Höegh LNG - the FSRU provider. 3Q 2018 Presentation of financial results 29 November 2018

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1 Höegh LNG - the FSRU provider 3Q 2018 Presentation of financial results 29 November

2 Forward looking statements This presentation contains forward-looking statements which reflects management s current expectations, estimates and projections about Höegh LNG s operations. All statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are forward-looking statements. Words such as may, could, should, would, expect, plan, anticipate, intend, forecast, believe, estimate, predict, propose, potential, continue or the negative of these terms and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Höegh LNG undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changes in LNG transportation and regasification market trends; changes in the supply and demand for LNG; changes in trading patterns; changes in applicable maintenance and regulatory standards; political events affecting production and consumption of LNG and Höegh LNG s ability to operate and control its vessels; change in the financial stability of clients of the Company; Höegh LNG s ability to win upcoming tenders and securing employment for the FSRUs on order; changes in Höegh LNG s ability to convert LNG carriers to FSRUs including the cost and time of completing such conversions; changes in Höegh LNG s ability to complete and deliver projects awarded; changes to the Company s cost base; changes in the availability of vessels to purchase; failure by yards to comply with delivery schedules; changes to vessels useful lives; changes in the ability of Höegh LNG to obtain additional financing, including the impact from changes in financial markets; changes in the ability to achieve commercial success for the projects being developed by the Company; changes in applicable regulations and laws; and unpredictable or unknown factors herein also could have material adverse effects on forward-looking statements. 2

3 Agenda Highlights Operational update Market update Financials Summary 3

4 Highlights for the third quarter of 2018 and subsequent events Highlights EBITDA of USD 47.9 million Net profit of USD 6.0 million, including impairment of USD 9.0 million Dividend of USD per share paid in the third quarter of 2018 Secured commitments for the debt financing for Höegh Gannet (FSRU #9) and FSRU #10 Subsequent events Dividend of USD per share declared in the fourth quarter of 2018 Investment in Avenir LNG to develop small-scale LNG market position Höegh Esperanza commencing FSRU operations in Tianjin, China Secured commitments for refinancing of Höegh Gallant and Höegh Grace at improved terms 4

5 Agenda Highlights Operational update Market update Financials Summary 5

6 Commercial development FSRU market Active market with 5 FSRU contract awards so far this year FSRU activity concentrated in Asian and Middle East markets Tight LNGC markets positively impacting competitive situation for FSRUs Commercial development Achieved exclusivity on 2 FSRU projects, and in final selection round for another 2 Höegh Esperanza commencing regasification operations in Tianjin, China Highly complementary investment in Avenir LNG for small-scale LNG position Outlook Solid underlying demand for FSRUs amid growing supply of LNG Höegh LNG in strong competitive position with newbuilding FSRU fleet to secure attractive long-term FSRU contracts 6

7 First mover advantage in the Chinese market under a 3+1 year contract with CNOOC Höegh Esperanza, Tianjin, China Höegh LNG has in place a 3+1 year FSRU/LNGC contract with CNOOC for the FSRU Höegh Esperanza Serving as a regasification terminal in Tianjin for a minimum period each year Balance of the year in LNGC and/or FSRU mode FSRUs filling acute import infrastructure shortage amid rapid LNG demand growth Höegh LNG in a favourable position by operating the sole FSRU in the Chinese market 7

