Boa Offshore update March Results Review Helge Kvalvik, CEO

Transcription

1 Boa Offshore update March Results Review Helge Kvalvik, CEO

2 Disclaimer This presentation is made by Boa Offshore (or the Company ). The information contained herein include statements that are forward-looking in their nature. These forward-looking statements include all matters that are not historical facts and are based on the Company s current intentions, believes and expectations about among other things, the Company s results of operations, financial condition, prospects, growth, strategies and the industry in which the Company operates. Such forward-looking information and statements reflect current views with respect to future events. The Company cannot give any assurance as to the correctness of information and statements related to such future events. Furthermore, these forward-looking statements involve known and unknown risks, uncertainties and other factors that are in many cases beyond the Company s control that could cause the actual results of operations, financial condition, liquidity and the development of the industry in which the Company s businesses operate to differ materially from the impression created by the forward-looking statements contained herein, because they relate to events and depend on circumstances that may or may not occur in the future. Although the Company believes that its intentions, beliefs and expectations, and the statements in this presentation, are based on reasonable assumptions as of today, the Company can not give any assurance that the actual results will be as set out in this presentation. Financing the Company involves risks, and several factors could cause the actual results, performance or achievements of the Company to be materially different from the impression created by the forwardlooking statements contained herein. Neither the Company, nor any company within the Boa Offshore Group, is making any representation or warranty (express or implied) as to the accuracy, reliability or completeness of the information and statements in this presentation, and neither the Company, any company within the Boa Group, nor any of their directors, officers or employees will have any liability to any persons resulting from the possible use of information in the presentation. 2 2

3 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Market Outlook 3

4 Boa Offshore Group summary Boa Offshore results Full year 2013 EBITDA continued upwards trend with NOKm 430 reported - Up from NOKm 382 in 2012 and NOKm 238 in 2011 EBITDA 2H 13 of NOKm 221, up from NOKm 209 in 1H 13 and NOKm 204 in 2H 12 Net profit of NOKm 69 significantly impacted by non-recurring financial costs Balance sheet NIBD/EBITDA increased according to expectations to 4,9x due to drawn down of debt related to ongoing newbuilds Liquidity situation post several re- financing actions also continued to improve, with Cash of NOKm 748 reported per YE 2013 (NOKm 220 YE 2012) Stable/growing underlying markets Most of the segments where Boa Offshore operates continue to experience stable to increasing demand The only open spot in the consolidated backlog is Boa Deep C currently working with BMSI through 2014, but with a number of long-term prospects pursued from 2015 Initiated Newbuilding program fully financed AHTS 2 expected to be announced shortly 4

5 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Boa Barges 6 Market Outlook 5

6 Boa Offshore Group in short Boa Offshore AS is a Norwegian limited company owned by Ole T. Bjørnevik and his family Boa Offshore currently operates and manages a fleet of 40 units in various segments, of which 34 owned (including newbuilds) Subsea installation and construction (Boa OCV/BMSI) Seismic EM vessel operations (Boa SBL) Sea transportation and load-out and launching of heavy objects (Boa Barges/BMSI) Rig moves (tugs/ahts) Harbor and costal towage and salvage operations (tugs) Performs the technical, commercial and operational tasks on behalf of all its subsidiaries, with approximately 355 employees. Global presence and operations Engineering and project management capacity out of Trondheim and Houston Leading player in the global market for heavy lift barges Head Office in Trondheim (Norway) and offices in Houston (USA) and Gdynia (Poland) LTM EBITDA of NOKm 430 Fleet value of NOKbn 3.6 per (excl newbuilds) Approximately NOKbn 6 fully invested (incl newbuilds) 2013 Net Interest Bearing Debt of NOKbn 2.1 Value adjusted equity ratio of 47% as of YE

