Höegh LNG - the FSRU provider. 4Q 2017 Presentation of financial results 28 February 2018

Transcription

1 Höegh LNG - the FSRU provider 1 4Q 2017 Presentation of financial results 28 February 2018

2 Forward looking statements This presentation contains forward-looking statements which reflects management s current expectations, estimates and projections about Höegh LNG s 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; changes to 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, including the impact from changes in financial markets; changes in the ability to achieve 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 Agenda Highlights Operational update Market update Financials Summary 3

4 Highlights for the fourth quarter of 2017 and subsequent events Highlights Closing of the sale of the remaining 49% interest in Höegh Grace to Höegh LNG Partners for USD 86.7 million, net of debt Dividend of USD per share paid for the fourth quarter of 2017 Key financials Total income: USD 76.1 million EBITDA USD 43 million Net profit USD 20 million Subsequent events Höegh Giant commences 3-year LNGC/FSRU contract with Gas Natural Fenosa Höegh LNG Partners initiates ATM equity raising programme Dividend of USD per share declared in the first quarter of

5 Agenda Highlights Operational update Market update Financials Summary 5

6 Consistently solid operational performance across the fleet Technical availability Arctic Lady 99.87% 99.70% 99.95% 99.94% 99.79% >99.50 % Arctic Princess Independence Neptune GDF Suez Cape Ann Höegh Grace Höegh Gallant Target FSRU NB PGN FSRU Lampung Lost time injury frequency 1 Höegh Giant 1.07 <1.00 FSRU NB FSRU LNG carrier FSRU intermediate trading FSRU contract with future start-up Target 1 Per million work hours 6

7 Project execution update Höegh Giant delivered to the GNF charter GNL Penco, Chile The GNL Penco FSRU project continues its revised environmental approval process, in accordance with GNL Penco s plans Solid commercial platform given GNL Penco s long-term contract to deliver electricity to the Chilean market First cargo under the Gas Natural Fenosa contract received in Sabine Pass, US Hybrid LNGC/FSRU contract, 3 years plus options Index-linked LNGC rate when trading as a carrier Quantum Power, Ghana Quantum power/höegh LNG FSRU solution represents the fastest way for Ghana to access LNG markets Remains subject to government approval Pre-determined FSRU rate when entering an FSRU contract 7

8 Fleet allocation subject to optimisation pending contract awards Built EBITDA Charterer Höegh LNG Holdings Arctic Princess* ** Statoil Arctic Lady* ** Total Independence KN Höegh Giant 2017 GNF FSRU# Tendering/Penco FSRU# Tendering FSRU# Tendering Höegh LNG Partners Neptune ** Engie GDF Suez Cape Ann ** Engie PGN FSRU Lampung PGN Höegh Gallant Egas Höegh Grace SPEC USDm/yr Long-term contract LNGC interim trading FSRU/LNGC charter Extension option Under construction 8 * LNG carriers ** 100% basis, units are jointly owned

9 Increasing business development activity In discussions for interim employment for FSRU #8 from mid-2018 until start-up under the contract with GNL Penco in Chile LNG net exports, 2017 y/y growth vs expectations Main commercial focus on securing long-term employment for FSRU #9 and #10, which deliver in December 2018 and May 2019 respectively Currently involved in several advanced tendering processes with decisions expected in 2018 Business development activity continues to increase Coinciding with LNG trade exceeding expectations New tenders being launched Ongoing tender processes picking up momentum Source: Shell LNG outlook

10 Agenda Highlights Operational update Market update Financials Summary 10

11 mtpa mtpa LNG trade up 11% in LNG trade by exporter 350 LNG trade by importer Australia and US volumes Chinese imports exceeding South korea Qatar MEG ex Qatar Africa Asia Australia USA South America Europe Japan+Korea China RoA MEG Africa Europe North America South America Source: Waterborne LNG, IHS Markit 11

12 million tonnes/month China, Turkey and Pakistan adding to FSRU imports in FSRU imports by region FSRU imports, 2017: 33.5 million tonnes, +3% y/y China, Turkey and Pakistan adding 3.6 million tonnes to FSRU imports in 2017, offsetting a decline in Middle Eastern and North African FSRU utilisation January 2018 FSRU imports at 2.3 million tonnes, based on preliminary data, up 34% from year-ago levels China Pakistan South East Asia MEG/North Africa Europe North America Latin America Source: IHS Markit, Höegh LNG 12

13 Continued expansion of LNG supply to support FSRU demand Australia 13 mtpa USA 12 mtpa Russia 11 mtpa Cameroon 2 mtpa Malaysia 1 mtpa USA 37 mtpa Australia 8 mtpa Russia 6 mtpa Indonesia 4 mtpa Mozambique 3 mtpa Malaysia 2 mtpa Source: IHS Markit, GIIGNL, Höegh LNG 13

14 # of projects A significant number of markets contemplating importing LNG through FSRUs Floating regasification projects by region Source: IHS Markit 18 South America 6 North America 18 Europe 6 Sub-Saharan Africa Middle East South Asia Southeast Asia Existing Under construction Under development Proposed 3 Northeast Asia 2018 IHS Markit Projects in the public domain* Australia Brazil Colombia Cote d Ivoire Croatia Cyprus Hong Kong Lebanon Mexico Pakistan Turkey the UAE the UK 14 * Projects that have been mentioned in media by project developers, excluding officially awarded projects Source: IHS Markit, Höegh LNG

15 Units FSRU supply insufficient in meeting demand from projects under development FSRU fleet and orderbook 1 by owner and employment Dynagas Dynagas Maran Java-1 SWAN Kolin Kalyon Gazprom 6 uncommitted FSRUs under construction, with delivery 2018 (1), 2019 (2) and 2021 (3) In addition, long-lead items for LNGC to FSRU conversions have been reported ordered Höegh LNG Excelerate Golar LNG BW Gas Other Exmar MOL OLT Committed Available Committed NB Uncommitted NB 1 Orderbook defined as firm orders, excluding LOIs, options and conversions not firmed up Source: Höegh LNG 15