8 USD per MMBtu A new market for FSRU growth: Investment in small-scale and Avenir LNG Illustrative economics, small scale LNG Δ USD LNG price 1 FOB Δ USD Handling2,3Delivered Handling3 Delivered bunkering powerplant Δ USD Handling Delivered truck Cost of competing oil products 12 Rotterdam 380 CST 17.3 Rotterdam MGO Strong synergies since small-scale LNG projects depend on storage and reloading capabilities provided by FSRUs Avenir LNG: Supplying LNG to new markets using small-scale LNG carriers and terminals Main driver: Oil-to-gas switch Aggregating demand across regions Capturing margins across the LNG value chain Small-scale LNG to stimulate FSRU demand by expanding the number of viable markets for fullscale newbuilding FSRUs Avenir LNG listed at N-OTC in Oslo on 15 November 2018, Höegh LNG with 22.5% stake 8 1) Henry Hub spot price of USD 2.75 per MMBtu + 15% + USD per MMBtu in tolling fee 2) Shipping, FSU and small-scale expenses; assuming large LNG carrier to Europe with 10% economics on charter, fully utilised FSU with 10% to FSU owner 3) Small-scale cash breakeven including operating costs and 10% economics on capex

9 Höegh LNG s FSRUs already providing multiple small-scale LNG services Small-scale LNG distribution LNG truck distribution Pipe-to-shore regasified LNG from FSRU Lithuania China Base service LNG bunkering Future Future ISO container distribution 9

10 Modern fleet marketed in growing long-term FSRU market Built EBITDA Charterer USDm/yr Höegh LNG Holdings Arctic Princess* ** Equinor Arctic Lady* ** Total Independence KN Höegh Giant 2017 Naturgy / LT contract Höegh Esperanza 2018 CNOOC / LT contract Höegh Gannet 2018 Naturgy / LT contract FSRU# Spot / LT contract Höegh LNG Partners Neptune ** Total GDF Suez Cape Ann ** Total PGN FSRU Lampung PGN Höegh Gallant Egas / Gunvor Höegh Grace SPEC Delivery December 2018 Delivery Q Long-term business under development FSRU and/or LNGC Long-term contract Extension option Under construction intermediate charter 10 * LNG carriers ** 100% basis, units are jointly owned

11 Agenda Highlights Operational update Market update Financials Summary 11

12 million tonnes Solid momentum in LNG trade, driven most prominently by growing Asian import demand LNG trade by month, global Total trade of 236 million tonnes in 9M 2018, up 7.1% from 9M Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Combination of new supply of LNG and robust demand in Asia driving LNG trade growth Full-year trade forecasted to be around 320 million tonnes, up 7.7% from 2017 Source: Waterborne LNG / IHS Markit 12

13 million tonnes per month Additional regasification capacity required to meet growing Chinese LNG import demand 6 5 Chinese LNG imports and regasification capacity Total imports Total nameplate capacity Imports from time-to-time exceed available regasification capacity, particularly in northern China 4 3 During those periods, LNG is loaded as liquid onto trucks and distributed to the market One of Höegh LNG s FSRUs would add around USD 0.5 million tonnes of monthly regasification capacity November 2018e Source: Waterborne LNG / IHS Markit 13

14 Units 29 FSRUs currently on the water 13 new units scheduled to deliver through 2022 FSRU fleet and orderbook 1 by owner Of 13 newbuilding orders, 5 are being built by developers for their own specific projects, and thus are not offered in the market Botas Dynagas Java-1 Dynagas SWAN Maran Kol / Kal Exmar Gazprom MOL OLT Höegh LNG Excelerate Golar LNG BW Gas Other Single-purpose Existing Newbuilding LNGC-to-FSRU conversion Of the remaining 8 orders, 6 appear uncommitted with delivery through Orderbook defined as confirmed orders, excluding LOIs, options and conversions not firmed up Source: Höegh LNG 14

15 Large number of market opportunities backed by diverse drivers of demand Enabler Increasing supply of attractively priced LNG Demand drivers Security of supply Back-up for hydro Seasonal demand Transportation Balance of trade New gas-fired generation Replacement for coal and oil Region Existing In development Proposed N America S America Europe MENA Sub-Sahara Africa Existing and potential FSRU contracts 4 + South Asia Asia/Oceania Sum Source: IHS Markit 15

