (in millions) > US$30m US$153m Headroom 410 EBITDA to DSCR > 1.20x 1.42x Headroom 18 Capitalization The following table sets out Topaz s consolidated cash, total indebtedness, shareholders funds, total capitalization and net debt at the end of the last five quarters. 6

7 In US$ million - 16 Mar-17 Jun-17 Sep Change 17 v 16 Cash & Cash Equivalents Floating rate senior secured loans (4) Other loans / Senior Notes¹ Subordinated shareholder funding (2) Total debt Total equity (120) Total capitalization 1,189 1,176 1,160 1,145 1,084 (105) Net debt (24) Total debt / LTM EBITDA Net debt / LTM EBITDA ¹ Recorded as per International Financial Reporting Standards (IFRS) About Topaz Energy and Marine Topaz Energy and Marine is a leading international offshore support vessel company providing logistics support and marine solutions to the global energy industry with primary focus on the Caspian Sea, the Middle East, West Africa and Subsea operations. Headquartered in Dubai, Topaz Energy and Marine operates an existing fleet of ~100 offshore support vessels with an average age of approximately nine years. Topaz Energy and Marine is a subsidiary of Renaissance, a publicly traded company listed on the Muscat Securities Market in Oman. In addition, Standard Chartered Private Equity holds a minority position in the company. For further information, please contact: Investor Relations: Morten Wedel Jorgensen Head of Strategy & Corporate Planning Tel: ir.topaz@topazworld.com Media Contacts: FTI Consulting topaz@fticonsulting.com Dubai: Jon Earl / Anca Cighi Tel: London: Ben Brewerton / George Parker Tel: +44 (0)