Boa Offshore update - 3 September Q 14 Results Review Helge Kvalvik, CEO

Transcription

1 Boa Offshore update - 3 September Q 14 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 2Q14 summary Boa Offshore results EBITDA of NOKm 100 reported in 2Q 14, flat sequentially and down from NOKm 115 in 2Q LTM EBITDA of NOKm 422 Ten year class survey and docking of Boa Deep C negatively impacting OCV in 2Q 14, start-up costs on AHTS Boa Bison Second half 2014 EBITDA expected to improve Balance sheet NIBD/EBITDA LTM increased according to expectations to 5,8x due to drawn down of debt related to ongoing newbuilds Value adjusted Equity of 47%, virtually unchanged from 48% in 1Q 14 Cash decreased to NOKm 518 due to newbuilding program and docking of BDC Initiated newbuilding program fully financed Debt ratios and cash position about to stabilize, before improving from mid 2015 based on current newbuilding program Stable/growing underlying markets Most of the segments where Boa Offshore operates continue to experience stable to increasing demand 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 41 units in various segments, of which 34 owned (including newbuilds) Subsea installation and construction (Boa OCV/BMSI) Sea transportation and load-out and launching of heavy objects (Boa Barges/BMSI) Rig moves (tugs/ahts) Seismic EM vessel operations (Boa SBL) 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) Q2 14 LTM EBITDA of NOK 422 million Q2 14 Net Interest Bearing Debt of NOKbn 2.5 Q2 14 value adjusted equity ratio of 47% Fleet value of NOKbn 4.2 per H1 14 (incl Boa Bison, excl newbuilds) Approximately NOKbn 6 fully invested incl newbuilds when delivered 6

7 Description/operations Assets Business overview Concentrated in three segments Offshore Vessels 20 Barges 10 Tugs OCV Boa Sub C OCV Boa Deep C SBL Boa Thalassa SBL Boa Galatea Boa Bison 3 newbuilds 3 chartered subsea vessels 10 semi-submersible barges 6 deck cargo barges 3 other barges Newbuild BB 37 initiated 4 ASD escort tugs 5 harbour / towage tugs (of which 1 leased) 1 harbour tug World wide operations Ongoing modernization of the fleet, including 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 BMS 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 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Market Outlook 8

9 Boa Offshore Group consolidated historical financials Since 2011 Boa Offshore has streamlined its business model, now showing results Key financial items EBITDA of NOKm 100 in 2Q 14, flat Q/Q and down from NOKm 115 in 2Q 13 LTM EBITDA of NOKm 422 Ten year class survey and docking of Boa Deep C (BDC) negatively impacting OCV in 2Q 14, start-up costs on Boa Bison Stable performance from SBL and Barges, Tugs improvement Y/Y Q2 14 Net Interest Bearing Debt increased to NOK 2.5 billion Key balance sheet items Fleet value of NOK 4.2 billion per H1 14 (incl Boa Bison, excl newbuilds) Approximately NOK 5 billion incl paid part of newbuilds Less than NOKbn 1 remaining capex on fully funded initiated newbuilding program Sound key credit matrices per 2Q 14 * Last twelve months Value adjusted equity 47% NIBD/EBITDA LTM 5.8x Debt ratios and cash position about to stabilize, before improving from mid 2015 based on current newbuilding program 9

10 Boa Offshore initiated newbuild program fully financed Vessel Design Yard Boa Jarl VS 491 Fosen/ Chinese hull Delivery /status H1 15 Debt financing Ownership Guarantor Total cost Other 60% guaranteed SMN/GIEK, Eksportkreditt funding NFDS Offshore 2 AS Boa Offshore & Det NOKm ~680 Nordenfjeldske Dampskibsselskab + interests 28k bhp, 600t winch, ROV hangar Boa Heron VS 495 Chinese H % bank, CDB & Sinosure Boa PSV AS Boa Offshore & Boa Holding USDm ~75 IMR/light construction Boa Pelican VS 495 Chinese H % bank, CDB & Sinosure Boa PSV AS Boa Offshore & Boa Holding USDm ~75 IMR/light construction Boa Barge 37 Boa Chinese H2 15 SMN Boa Barges AS Boa Offshore & Boa Holding NOKm ~ m semi submersible Initiated newbuild program fully financed Early July 2014 Boa took delivery of the AHTS Boa Bison. The vessel was delivered virtually on budget and slightly behind schedule (> 1 month) On April , Boa Offshore announced the shipbuilding contract of Boa Jarl, a sister vessel of Boa Bison The work will be performed at NorYards Fosen AS (former Bergen Group Fosen AS) whereas the hull is delivered from Nantong Mingde Heavy Industries in China The delivery from the yard is scheduled for H1 15 All equity needed for the project already injected, Boa with 78% ownership in NFDS Offshore 2 The two MPSV vessels have in place refund guarantees from the yard s banks. Vessels are scheduled to be delivered in H2 15 Remaining estimated capex e for newbuilding program (incl. Boa Jarl) of < NOKbn

