Miclyn Express Offshore. Macquarie Australia Conference - 4 May, 2011

Transcription

1 Miclyn Express Offshore Macquarie Australia Conference - 4 May, 2011

2 Company profile Leading provider of service vessels to the expanding offshore oil and gas industry across South East Asia, Australia and the Middle East Long operating track record and experienced management Commenced operations in the mid 70 s Miclyn Offshore and Express Offshore Transport merged in 2007 to form Miclyn Express Offshore Long standing customer relationships with high degree of repeat business Strong, experienced and incentivised management team leading a workforce of over 900 employees Geographically diversified Middle East UAE Saudi Arabia Iran India South East Asia Thailand Malaysia Indonesia Vietnam Australia Large and diverse fleet OSVs Tugs and Barges 116 vessels + 8 under construction 1 Crew/Utility Vessels Coastal Survey Vessels 1. As at 1 May

3 Provider of choice Business model creates high barriers to entry Young Fleet Strong HSQE record Total Mobile Offshore Fleet Ave Zero lost time injuries in 3.4 years (over 20 million man hours) 2 Total recordable injury frequency rate of zero in 3.4 years (over 20 million man hours) 2 HSQE accreditation essential to obtaining pre-qualified bidder status MEO never been rejected for a charter contract due to noncompliance with HSQE practices Very robust systems embedded in culture Strong established customer relationships >25 years relationship Infrastructure in key operating regions Support bases in proximity to customer operational locations in Indonesia, Thailand, Saudi Arabia and UAE Samson Maritime investment provides operational base within close proximity of NW Shelf projects in Australia Ability to repair fleet with minimal downtime Enables close interaction with customers 1. Source: Clarkson,Offshore Intelligence Monthly, Feb-11, as at 1 Feb As at 30 April

4 Vertically integrated model Shipyard provides a key competitive advantage Location: Size: Activity: Batam, Indonesia (20km from Singapore) Land area ~133,350sqm (with slipway) Sea frontage of approximately 216m Almost 100 permanent staff Repairs and maintenance Complex conversions and customisations Newbuilding (OSV s) Constructor I Newbuild timetable: Control over cost, timing and quality Ability to prioritise internal work Vessel Type Expected completion Magellan I & II AHT May/Jul 2011 Sovereign I & II AHTS Mid 2012 Save 20-30% margin charged by external shipyards Higher DCR s, utilisation and increased switching costs through conversion and customisation 3

5 Fleet strategy Maximising utilisation is key Fleet strategy that delivers attractive growth OSVs Build 2-3 high end OSV s p.a. in Batam shipyard Purchase vessels off the market against long term contracts that meet IRR hurdle rates Crew/Utility Vessels Fleet renewal delivering top line growth through higher margins and utilisation Marginal expansion of fleet over time where opportunities exist with key customers Tugs and Barges Pursue opportunities to put fleet to work in projects that require a spread of vessels e.g. Schenker, Van Oord Focus on relationships with clients to support long term prospects and improve utilisation Focus on markets with higher day rate potential e.g. Australia Earnings Visibility Actively pursue long term charter contracts to drive up utilisation Maintain vessel mix that is conducive to long term charterability Coastal Survey Vessels Service booming near shore civil construction activity in Australia Leverage client relationships formed in this segment to pursue offshore contracts 10

6 Offshore Oil and Gas Industry Strong pipeline of new field developments in key operating regions Number of Offshore Oil and Gas Fields South-East Asia Middle East Australia Shallow water (<500m) Deep water (>500m) Production Development, construction or potential Production Development, construction or potential Offshore oil will account for approximately 1/3 of global oil production in 2011 Asia Pacific and Middle East expected to account for 36% of global offshore oil production in 2011 As existing fields reach peak production, future continued investment in offshore field development is needed to meet growing energy demand Significant number of discoveries in Asia Pacific and Middle East to fill supply gap Majority of fields in production and under development in Asia Pacific and Australia are in shallow water, MEO s core operating segment Source: Clarkson,Offshore Intelligence Monthly, Feb-11 4

