Siem Offshore Inc. Presentation CEO Idar Hillersøy 2 September 2015

Transcription

1 Siem Offshore Inc. Presentation CEO Idar Hillersøy 2 September 2015

2 Disclaimer This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Siem Offshore ( SIOFF ) and its subsidiaries. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the Siem Offshore businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although Siem Offshore believes that its expectations and the information in this Report were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this Report. Siem Offshore nor any other company within the group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the Report, and neither Siem Offshore, any other company within the group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the Report. Siem Offshore undertakes no obligation to publicly update or revise any forward-looking information or statements in the Report. There may have been changes in matters which affect Siem Offshore subsequent to the date of this presentation. Neither the issue nor delivery of this presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of Siem Offshore has not since changed, and Siem Offshore does not intend, and does not assume any obligation, to update or correct any information included in this presentation. The contents of this presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice. This presentation is subject to Norwegian law, and any dispute arising in respect of this presentation is subject to the exclusive jurisdiction of the Norwegian courts. 2

3 Contents 1. Company Overview 2. Financials 3. Contract Backlog, Future Yard Instalments and Financing 4. Market Outlook and Summary 3

4 Company Overview Development Continued Growth since Incorporation in July 2005 Financial Development Fleet Development Operating revenue Operating margin USD million Vessels In Operation

5 Company Overview Two Primary Segments - The Offshore Support Vessel segment and the Industrial segment The Siem Offshore Group OSV Segment AHTS 1) 10 OSCV 4) BHP, bollard pull ~300te. Average age of 5 years. PSV 2) 12 ISV 1 ROV & crane, moonpool. Average age of 2 years. Industrial Segment Siem Offshore Contractors JOIDES Resolution Experienced submarine cable and umbilical installation, repair and maintenance contractor serving the worldwide Offshore Wind farm Renewable Industry as well as the oil and gas. Combining extensive in-house engineering expertise with the OSV fleet of the group. A scientific core sampling research vessel with a mission to explore the Earth below the oceans of the world in order to investigate the origin and the evolution of the Earth. DP, non-riser drilling/core vessel. PSVs from ~ 3,500 5,500 dwt. Average age of 7 years. Canadian flagged 3) 6 Safe transfer of personnel to fixed and floating structures. Delivered in 1H Other vessels 10 Siem WIS Designed and developed a pressure control device ("PCD") which can improve managed pressure drilling ("MPD") operations. Canadian flagged vessels. Harsh-weather fleet. 9 x Brazilian Built vessels. 1 x Well-stimulation vessel. Other Investments 5 Combat Management Systems for the Brazilian Navy. Other investments, including property. 1) Incl. two vessels owned by a partner, 2) Incl. three 51% owned 3) 50% owned, 4) Agreed sale of the OSCV Siem Daya 1

6 Company Overview Positioning - Positioned in the High-End Segment of OSV Providers - Strong Position in Providing High Quality Tonnage to Key Clients Globally High-End Segment Larger vessels Increased complexity in operations Higher barriers to entry Well-Intervention Vessels Larger OSCVs AHTS > 25k BHP PSV > 4k dwt Mid-Range Segment AHTS > 10k BHP PSV > 2k dwt Low-End Segment AHTS < 10k BHP PSV < 2k dwt 6

7 Company Overview OSVs - Tailored for harsh environment and demanding operations Well-Intervention Vessels Offshore Subsea Construction Vessels AHTS > 28K BHP Large PSVs 7

8 Company Overview - Geographical Footprint - Siem Offshore has Local Presence in Key Markets Halifax Kristiansand (HQ) Leer St. John s Groningen Gdynia Houston Accra Natal Aracaju Macaé Rio de Janeiro Perth 8

9 Company Overview - Vessels under Construction - Nine vessels under construction, including one vessel for Secunda Q 2Q 3Q 4Q Q 2Q 3Q 4Q Q 2Q 3Q 4Q OSRV, Siem Marataizes CLV, Siem Aimery 8 Yrs Firm + Options Long term contract with Subsidiary PSV DF, Siem Pride 5 Yrs Firm + Options PSV DF, TBN 1 PSV DF, TBN 2 PSV DF, TBN 3 WIV, Siem Helix 1 7 Yrs Firm + Options WIV, Siem Helix 2 7 Yrs Firm + Options AHTS, Avalon Sea (Note 1) 5 Yrs Firm + Options Under Construction Contract Contract option Contract with subsidiary Mortgage debt financing secured for all vessels under construction. The CLV shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable installation projects within the offshore wind farm segment. Total firm backlog for vessels under construction at approximately USD 761 million as of end second quarter Note 1) Vessel under construction in the 50% owned entity Secunda.