16 '000 USD per day Robust LNG carrier markets have several positive implications for the FSRU market LNGC charter rates Steam spot DFDE spot Long-term Fall-back option well in the money FSRUs with full trading capabilities earn the same rates as purpose-built LNGCs Höegh LNG has fixed its non- FSRU trading capacity at longterm rate levels Booming spot LNGC rates have: Reduced competition in the FSRU market as LNGC owners take advantage of strong rates Put effective stop to speculative LNGC-to-FSRU conversions Data source: IHS Markit 16

17 Agenda Highlights Operational update Market update Financials Summary 17

18 USD million Financial highlights for the quarter ended 30 September 2018 USD million 3Q Q 2018 Total incom e Charterhire and other expenses Operating expenses Administrative and BD expenses EBITDA Depreciation Impairment EBIT Net interest expense Net other financials Profit before taxes Corporate income tax Profit for the period Net profit variation, Q2 to Q Q EBITDA ex. Reimbursement Net finance Net other Impairment Q reimb

19 Balance sheet USD million 30-Sep Jun Dec-17 Investments in FSRUs 1,658 1,671 1,386 Investments in new buildings Other Long-term restricted cash Marketable securities Cash and short-term restricted cash Total assets 2,139 2,147 1,959 Equity attributable to the parent Non-controlling interests Total equity Interest bearing debt 1,297 1,317 1,156 Other Total equity and liabilities 2,139 2,147 1,959 NIBD 1,082 1, Adjusted equity Adjusted equity ratio 38% 37% 39% Redemption of marketable securities portfolio Interest bearing debt reduced due to scheduled amortization 38% adjusted equity ratio 19

20 Höegh LNG is fully financed at attractive terms Höegh Esperanza Höegh Gannet FSRU #10 Delivery April 2018 December 2018 Q Structure Leverage (% of delivered cost) Amortisation profile Export credit and commercial debt Export credit and commercial debt Sale and leaseback 65-75% 65% 70-80% years 16 years 20 years With commitments received for the financing of FSRU #10, Höegh LNG is fully equity and debt financed Diverse lending group consisting of leading international banks and credit institutions Tenor 12 / 5 years 12 / 5 years 12 years Fixed interest rate ~4% ~5% ~6% 1 20 (1) Not yet swapped

21 USD million Refinancing of Höegh Grace and Höegh Gallant well ahead of maturity and at improved terms 450 Debt repayment schedule Refinancing of Höegh Gallant and Höegh Grace totalling USD 385 million 400 Refinancing of outstanding amount of USD 320 million 350 HLNG03 Availability of USD 65 million in RCF HLNG02 Independence PGN FSRU Lampung Höegh Giant Höegh Esperanza Höegh Gannet Höegh Gallant Höegh Grace Tenor stretched from 5 to 7 years, lower interest rate margin Fixed interest expected to be approximately 5.3% 50 0 Q Amortisation Amortisation of refinanced debt Balloons Bonds Refinancing well ahead of Q / Q maturities 21 1) All balloons assumed refinanced in full, extending current amortisation profiles

22 USD million Outstanding capital expenditures fully matched by available liquidity Available liquidity at 30 Sept USDm Capital expenditures and funding Cash, net of HMLP 168 Revolving credit facility Debt for Höegh Gannet 177 Debt for FSRU # Available liquidity 562 Increased leverage on Höegh Giant / Höegh Esperanza / FSRU #10 Targeted available liquidity Outstanding capital expenditures, 30 September ~ Q Höegh Gannet debt FSRU #10 debt Equity 22

23 Agenda Highlights Operational update Market update Financials Summary 23

24 Summary Record quarterly performance with EBITDA of 47.9 million and net profit of 6.0 million Busy market for FSRUs, in final selection round / secured exclusivity for four FSRU projects Positive impact from strong LNGC markets Solid market backdrop with expanding LNG demand, especially in Asia Newbuilding programme fully financed and successful refinancing of Höegh Grace / Höegh Gallant 24

25 Q&A session 29 November :00 CET Call-in details: Norway United Kingdom +44 (0) United States Participant passcode: Alternatively, click here to be called directly and placed into the event Webcast: 25