Investor meetings Friday 6 January 2017

Transcription

1 Investor meetings Friday 6 January 2017

2 Disclaimer This Presentation is intended for general guidance and information purposes only. This Presentation is under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. While all reasonable care has been taken to ensure that the material is true and not misleading, no guarantee about its accuracy or completeness is made. This Presentation does not regard any specific investment objectives, financial situation or the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies, and should understand that statements regarding future prospects may not be realised. Investors are also cautioned that any forwardlooking statements are not guarantees of future performance and are subject to risks and uncertainties and the actual results, performance or achievements may differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Factors that could cause or contribute to such differences include, but are not limited to, those described in the presentation. Investors should also understand that past performance is not necessarily a guide to future performance. All investments mentioned in this report have attached risk of considerable losses. The Forland companies do not accept any form of liability, neither legally nor financially, for loss (directly or indirectly) caused by the understanding and / or use of this Presentation or its content. 2

3 Forland s vision Forland Shipping shall offer profitable, innovative and flexible solutions for the offshore market without any adverse impact on people or the environment. 3

4 Forland Group in short The Forland Group dates back to the early 1950 s, but was established as a shipping company in Today the Forland Group consists of several Norwegian domiciled companies and is 100% owned and controlled by Mr. Frode Bjørn Forland The Group currently owns and operates two vessels; Fugro Saltire and Lewek Inspector Fugro Saltire was built at Bergen Group BMV in Bergen in Norway and delivered in 2008, whereas the Lewek Inspector was delivered from the Norwegian shipyard, Havyard, in late 2013 The Group carries out operations globally, however it is currently operating in the UK (Fugro Saltire) and West Africa (Lewek Inspector) Total number of employees is 11, all employed in the management company, Forland Shipping AS The marine crew is hired in from OSM Crew Management in Arendal Management company Frode Bjørn AS E Forland AS Forland Subsea AS Forland Shipping AS 4

5 Group structure Ownership is 100% unless otherwise noted Mr. Frode Bjørn Forland Fugro Subsea Services Ltd. Frode Bjørn AS Holding company EMAS-AMC AS TC TC Forland Subsea II AS TC contract with Fugro E Forland AS Shipowner Fugro Saltire Forland Shipping AS Management company Seisranger AS Dormant company Forland Subsea AS TC contract with EMAS BBCP BBCP Forland Subsea III AS Shipowner Lewek Inspector Forland plans to establish this company in

6 End client experience Forland has over the years been involved with several oil majors as end clients: 6

7 Global experience The Forland Group has vast operating experience from different regions of the world North Sea Gulf of Mexico Mediterranean/Black Sea Ivory cost South East Asia Brazil Gulf of Guinea Australia Falklands 7

8 The Fleet (Fugro Saltire) Fugro Saltire TC contract with Fugro Subsea Services Ltd until July x 5 years time options from July 2018 Have mainly been operating in the North Sea the last couple of years Fugro has found a niche segment for the vessel to carry out trenching operations within renewables Currently in the UK. The vessel will participate in phase two of the Rampion windfarm cable installation from March 2017 onwards Norwegian flag with primarily Norwegian marine crew onboard Main technical data Built: 2008 by Bergen Group BMV, Bergen, Norway LOA: 111 m, can be extended to 130 m Beam: 24 m Depth: 9.6 m GRT: 9,600 tons Net: 2,800 tons Max speed: 16 kts Main deck: 1,000 m 2 Crane: 150 tons Hydramarine Accommodation: 105 pax Facilities: Cinema, fitness room DP-system: DP 2 Flag: NOR 8

9 The Fleet (Lewek Inspector) Lewek Inspector TC contract with EMAS-AMC AS until November x 1 year time options thereafter Call option for 49 % of the shares in Forland Subsea AS for the Charterer in 2018, based on market value. If the call option is excercised, the TC contract will be prolonged by 5 years firm Have been operating in Brazil, West Africa and the North Sea since its delivery Currently in West Africa to participate in different projects Maltese flag. Norwegian, Polish and Filipino crew Main technical data Built: 2013 at Havyard, Leirvik, Norway LOA: 110 m Beam: 22 m Depth: 7.5 m GRT: 9,700 tons Net: 4,750 tons Max speed: 14.5 kts Main deck: 1,002 m2 Crane: 150 tons National Oilwell Accommodation: 106 pax Facilities: Fitness room DP-system: Kongsberg DP2 Flag: Malta 9