7 Description/operations Assets Business overview Concentrated in three segments Offshore Vessels 20 Barges 9 Tugs OCV Boa Sub C OCV Boa Deep C SBL Boa Thalassa SBL Boa Galatea Newbuilding program 3 leased subsea/ocv vessels 10 semi-submersible barges 6 deck cargo barges 3 other barges Newbuild BB 37 3 ASD escort tugs 5 harbour / towage tugs 1 harbour tug World wide operations Ongoing modernization of the fleet, incl NFDS Successfully owns and operates two of the world s most high spec OCVs World Wide operations Leading player in the global heavy lift market Continuous new building program since 1999 Management of Myklebusthaug Dina Lifter/Launcher Mid-Norway and North Sea operations Tugs has been the primary business of Boa since inception Revitalization of this business segment with a substantial fleet renewal BMSI solution/ project provider for: SURF (subsea, umbilicals, risers and flowlines) IRM (inspection, repair and maintenance) of platforms Floater moves and installations Also use of 3 rd party vessels Tonnage provider, also solution/ project provider for: All engineering related to barges. In house design Turn key transportation projects Load out and launching Dry docking operations Float over Tonnage provider and solution/ project provider for: Salvage operations Turn key towage / transport / handling operations 7

8 Boa Offshore Group fleet overview Based on independent broker estimates, the total charter free market value of the Boa Offshore fleet was NOKbn 3.6 as of YE 13, excluding newbuilds Fleet value by segment YE 2013 excl newbuilds Unchanged 6M/6M Boa Deep C and Boa Sub C represent more than 50% of the delivered vessels total value The SBL vessels Boa Thalassa and Boa Galatea have a combined average value of NOKm 620 Barges represent NOKm 770 whereas tugs represent approx. NOKm 230 Gross LTV incl Newbuilds of 61%, net LTV of 45% (NOKm) Built Share Vessel value* Gross debt** Gross LTV Boa Deep C % 908 Boa Sub C % 1,085 Sum Boa OCV 1,993 1,013 51% Boa Thalassa % 310 Boa Galatea % 310 Sum Boa SBL % Barges % 770 Tugs and others % 230 Sum barges/tugs 1, % Unsecured bond 559 EBITDA by segment YE 2013 Total delivered vessels 3,612 2,468 68% Newbuilds - 1, % Adjusted fleet value 4,694 2,873 61% * Vessel values according to independent shipbroker valuations pursuant to existing loan agreements, two brokers OCV/SBL, one broker Barges & Tugs ** Outstanding loan balance as of YE 13 8

9 Boa contract backlog larger vessels All major vessels virtually firm through 2014 Boa Deep C* the only owned vessel currently without firm long-term backlog out of the larger vessels in the Boa Offshore Fleet Deep C occupied in US GoM through 2014 on various commitments with BMSI (wholly owned) The Polar Queen* and Topaz Captain are not owned and chartered in however, prospects for these vessels are relatively good in US GoM and Mexico Both vessels now firm with 3 rd parties well into H2 14 Newly chartered in vessel Olympic Boa has already secured some work in US GoM in 2014 Solid interest for both Deep C and Sub C from 2015 Galatea and Thalassa expected to work with current client through optional period * When Boa Deep C and Polar Queen work for BMSI, open days btw contracts can occur. However, a number of contracts for both vessels now secured in

10 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Market Outlook 10

11 Boa Offshore Group consolidated historical financials Since 2011 Boa Offshore has streamlined its business model, now showing results Key financial items Boa Offshore 2013 EBITDA increased to NOKm 430 (growth of 12% y/y) Boa OCV posted a record strong 2013 with an EBITDA of NOKm 277 (+15% Y/Y) Barges record strong with EBITDA of NOKm 94 SBL stable at NOKm 55 (higher 2H 13 than 1H 13) «Other» flat at NOKm 4. Net profit of NOKm 68 significantly hampered by nonrecurring financial costs associated with re-financing and partly drawing new loans in the group Net interesting bearing debt increased to NOKbn 2.1 YE due to ongoing NOKbn > 2 newbuilding program Net capex of approximately NOKm 500, majority in 2H 13 Initiated newbuilding program fully funded and fully financed Solid key credit matrices Value adjusted equity 47% Annualized NIBD/EBITDA 4.9x Key balance sheet items NOKm NIBD Equity * Annualized 11

12 Boa Offshore Group relative to peers NIBD/EBITDA Value adjusted equity EBITDA/Interest expense Return on assets ** Source: SpareBank 1 Markets *Boa Offshore EBITDA figure includes P&L expensed provision for class/periodical maintenance (NGAAP) ** Adjusted for non-recurring financial items reported in 2013 P&L 12