7 Offshore Vessel Services Industry Still supply issues in AHTS and PSV segments AHTS NEWBUILDING DELIVERIES PSV NEWBUILDING DELIVERIES 16,000+ BHP 12,000-15,999 BHP 8,000-11,999 BHP 3,000-7,999 BHP BHP = Brake Horsepower 5,000+ DWT 3,500-4,999 DWT 2,000-3,499 DWT 1,500-1,999 DWT 1,000-1,499 DWT DWT = Deadweight Tons Market yet to fully absorb pre GFC AHTS and PSV orders, but post GFC vessel orders have dropped off New rig orders entering market, increase growth in subsea activities and increased E&P activities indicate that vessels will be absorbed by % of global OSV fleet is >25 years old, generally newer vessels are preferred by customers MEO s OSV fleet is largely customised for specialised services that attract long term charters, enjoying strong utilisation rates of 90%+ Source: Fearnley Offshore Supply (February 2011), DNB NOR Markets 5

8 Offshore Vessel Services Industry Rates appear to have bottomed out Term fixture rates AHTS Worldwide (US$) Term fixture rates PSV Worldwide (US$) 7-10,000 BHP 10-11,999 BHP 10,000+ BHP 12-16,499 BHP 5-6,999 BHP 16,500+ BHP 7-9,999 BHP 3,000+ DWT <750m2 deck >750m2 deck Significant fall in AHTS and PSV day rates since pre GFC highs Industry consensus seems to be that rates in these segments have bottomed out and will start to trend up in 2012 as newbuilding orders are absorbed and utilisation improves Lag factor between Oil Company CAPEX allocation and realisation of contract awards Rates outlook for MEO s fleet varies by vessel segment: Crew/Utility Vessels primarily involved in long term production support, low exposure to rate fluctuations OSV s specialised nature and long term charter profile cushions the fleet from rate fluctuations, but potentially some upside for vessels rolling off contract in 2012 as global offshore activity picks up Tugs and barges seeing stronger rates for larger barges (300+ foot), but rates for smaller barges and tugs remain flat Source: Fearnley Offshore Supply (February 2011) 6

9 Geographic Update South East Asia 21 Crewboats and 4 OSV s working with Chevron in Thailand under an advanced supplier agreement Other customers include PTT, Saipem, McDermott and CNN/Petronas Dominant player in Thailand, will grow with customers operations Primarily involved in production support Long term contracts with a high degree of renewability Oil production in Thailand expected to increase by 7% in 2011 Opportunity to grow business further in Malaysia and Indonesia Indonesian Joint Venture incorporated and bidding on various long term prospects Indonesian cabotage laws recently relaxed for specalised vessels and AHTS >5,000 BHP Local flag structure set up in Malaysia Regional Vessel Spread Region OSVs Crew/Utility Vessels Tugs and Barges Thailand Malaysia 2-2 Indonesia Other 1-3 Total Regional Offshore Oil Production Source: Clarkson,Offshore Intelligence Monthly, Feb-11 7

10 Geographic Update Middle East Strong operating presence and support infrastructure in Saudi Arabia 4 crew/utility vessels working directly for Saudi Aramco and 4 more working for them indirectly through Saudi Argas Saudi Aramco has stepped up production to compensate for Libyan export shortfall Offices and workshops Fujairah and Hamriyah free trade zones in UAE supporting 18 vessel operation 6 crew/utility vessels working directly for Barwil Ship Services Other customers include McDermott, Zakheer, Adnoc, Van Oord, DPE 4 crew/utility vessels and 1 OSV working for Iranian Offshore Oil Company (IOOC) through a local partner in Iran, supported through UAE Attractive day rates and internal expertise mitigates risk but no significant ramp up in exposure planned No impact experienced from Middle East onshore tensions Regional Vessel Spread Region OSVs Crew/Utility Vessels Tugs and Barges UAE Saudi Iran Other Total Regional Offshore Oil Production Source: Clarkson,Offshore Intelligence Monthly, Feb-11 8