16 Increased momentum in LNGC markets rates at four-year high levels TFDE headline rate assessment: Spot vs. 1-year TC LNGC spot rates reached USD 80,000 per day towards the end of 2017, the best in four years 1-yr TC rates USD ~55,000 per day; longer-term TC rates in the low USD 60,000s All Höegh LNG FSRUs have full trading capabilities as LNGCs Fuel consumption similar to LNGCs Operating expenses similar to LNGCs Source: Clarkson Platou 16

17 Agenda Highlights Operational update Market update Financials Summary 17

18 Financial highlights for the quarter and year ending 31 December 2017 USD million 4Q Q 2017 FY 2017 FY 2016 Total incom e Charterhire and other expenses Operating expenses Administrative and BD expenses EBITDA Depreciation and impairment EBIT Net interest expense Net other financials Profit before taxes Corporate income tax Profit for the period Adjusted EBITDA Adjusted profit for the period Q2017 non-recurring items USD 5.6 million revenue recognition relating to reimbursable amounts under a time charter USD 2.5 million tax income in a subsidiary following the application of an exemption allowing for increased interest expense deductions for tax purposes 3Q2017 non-recurring items Net USD 9.0 million in increased provisions relating to historical performance guarantees offset by release of stamp duty provisions 18

19 Equity ratio, adjusted for hedging Strong financial position USD million 4Q Q Q 2016 Equity ratio development Investments in FSRUs 1,386 1,397 1,140 Investments in new buildings Other Long-term restrcited cash Marketable securities Cash and short-term restricted cash Total assets 1,959 1,992 1,713 50% 45% 40% 35% 30% 32.7% 3.6% 1.9% 0.6% 0.5% 0.5% 0.4% 39.2% 25% Equity attributable to the parent Non-controlling interests % Total equity % Interest bearing debt 1,156 1, Other % 5% Total equity and liabilities 1,959 1,992 1,713 NIBD Adjusted equity Adjusted equity ratio 39.2% 32.7% 39.7% 0% 19

20 Equity Debt Diversified capital structure with multiple financing sources Capital structure HLNG HMLP Outstanding / Mcap Comments Alternatives Commercial bank debt USD 606m 20 banks Export Credit Agencies (ECA) USD 254m 3 ECAs Senior unsecured bonds USD 313m 2 bonds Term Loan B Senior secured bonds Project bonds Sale and lease back Oslo Børs listing USD 570m NYSE listing (common units) USD 310m Non-HLNG units Equity partners Preference shares USD 118m Sum USD 2,171m 20

21 USD million Debt repayments spread out in time Debt repayment schedule Amortisation includes debt on FSRUs #8-10, assuming that financing for FSRUs #9-10 are structured similarly to FSRU # HLNG03 HLNG02 Höegh Gallant Höegh Grace Höegh Giant Independence Lampung Amortisation Amortisation refinanced debt Balloons Bonds Amortisation of refinanced debt assumes similar amortisation profile as the current facilities, and that balloons are refinanced in full Commercial debt tranches on Independence, Gallant, Grace and Lampung mature ahead of ECA tranches with 12 year tenors 21

22 USD million Capital expenditures and financing status Available liquidity USDm Cash, net of HMLP 137 Marketable securities 74 Revolving credit facility 52 Debt for FSRU #8 200 Available liquidity at 31 December % funding of FSRUs #9 and # Increased leverage on Höegh Giant / FSRU #8 59 Planned financing Capital expenditures Outstanding capital expenditures ~

23 Dividends reduced in order to preserve financial flexibility Höegh LNG dividend policy Factor Development 1Q 2018 dividends reduced to USD per share Market prospects Firm Investment opportunities Current earnings Cash requirements Debt agreements Other Increasing Delays Higher Unchanged Unchanged Dividend timing and amount The reduction is made in reflection of the project delays seen through 2017, and is intended to allow for a continued optimisation of the company s resources in an active tendering market The board of directors to reconsider the distribution level when visibility regarding the long-term employment for newbuildings under construction has improved 23

24 Agenda Highlights Operational update Market update Financials Summary 24

25 Summary Record EBITDA of 43 million and net profit of USD 20 million in Q Consistently solid operational performance measures across the global fleet Primary focus on securing firm employment for FSRUs under construction Increasing tendering activity on the back of growing LNG demand Strong financial platform with diversified financing sources 25

26 Q&A session Call-in details: Norway United Kingdom +44 (0) United States Participant passcode: Webcast: 26

27 Agenda Appendices 27

28 Segment information Group ex. HMLP USD million HMLP Operations BD and project execution Corporate and other Total Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Income statement Freight revenues Management and other income Share of results from inv. in JVs TOTAL INCOME Charterhire expenses - - (8.9) (5.2) (8.9) (5.2) Bunker and other voyage related expenses (0.2) (0.2) Operating expenses (6.1) (3.9) (7.5) (6.0) - (0.6) - - (13.6) (10.5) Project administrative expenses (0.9) (0.6) (1.8) (2.3) (1.2) (1.4) - - (3.9) (4.3) Group administrative expenses (1.7) (2.0) (3.1) (3.5) (4.8) (5.5) Business development expenses (1.9) (1.6) - - (1.9) (1.6) EBITDA (3.0) (3.6) (3.1) (3.5) USD million HMLP Operations BD and project excecution Corporate and other Total 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec Selected items in Financial Position Tangible assets Investments in FSRUs and NBs Liabilities - - Interest-bearing debt