11 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Market Outlook 11

12 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 EBITDA of NOKm 51 in 2Q 14, down from NOKm 66 Y/Y LTM EBITDA of NOKm 261 Boa Deep C ten year class survey impacting 2Q 14 numbers. Some upgrades also performed on the vessel NOKm 975 gross debt and NIBD of NOKm 846 per 2Q14 NIBD/EBITDA LTM of 3.2x per 2Q 14 Shipbrokers average valuation per 2Q 14 of NOKbn ~1.95 for both vessels*** Gross/net LTV per 1H 14 of 50/43% Relatively strong outlook for subsea construction vessels, despite oil companies announcing lower growth and moderation in investments Identified attractive possibilities for Deep C and Sub C from Boa Deep C engaged by BMSI through 2014 in a Bareboat structure, currently working for BP** * Last twelve months ** Source IHS/ODS Petrodata ** Source: According to average of two independent shipbroker valuations per

13 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 of NOKm 15 in 2Q 14, flat Y/Y Boa SBL key P&L LTM EBITDA of NOKm 59 Somewhat higher USD/NOK Y/Y Strong operational track record with a commercial on-hire of > 99% last three years Average shipbroker values** of NOKm 615 2Q 14 NIBD of NOKm 343 = 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 * Last twelve months ** Source: According to average of two independent shipbroker valuations per

14 Boa Barges world leading operator Offshore Vessels Barges Tugs and others Boa Offshore Group today operates 20 barges of different capabilities (incl. one newbuild) worldwide Also carrying out management of Myklebusthaug Dina Lifter/ Launcher EBITDA of NOKm 27 in 2Q 14, up from NOKm 11 in 1Q14 and NOKm 20 in 2Q 13 Boa Barges AS key P&L LTM EBITDA of NOKm 92 Built up an in-house engineering capacity that is unique in the industry Boa Offshore Group has since 1998 had continuous newbuilding program for barges at Chinese yards, and from 2002 Boa Offshore Group has utilized its own inhouse design on newbuilds Boa Offshore offers a unique combination of barges and tugs to provide total turn-key projects for transportation, launching or dry docking operations by barges First Jacket Launch performed in Mexico this year Engineering and project management performed from Trondheim and Houston Has been in involved in several major field developments world wide Tendering activity slowing into winter, but a number of leads for across several industries including; Oil & Gas, Power, Offshore Wind, Civil Construction 14

15 Tugs and others Offshore Vessels Barges Tugs and others 2Q 14 EBITDA of NOKm 7 in other segments including eliminations (negative). Tugs and others key P&L Boa Offshore (parent) strong results, Tug fleet improvement Y/Y, negative impact from Boa Bison start-up costs in 2Q 14 Boa currently operates 10 tugs and 9 smaller barges (in addition to the 11 larger barges in Boa Barges AS, incl BB 37) 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 in-house engineering group, project managers and execution staff with extensive track record. Capable of supporting vast offshore installation campaigns including: IMR, SURF, and mooring installations Four vessels, Olympic Boa, Boa Deep C, Polar Queen and Topaz Captain currently chartered to support BMSI s strategy High activity in BMSI in 2Q 14 AHTS Boa Bison expected to have a positive impact on EBITDA in 2H 14 Market outlook for all of the other segment is stable to positive 15

16 Contents 1 Boa Offshore summary 2 Boa Offshore update and overview 3 Boa Offshore Financials 4 Boa Offshore Business segments 5 Market Outlook 16

17 Industry Book to Bill as leading indicator for Barges, OCV, and BMSI Industry Book to Bill Subsea tree installations World Wide p.a. Offshore construction backlogs currently at all-time high (Big 3: Saipem, Subsea7, Technip) 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 and offshore construction activity in years to come, and as a result, higher demand for construction vessels and also barges Subsea tree awards and estimated subsea tree installations key indicator for vessel activity Despite oil companies moderation in growth plans, the outlook for the subsea segment remains relatively robust Number of tree installations likely to increase from an average of < 300 p.a. in up to within 2-4 years (all water depths) Even stronger growth in deepwater With the ageing infrastructure and accumulated base growing the need for Inspection, Maintenance & Repair (IMR) services increases Source: HIS/ODS-Petrodata, Pareto Research, company reports, Boa Offshore 17

18 North Sea AHTS spot Market North Sea working rigs vs total rigs Current Looking back YTD: Boa Offshore has one large AHTS 27,000 bhp working through NFDS delivered July 2014, and has a sister vessel under construction for delivery 1H 15 Although the market has developed below expectations on the back of an influx of vessels earlier this year, the average dayrate YTD for AHTS > 20,000 bhp has been close to NOK 400,000*, similar level as last year Furthermore, the demand side has been held back by rigs in yard, calm weather and no vessels needed for FPSO installations North Sea market AHTS > 15,000 Fleet Current Going forward: New rigs are entering North Sea for fixed contracts and rigs are returning from yard stays Risk to some older rigs leaving North Sea 1-2 FPSOs scheduled for installation in 2H14 and 3-4 p.a. for Limited number of large AHTS newbuilds to enter market next 2 years, only a handful from Norwegian yards Somewhat challenging outlook for coming winter season when vessels arrives back from work outside the North Sea Source: IHS/ODS Petrodata, Boa Offshore * RS Platou Weekly North Sea spot market report 18

19