11 Geographic Update Australia LNG developments gathering momentum with Australia set to become the second largest LNG exporter by 2020 First coal seam gas to LNG projects are being developed in Queensland with full approvals granted; Curtis (BG Group) and Gladstone (Santos/Petronas/Total) Gorgon (Chevron) and Pluto 1 (Woodside) under development and gathering momentum Number of large projects in FEED stage; Wheatstone (Chevron), Ichthys (Inpex/Total), Prelude (Shell), Pluto 2 & 3 (Woodside), APLING (Origin/ConocoPhillips) MEO s first phase of participation is in the civil construction industry assisting in the development of infrastructure to support growing offshore LNG industry Key customers are contractors to the oil majors such as Schenker, Boskalis, John Holland, Van Oord etc Strategy to leverage off these relationships and existing relationships with oil majors in other regions to extend participation into offshore activity Rapid expansion of fleet in Australia through participation in projects requiring a spread of vessels e.g. Schenker, Van Oord Charter-in, charter-out activity extending in the region to meet growing demand for vessels in these projects Potential to replace charter-in vessels with owned vessels for long term contracts Regional Vessel Spread Region OSVs Tugs and Barges Coastal Survey Vessels Barrow Island Cape Lambert Dampier Other Total Australian LNG Exports +24% Source: Oil and Gas Australia, Mar-11 9

12 Operational Update Increase in charter-in, charter-out activity off the back of project work and strong client relationships Van Oord rock transportation in the Arabian Gulf Schenker port development at Barrow Island John Holland port expansion at Cape Lambert Currently 13 charter-in, charter-out vessels in operation for MEO (not included in fleet count) Significant increase in shipyard revenue for 3 rd party vessel upgrades Charter-in vessels require significant upgrade work ahead of entering Schenker project to meet Australian requirements Recent and upcoming changes in fleet mix: Zumaia VI (Multipurpose Tug) service near shore civil construction activity in Australia (attractive rates, solid outlook) MEOTHAI1 (AHTS) commenced 5 year contract with Chevron Thailand in Feb-11 Four new crew/utility vessels to be delivered in Jun/Jul, likely deployment in SE Asia and Middle East Magellan I (AHT) commencing 2+2 year contract in Malaysia in May-11 Magellan II (AHT) likely to enter Schenker project on completion Sovereign I and II (AHTS) delivery scheduled for mid 2012 when the market is expected to tighten Continue to scan the market for M&A and partnering opportunities 11

13 Financial Update Strong growth profile, attractive operating margins, low tax and well funded to deliver future growth Analysts predicting strong growth in FY11 Attractive operating margins return a lot of cash to reinvest in the business. FY10 Actual US$m FY11 Analyst Consensus 1 US$m Implied Growth FY10 Gross Margin % 1H FY11 Gross Margin % Revenue % EBITDA % OSVs Crew/Utility Vessels Tugs and Barges EBIT % NPAT % CSV s Group A strong balance sheet with financial capacity to maintain strong growth. Total equity US$267 million at 31 Dec 2010 US$120 million term debt facility 4 years left to maturity Sustainable low effective tax rate. Effective tax rate of 5% sustainable in medium term Reflects long standing treatment of shipping in international waters outside Australia (e.g. Singapore tax exemption under Section 13A) US$30 million revolver US$27 million undrawn at 31 Dec 2010 Net Debt to CY10 EBITDA 1.7x Net Debt to Equity (31 Dec 2010) 44% 1. Includes Macquarie, Morgan Stanley, JP Morgan, Deutsche Bank and CCZ Equities 12

14 Summary Ideally positioned in a growth industry Improving market conditions Attractive pipeline of opportunities Strong balance sheet Financial capacity to fund strong growth Proven operational excellence 13

15 Important notice and disclaimer Reliance on Third Party Information The views expressed here contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by Miclyn Express Offshore Limited ( Miclyn Express Offshore ). Forward Looking Statements Some of the information contained in this document may constitute forward-looking statements that are subject to various risks and uncertainties. Nothing in this document is a promise or representation as to the future. Statements or assumptions in this document as to future matters may prove to be incorrect. Miclyn Express Offshore does not make any representation or warranty as to the accuracy of such statements or assumptions. You acknowledge that circumstances may change and the contents of this document may become outdated as a result. You also acknowledge that no audit or review has been undertaken by an independent third party of the assumptions, data, results, calculations and forecasts contained in or referred to in this document. You should make your own independent assessment of the information. No Warranties We makes no warranty, express or implied, nor assumes any responsibility in its contents for its accuracy, completeness, its use for any general of particular purpose, nor that such items or use of such items would not violate or infringe rights of others. No Offer of Securities Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell Miclyn Express Offshore securities in any jurisdiction. Pro-Forma Financial Information References to pro forma financials exclude any exceptional items. A reconciliation to statutory financials is contained within the prospectus, available at our website. 14