13 Boa Offshore initiated newbuild program fully financed Vessel Design Yard Delivery /status Debt financing Ownership Guarantor Total cost Other AHTS #1 VS 491 Fosen/ Chinese hull 1H'14 60% guaranteed SMN/GIEK, Eksportkreditt funding NFDS Offshore 1 AS Boa Offshore, Boa Holding & Det NOKm ~650 Nordenfjeldske Dampskibsselskab + interests 28k bhp, 600t winch, ROV hangar AHTS #2 VS 491 On hold - conditioned on fully financing Boa Shipping AS N/A NOKm > k bhp, 600t winch, ROV hangar MPSV #1 VS 495 Chinese 1H 15 70% bank, CDB & Sinosure Boa PSV AS Boa Offshore & Boa Holding USDm ~75 IMR/light construction MPSV #2 VS 495 Chinese 1H 15 70% bank, CDB & Sinosure Boa PSV AS Boa Offshore & Boa Holding USDm ~75 IMR/light construction Boa Barge 37 Boa Chinese 2H 15 SMN Boa Barges AS Boa Offshore & Boa Holding NOKm ~ m semi submersible Initiated newbuild program fully financed AHTS # 2 will be initiated when the unit is fully financed In discussion with banks and yard announcement expected shortly Approximately 60-70% of needed equity for project injected by YE 13 Remaining part/portion to be accelerated when financing and yard outfitting contract finalized Parent company guarantee for all newbuilds from Boa Offshore/Boa Holding and guarantee from Det Nordenfjeldske Dampskibsselskab AS (AHTS #1 only) The two MPSV vessels have in place refund guarantees from the yard s banks. Vessels are scheduled to be delivered in 1H 2015 Remaining capex e for newbuilding program (incl AHTS 2) of > NOKbn

14 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Market Outlook 14

15 Boa OCV state of the art vessels Offshore Vessels Barges Tugs and others Boa OCV consist of the two state of the art offshore construction vessels Boa Deep C and Boa Sub C, built in 2004 and 2007 respectively Boa OCV key P&L Account for > 50% of Boa Offshore values and EBITDA EBITDA 2013 of NOKm 277, up from NOKm 240 in NOKm 1,013 gross debt and NIBD of NOKm 807 per YE 2013 NIBD/EBITDA of 2.9x 2013 Shipbrokers average valuation per YE 2013 of NOKbn ~2.0 for both vessels Gross/net LTV per 1H 13 of 51/40% Relatively strong outlook for subsea construction vessels, despite oil companies announcing lower growth in investments Identified attractive possibilities for Deep C and Sub C from year class of vessel to be performed on Deep C in March/April. EBITDA typically not materially impacted as provisions to cover class cost are charged in the P&L on a running basis and due to earned allowance days - Deep C Currently engaged by BMSI through

16 Boa SBL specialized seismic vessels Offshore Vessels Barges Tugs and others Owns two modern seismic vessels being the world s first custom built vessels for EM seismic, built 2008/2009. On long term contracts to EMGS: Thalassa firm until Dec x12 months options. Galatea firm until July x12 months options. EBITDA 2013 of NOKm 55, in line with NOKm 57 in 2012 Boa SBL key P&L 2H 13 EBITDA of NOKm 29 slightly up H/H from NOKm 26 Somewhat higher USD/NOK sequentially Strong operational track record with a commercial on-hire of 99% last three years Average shipbroker values* of NOKm 620 YE13 NIBD of NOKm 350 = net LTV 56% Although purpose built for EMGS, vessel design is generic (MT 6000 series) and vessels can be converted into: Traditional 3D seismic/obn/obc seismic Survey/ROV support IMR/light construction Offshore Wind Farm support * Source: According to average of two independent shipbroker valuations 16

17 Boa Barges world leading operator Offshore Vessels Barges Tugs and others EBITDA 2013 of NOKm 94, up from NOKm 83 in 2012 Boa Barges AS key P&L Boa Offshore Group has since 1998 had continuous newbuilding program for barges at Chinese yards Boa Offshore Group today operates 20 barges of different capabilities (incl. newbuild) worldwide Also carrying out management of Myklebusthaug Dina Lifter/ Launcher Built up an in-house engineering capacity that is unique in the industry From 2002 Boa Offshore Group developed its own inhouse design, giving substantial cost savings related to newbuilding costs Boa Offshore Group can offer a unique combination of barges and tugs to provide total turn-key projects for transportation, launching or dry docking operations by barges Engineering and project management performed from Trondheim and Houston Has been in involved in several major field developments world wide Current high tendering activity across several industries including; Oil & Gas, Power, Offshore Wind, Civil Construction 17