10 Company Overview Siem Offshore Contractors - Service offering combines extensive engineering experience with in-house high-end OSV fleet Project Management Studies Engineering Contracting Utilizing in-house high-end OSV fleet Strong backlog of approx. USD 250 million with tier 1 clients in the Offshore Wind farm Renewable Industry. ISV AHTS CLV (Delivery 2016) PSV 10

11 Company Overview Siem Offshore Contractors - First two contract awards in the Offshore Wind farm Renewable Industry in final phase Awarded in March 2012, scheduled to be completed in Installation of 86 submarine cables providing the inner array grid connection. Awarded in February 2013, scheduled to be completed in Installation of 86 submarine cables providing the inner array grid connection. 11

12 Company Overview Industrial Segment Overseas Drilling Ltd. (JOIDES Resolution) The client, TAMRF, has extended the contract for the JOIDES Resolution until 30 September 2016 and holds further options to extend the charter until 30 September 2023 on an annual basis. Siem WIS The Julius project commenced late April and Siem WIS is still onboard Maersk Gallant delivering the pressure control device ( PCD ) services. The recent operation for the Julius project has been a success and has again proven the advantages of the PCD technology. Presently mobilizing for the Gullfaks project. 12

13 Contents 1. Company Overview 2. Financials 3. Contract Backlog, Future Yard Instalments and Financing 4. Market Outlook and Summary 13

14 Financials - Income Statement - Highlights First Half 2015 (all in USD) Operating Revenue Operating Margin Net Profit (loss) 491 Operating Revenue in first half 2015 positively influenced by project execution in Siem Offshore Contractors ( SOC ) and more vessels in operation compared to same period in Operating Margin in first half 2015 positively influenced by recognition of margin in SOC, more vessels in operation, and effects of cost optimization. Soft short term market in the North Sea puts pressure on margins. Net loss of USD 54 million in 1H 2015 includes impairment on vessels values of USD 56 million. 14

15 Financials - Financial Position 30 June 2015 (all in USDm) Other Current Assets Cash & Cash Equivalents Non-Current Assets Current Liabilities Non-Current Liabilities Book equity ratio of ~ 34%. Cash and cash equivalents of approx. USD 75 million as of 30 June Net interest bearing debt as of 30 June 2015 of USD 1,083 million. Current cost of debt approximately 4.3% p.a., including the effect of interest rate derivatives. Total Equity 15

16 Contents 1. Company Overview 2. Financials 3. Contract Backlog, Future Yard Instalments and Financing 4. Market Outlook and Summary 16

17 Contract Backlog - Approximately USD 1.62bn of Firm Contract Backlog as of 30 June

18 Contract Backlog - OSV Segment - Employment for vessels in operation Vessel Type Ownership 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Siem Sasha PSV 51 % Sophie Siem PSV 100 % Siem Louisa PSV 100 % Siem Hanne PSV 100 % Siem Carrier PSV 100 % Siem Supplier PSV 100 % Hugin Explorer PSV 100 % Siem Atlas PSV 100% Siem Giant PSV 100% Siem Symphony PSV 100% Siem Pilot PSV 51% Siddis Mariner 1) PSV 51% Siem Marlin OSCV 100% Siem N-Sea OSCV 100% Siem Daya 1 2) OSCV 100% Siem Daya 2 OSCV 100% Siem Spearfish OSCV 100% Siem Stingray OSCV 100% Siem Pearl AHTS 100% Siem Emerald 4) AHTS 100% Siem Sapphire AHTS 100% Siem Aquamarine 3) AHTS 100% Siem Ruby AHTS 100% Siem Topaz AHTS 100% Siem Diamond 3) AHTS 100% Siem Amethyst AHTS 100% Siem Garnet 4) AHTS 0% Siem Opal AHTS 0% Siem Moxie 5) ISV 100% Agreed sold 1) Employment for Siddis Mariner includes firm time charter for Siem Offshore Contractors. 2) The backlog for Siem Daya 1 includes an assumption of completion of sale in August ) Siem Aquamarine and Siem Diamond currently placed into lay-up 4) Employment for Siem Garnet and Siem Emerald includes firm time charter for Siem Offshore Contractors 5) The ISV Siem Moxie shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable installation projects within the offshore wind-farm segment. Total order backlog in % and USD mill. 55% 90 39% % 99 11% 40 Contract Contract option Spot work Contract with subsidiary 18