10 Market development Our impression is that there have been more projects to tender on for the Charterers in 2H 2016 compared to the same period in 2015 Charterers are still experiencing depressed rates in the market Activity in the North Sea still seems depressed, however the activity in West Africa seems to be higher for the time being Forland is, among other factors, cooperating with Charterers on cost reducing initiatives in order to mitigate the adverse market conditions 10

11 Counterparty risk Fugro Subsea Services Ltd. s (previously: Fugro-Rovtech Ltd.) liabilities under the TC with E Forland AS were guaranteed by the parent company, Fugro N.V, upon commencement of the charter party. October 2016: Fugro N.V. successfully places EUR 150 million subordinated convertible bonds with an increase option of up to EUR 40 million (coupon of 4% per annum) Highlights Q3 2016, Fugro Group: Continuous adjusting of cost base and capacity to market reality Realizing positive cash flow and reduced net debt Mid-single EBIT margin achieved Year-on-year revenue decline of approx. 20 % Fleet reduced by 5 vessels compared to YE month backlog reduced from EUR 1,342 million as of 3Q15 to EUR 1,055 million as of 3Q16 Net debt/ebitda reduced from 2.0x as of 3Q15 to 1.8x as of 3Q16 11

12 Counterparty risk cont d Highlights Q3 2016: Fugro is working towards closing of the divestment of its Asia Pacific subsea construction and installation business in the fourth quarter. The majority of the subsea activities in other regions concern inspection, repair and maintenance and drill support. These are an important part of Fugro s marine asset integrity portfolio and will therefore be integrated in the Asset Integrity business line in the Marine division Outlook for 2016 reconfirmed: positive cash flow from operating activities after investments, further reduction of cost base and negative low single digit EBIT margin (excluding exceptional items) although somewhat better than previously expected Revenue for the quarter for the Subsea Services division decreased by 10.7% at constant currencies to EUR 91.7 million. The decline is mainly caused by the deterioration of the North Sea and Asia Pacific construction support activities During the quarter the Rampion windfarm cable installation work started in the English Channel, keeping vessels Fugro Symphony, Fugro Saltire and a trenching system busy. Phase one will be completed in November, phase two starts again in March

13 Counterparty risk cont d 40% 35% 25% 100% There is a parent company guarantee from Ezra Holdings Ltd. in connection with the T/C contract with EMAS- AMC 13

14 Counterparty risk cont d As of YE 2016 EMAS-AMC has outstanding, overdue charter hire to Forland for the Lewek Inspector for October 2016 and November 2016 EMAS-AMC informed Forland in a meeting 15 December 2016 that they are currently in financial distress Ezra Holdings Ltd, which has issued a parent company guarantee in relation to the TC contract for the Lewek Inspector, announced as follows 20 December 2016: The Board of Directors (the Board ) of Ezra Holdings Limited (the Company, together with its subsidiaries, the Group ) wishes to announce that its associated company, EMAS Chiyoda Subsea Limited ( ECS, together with its subsidiaries, the ECS Group ), has initiated discussions with various parties concerning the ECS Group s financial obligations. Some of these financial obligations are guaranteed by the Company. ECS is a joint venture company which is owned 40% by the Company, 35% by Chiyoda Corporation and 25% by Nippon Yusen Kabushiki Kaisha. 14

15 Strategy For the past few years, the Forland Group has focused on fleet rejuvenation and increasing its exposure towards the subsea market, with divestments of non-core seismic assets and through the 2012 order of the subsea vessel, Lewek Inspector, from Havyard Shipyard In the short to medium term, the focus will be on extending/renewing existing TC contracts for the vessels or to obtain new TC contracts when the existing ones expire in 2018 Forland is currently contemplating further cost reducing initiatives, both onshore and offshore, in order to increase competitiveness in the difficult market prevailing In the long run, Forland intends to grow up to 3-5 vessels in operation in the Group Same type of vessels as the Group owns and operates as of today Timing depends on when the current market conditions will improve Investment in newbuilds to be based on speculation or long-term contract The Group has a strong QHSE commitment both onshore and offshore which is considered to be the backbone of the Group s growth strategy within the subsea market 15

16 Financial performance for the Group 16

17 Financial performance for the Group 17

18 Financial performance for E Forland AS 18

19 Financial performance for E Forland AS 19

20 Internal bareboat charterer The TC contract for the Fugro Saltire was novated to Forland Subsea II AS (IBC) with effect from 01 June 2016, and the company entered into an internal bareboat charter with E Forland AS for the chartering of the vessel from 01 June 2016 onwards. 20