18 Tugs and others Offshore Vessels Barges Tugs and others 2013 EBITDA of NOKm 4 in other segments including eliminations (negative). Main contributors in other segments are the tug fleet, smaller barges and BMSI Tugs and others key P&L Boa Offshore (parent) strong results, BMSI up somewhat Y/Y, while the Tug fleet experienced some (temporary) challenges in 2013 Boa currently operates 9 tugs and 9 smaller barges (in addition to the 10 larger barges in Boa Barges AS) in various subsidiaries within the group BMSI provides engineering, construction and contracting services related to fixed and floating offshore platforms and subsea field developments, based in Houston US. A full-service solution provider with an experienced inhouse engineering group, project managers and execution staff with extensive track record. Capable of supporting vast offshore installation campaigns including: IMR, SURF, and mooring installations Three vessels, Olympic Boa, Polar Queen and Topaz Captain currently chartered to support BMSI s strategy Currently working in US GoM and Mexico Contracts for most subsidiaries and assets in other segments are of a short to medium term character negatively affected by non core assets which where sold in 4Q 11 Market outlook for all of the other segment is stable to positive 18

19 Segment outlook: Further improvement in EBITDA expected in years ahead OCV/Subsea stable/slightly lower when Deep C expected to commence new contract(s) Several leads for Sub C and Deep C from 2015 Recent contracts in OCV segment and bidding activity are good leading indicators Barges SBL NFDS/Newbuilds Tugs/BMSI High market activity and delivery of newbuilds projected to modestly increase EBITDA Delivery of Boa Barge 34, 43 and 44 in 2013, and BB 37 in 2015/16 will add to earnings Offshore construction activity in general showing growth Boa Barges expected to grow steadily going forward SBL earnings expected to remain stable EMGS expected to continue exercising remaining options (until Dec 16 and July 17, respectively) Vessels have proven to be a cost efficient and reliable tool for EMGS No expansion or investment plans for Boa SBL at present NFDS AHTS with delivery in 1H 14 Dayrates in North Sea spot market in 2013 for largest AHTS above NOK420k per day Recent term fixtures in Kara Sea and Brazil also supportive for term contracts Offshore Vessel Newbuilds will add significantly to earnings from 2015 BMSI with good prospects in active US GoM and Mexico markets Considering more chartered in vessels when timing is right (ref Olympic Boa) Tugs improvement in 2014 Long term some expansion could be justified against contracts * Boa Marine Services Inc. 19

20 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Market Outlook 20

21 Industry Book to Bill as leading indicator for Barges, OCV, and BMSI Offshore construction backlogs currently at all-time high (Saipem, Subsea7, Technip) The book-to-bill (B-t-B) ratio was at 1.3x in 2013 Last three years average of 1.3x Above 1.0 indicates future growth as order intake exceeds turnover Lead time for the major projects are in general 2-3 years Indicates higher subsea/offshore construction activity in years to come, and most likely demand for construction vessels and also barges Industry Book to Bill In addition, demand increase seen from smaller/mid-size IMR and construction players Source: Pareto Research, company reports, Boa Offshore 21

22 Substantial growth in subsea wells and FPSOs expected: OCV, BMSI Subsea tree installations World Wide FPSO installations World Wide Estimated subsea tree installations is a key indicator for vessel activity Number of tree installations likely to increase from an average of < 300 p.a. in up to within 2-4 years (IHS/ODS-Petrodata) Even stronger growth in +2000m water depth Most important markets are North Sea, Brazil, and West Africa with US GoM and Australia as runners up OCV: Boa Sub C and Boa Deep C also well suited for FPS installation due to bollard pull capacity Average number of FPS installations p.a. < 20 last 5 years, and below this level in 2011/2012 Prospect list indicate per year on average next five years (IHS/ODS- Petrodata). Some projects will be postponed/turned down Includes FPSO, FSRU, FSO, Semi, TLP and Spars Source: ODS/IHS, Boa Offshore 22