19 Contract Backlog - OSV Segment - Employment for vessels in operation (con t) Vessel Type Ownership 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Big Orange XVIII WSV 41 % Burin Sea AHTS 50% Panuke Sea PSV 50% Ryan Leet MPSV 50% Trinity Sea AHTS 50% Venture Sea AHTS 50% Scotian Sea MPSV 50% Total order backlog in % and USD mill. 97% 18 67% 23 23% 9 4% 2 Siem Maragogi OSRV 100% Parnaiba FSV 100 % Propriá FSV 100 % Capela FSV 100 % Siem Piatã FCV 100 % Siem Pendotiba FCV 100% Siem Caetes FSP 100% Siem Carajas FSP 100% Total order backlog in % and USD mill. 100% % % 25 82% 22 Contract Contract option Spot work 19

20 Future Yard Instalments per end 2Q 2015 Amounts in USD million Future Yard Instalments Total OSRVs PSVs CLV WIV Total Debt facilities Total OSRVs PSVs CLV WIV Total The Company has secured mortgage debt financing for all of its eight wholly-owned vessels currently under construction. The AHTS vessel under construction for Secunda is not included in the table. Mortgage debt financing is also secured for this vessel. Cash balance, cash from operations and Rights Offering of USD 100 million to cover mismatch between future yard instalments and committed debt facilities. 20

21 Debt balloon maturities Low refinancing risk prior to balloon repayment related to the sale of Siem Daya 1 Extension agreed on maturity for mortgage debt financing (6 AHTS vessels) from 2015 to USD 60 million revolving credit facility with Siem Industries Inc. included with maturity in Loan to value at low ratios for balloon instalment of mortgage debt financing in 2017, i.e. low refinancing risk. NOK 600 million (USD 76.4 million) of unsecured bonds with maturity in NOK 700 million (USD 89.1 million) of unsecured bonds with maturity in

22 Contents 1. Company Overview 2. Financials 3. Contract Backlog, Future Yard Instalments and Financing 4. Market Outlook and Summary 22

23 Market Outlook OSV Segment The North Sea spot market for AHTS vessels and PSVs continue to be soft on both rates and utilisation. Vessel owners have continued to place vessels into lay-up and additional lay-ups are expected if activity remains weak. Projects expected to absorb vessels are cancelled/postponed by oil operators. Industrial Segment SOC is experiencing an increased tendering activity for EPIC-based contracts for both medium- and high-voltage power cables in the offshore wind farm ( OWF ) market with scheduled marine installation activities in 2017, 2018 and SOC is also tendering for various operations and maintenance contracts. In Brazil, tendering activity for OSVs for the rest of 2015 is expected to be limited. In West Africa, the activity level and demand for PSVs and AHTS vessels have dropped, and a large number of vessels are currently idle waiting for work. There are few new tenders for OSVs, and we expect this trend to continue into The outlook for the OSV market is expected to remain challenging. 23

24 Summary High-end modern fleet of vessels providing value added services to our clients globally. Harvesting on extensive engineering experience, coupled with in-house high-end vessel portfolio, in returning positive project margins in Siem Offshore Contractors. Six of nine vessels under construction have secured long term contracts. Mortgage debt financing for all nine vessels has been secured. Further positioning the company in the high-end segment following entry into Well- Intervention vessel segment in 2014, with first of two vessels under construction to be delivered in first half 2016 and commence 7 year firm contract from delivery. Limited refinancing risk until 2018 related to debt balloon maturities. Contract backlog of approx. USD 1.6bn for OSVs and Industrial Segment as of end 2Q USD 100m rights issue, fully underwritten by largest shareholder, secures financial platform going forward. The rights issue will be completed in medio September

25 Thank you for your attention Q&A 25