21 QHSE FOCUS Health and Safety Forland Shipping focuses strongly on the health and safety of personnel and all the company s operations are quality-assured. In accordance with the guidelines issued by the Oil Companies International Marine Forum (OCIMF), the company focuses on continuous improvement and optimization. Priority is given to good communication between the offshore and onshore organisations, and QHSE plays a central role in the company s day-to-day operations The company s management systems are certified by Det Norske Veritas (DNV) in accordance with the International Safety Management (ISM) Code and the guidelines issued by the Norwegian Maritime Authority (NMA) 21

22 Environment Forland Shipping supports the Norwegian Shipowners Association s vision of zero emissions to sea and air. The company s goal is to continuously improve through learning and business opportunities Forland Shipping AS respects and takes responsibility for our common environment, but acknowledges the environmental impact of the company's activities Forland Shipping will not only comply with all regulatory environmental requirements, but do better than that in specific environmental areas 22

23 Environmental objectives Forland Shipping shall monitor and measure, on a regular basis, the key characteristics of its operations that can have a significant environmental impact: Exhaust gas emissions Garbage / waste Reporting and analyses of relevant data to improve our carbon footprint shall be done by use of the UniSea Emission and the ISO modules. Scope and application Environmental factors related to fuel consumption, fuel by activity, and NOx, SOx, CO2 emissions and waste are controlled by use of UniSea, our QA system 23

24 Board of Directors Forland Group Frode Bjørn Forland, Chairman of the Board Frode Bjørn Forland (born 1958) is the son of Mikkel and Ellen Forland, and after his mother passed away in January 2010, the sole owner of the Forland Group. He has many years of experience working actively in the Ship Management Department. Frode has a degree as Master of Technical Engineering and Control Systems. Nils Olav Troland, Board Member Nils Olav Troland (born 1953), Master Mariner, is currently working as Operation Manager at DOF Management and has vast experience from the subsea shipping business in various positions, both onshore and offshore. Leif Jarle Aase, Board Member Leif Jarle Aase ( born 1950) is currently working as a consultant connected to RSM Hasner, Kjelstrup & Wiggen AS. Leif has previously been partner in Deloitte for 25 years, and partner in RevisorGruppen Hordaland DA for 7 years. Leif has experience from audit, tax, management consulting and financial transactions. 24

25 Management Forland Shipping Frode Bjørn Forland, Chief Executive Officer Frode Bjørn Forland (born 1958) is the son of Mikkel and Ellen Forland, and after his mother passed away in January 2010, the sole owner of the Forland Group. He has many years of experience working actively in the Ship Management Department. Frode possess a degree as Master of Technical Engineering and Control Systems. Bjørn Kristian Jæger, Managing Director Educated at the Norwegian Naval Academy and has an M.Sc. in engineering from NTNU, with extensive service experience in the Navy's submarine weapons, both as chief engineer, maintenance superintendent and project manager. After service in the Navy, he held challenging management positions both nationally and internationally in offshore, shipbuilding and other maritime business. He joined Forland Shipping in August Andreas Høvik, Chief Financial Officer Master s degree ( Siviløkonom ) from the Norwegian School of Economics and Business Administration (NHH). Andreas Høvik has experience from different audit firms and came to Forland from a position as Senior Analyst at Ernst & Young (EY). At Ernst & Young Andreas performed audit of large Norwegian companies, financial analysis, due diligence and merger & acqusitions. He joined Forland Shipping in April Bjørn Gunnar Garnes, QHSE Manager Holding a Maritime Academy exam in Maritime Engineering and Administration from Trondheim Maritime School. He is also educated as a teacher from the University of Bergen and Certified Chief Engineer with M1 license. Bjørn Gunnar Garnes has had the main responsibility for quality systems since 1998, been a teacher at Bergen Maritime School and sailed at sea as chief engineer. He has previously been working as QA Manager at Mowinckels Rederi and joined Forland Shipping in April Kurt Andreassen, Vessel Support Manager Kurt has long maritime experience. After graduating from Arendal Maritime Academy, he sailed in foreign trade as an engineer, and subsequently as a chief engineer, with the shipping company Uglands Rederi in Grimstad, from which there was only a short step to Ugland Offshore in He has been working in the offshore industry since then, most recently in Subsea 7 from 2000 and until he started working at Forland in

26 Forland Shipping AS Torpevikvegen 4-6 NO-5232 Paradis 26