23 Very few available OCVs in m category with DP2/3 and min 250t crane OCV fleet m LOA/min DP2 Current fleet of offshore construction vessels (all modes) count < 55 vessels in category m LOA and min DP 2 capabilities Fleet will increase to around > 65 in 2015 Some vessels uncertain of timing of delivery. Fleet growth matching demand drivers (subsea wells, FPSOs etc, see previous slide) Most vessels in this category ordered in with delivery have been contracted on long-term charters Good prospects for Deep C and Sub C, both available from early/mid 2015 These two vessels offers some unique features with wider beam, Crane and bollard pull capacity etc Boa Sub C positioned in a higher segment with significantly higher cost and replacement cost of vessels Source: ODS/IHS, Boa Offshore, UNO, Pareto Research 23

24 Market drivers Barges and BMSI Barges Main Markets US GoM subsea activity - BMSI Most of Boa Barges main markets are developing favorably in the short to medium term Number of fixed platform installations in Mexico will increase from average of 7 in to 17 in , of which 24 already under construction BB 29 and 30 on contract in Mexico from YE 13 Same pattern in West Africa, whereas North Sea is flattening out/coming off somewhat Post the Macondo incident in 2010 subsea and deepwater activities have increased again in US GoM Around 25 subsea installations performed in 2012, and more than 35 in 2013, and around 70 estimated for 2014 (most of the X-mas trees already under construction) Number of Floater drilling rigs will increase from around 40 today to > 50 in 2015/2016 Leading indicator for future subsea activity Source: ODS/IHS, Boa Offshore, EWEA 24

25 North Sea AHTS spot Market > 20,000bhp North Sea AHTS > 20k bhp spot market dayrates North Sea market AHTS > 20,000 Fleet Boa Offshore has one large AHTS 28,000 bhp under construction through NFDS with delivery 1H 14, and plans for one more with delivery 1H 15 Average dayrate last 9 years around NOK 400,000 Average dayrate was NOK 550,000 Dayrates significantly down in in a combination of falling demand (rig count etc) and too many new vessels delivered to the market Dayrates recovered in 2013 in a combination of: Stable/decreasing North Sea AHTS fleet (few newbuilds delivered) and Rising demand, rig moves Improved PSV market, spill-over effect Other demand more dominant in years (see coming slides) Currently around 25 AHTS vessels > 20,000 bhp working in the North Sea Fleet has increased from 11 vessels in new AHTS > 20k bhp vessels delivered from European yards , i.e. around 20 vessels have left for other markets (mainly Brazil) Number of vessels working peaked in 2010 Only 4-5 large AHTS vessels under construction for delivery (1x Far and 2x Boa/NFDS, 1-2x GBB) Source: ODS Petrodata, Boa Offshore, Pareto Research 25

26 North Sea AHTS Market: Floater Rigs working Supportive demand factors: # rigs 60 Number of floater/semisubmersible drilling rigs working up in 2013 vs Larger increase to come in with > 10 new rigs entering North Sea Estimated to includie: Island Innovator, Songa x4, Sedco 712, Stena Carron, Blackford, Ocean Patriot, DS Aberdeen, Bollsta Dolphin, COSL Promoter, COSL Prospector UK Norway Source: ODS Petrodata, Pareto Research 26

27 North Sea AHTS Market: Other demand drivers Number of FPSO installations have been limited in 2013, will increase again in 2014 and years ahead North Sea FPS installations Goliat Knarr Cheviot Greater Stella Rosneft/Exxon have contracted 6 AHTS vessels for their Kara Sea campaign in the summer of 2014/2015, with options for 2016/17 Gryphon Huntington Athena Usige Gorm In addition, offshore drilling campaigns offshore Greenland, Alaska and Canada could materialize in (Cairn, Statoil, Shell etc) In 2011, 12 larger OCVs were employed Offshore Greenland for Cairn Energy, whereof 4 large AHTS vessels Possible Arctic campaigns In sum, minimum 6 vessels will leave the North Sea spot market for the coming years (at least seasonal) Source: ODS Petrodata, Boa Offshore, Company reports, Pareto Research 27

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