Höegh LNG - the FSRU provider Company presentation March 2018 1
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
Agenda Company overview Market update Financials Summary 3
Höegh LNG at a glance Sector: Maritime energy infrastructure Floating Storage & Regasification Units (FSRUs) Largest, most modern and most efficient FSRU fleet in the market 7 FSRUs in operation 3 FSRUs under construction 2 LNGCs in operation Market cap / EV*: USD 560m / USD 1.5bn Assets / equity ratio*: USD 2.0bn / 39.2% 10 years Avg. remaining contract length USD 3.6 bn Revenue backlog Revenues / EBITDA*: USD 279m / USD 150m Employees: 125 onshore / 525 offshore HLNG / HLNG02 / HLNG03 HMLP / HMLP-A * 2017 4
Regasification is the critical link in the global natural gas supply chain The natural gas value chain Höegh LNG focus Natural Gas Liquefied Natural Gas Natural Gas Production Liquefaction Transportation Regasification/ infrastructure Consumption Höegh LNG business model Construction, ownership and operation of FSRUs on long-term contracts
Consistently solid operational performance across the fleet Technical availability Arctic Lady 99.87% 99.70% 99.95% 99.94% 99.79% >99.50 % Arctic Princess Independence Neptune GDF Suez Cape Ann Höegh Grace Höegh Gallant 2013 2014 2015 2016 2017 Target FSRU NB PGN FSRU Lampung Lost time injury frequency 1 Höegh Giant 1.07 <1.00 FSRU NB 0.44 0.73 0.40 FSRU LNG carrier FSRU intermediate trading FSRU contract with future start-up 0.00 2013 2014 2015 2016 2017 Target 1 Per million work hours 6
Fleet allocation subject to optimisation pending contract awards Built EBITDA Charterer Höegh LNG Holdings Arctic Princess* 2006 19** Statoil Arctic Lady* 2006 19** Total Independence 2014 47 KN Höegh Giant 2017 GNF FSRU#8 2018 Tendering/Penco FSRU#9 2018 Tendering FSRU#10 2019 Tendering Höegh LNG Partners Neptune 2009 33** Engie GDF Suez Cape Ann 2010 33** Engie PGN FSRU Lampung 2014 40 PGN Höegh Gallant 2014 38 Egas Höegh Grace 2016 42 SPEC USDm/yr 2017 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Long-term contract LNGC interim trading FSRU/LNGC charter Extension option Under construction 7 * LNG carriers ** 100% basis, units are jointly owned
Increasing business development activity In discussions for interim employment for FSRU #8 from mid-2018 until start-up under the contract with GNL Penco in Chile LNG export growth exceeding expectations Main commercial focus on securing long-term employment for FSRU #9 and #10, which deliver in December 2018 and May 2019 respectively Currently involved in several advanced tendering processes with decisions expected in 2018 Business development activity continues to increase Coinciding with LNG trade exceeding expectations New tenders being launched Ongoing tender processes picking up momentum Source: Shell LNG outlook 2018 8
Agenda Company overview Market update Financials Summary 9
mtpa mtpa LNG trade up 11% in 2017 350 LNG trade by exporter 350 LNG trade by importer 300 300 250 200 Australia and US volumes 250 200 150 100 150 100 Chinese imports exceeding South korea 50 50 0 2010 2011 2012 2013 2014 2015 2016 2017 0 2010 2011 2012 2013 2014 2015 2016 2017 Qatar MEG ex Qatar Africa Asia Australia USA South America Europe Japan+Korea China RoA MEG Africa Europe North America South America Source: Waterborne LNG, IHS Markit 10
Continued expansion of LNG supply to support FSRU demand Australia 13 mtpa USA 12 mtpa Russia 11 mtpa Cameroon 2 mtpa Malaysia 1 mtpa USA 37 mtpa Australia 8 mtpa Russia 6 mtpa Indonesia 4 mtpa Mozambique 3 mtpa Malaysia 2 mtpa Source: IHS Markit, GIIGNL, Höegh LNG 11
# of projects A significant number of markets contemplating importing LNG through FSRUs Floating regasification projects by region 25 20 15 10 5 0 Source: IHS Markit 18 South America 6 North America 18 Europe 6 Sub-Saharan Africa 13 19 18 Middle East South Asia Southeast Asia Existing Under construction Under development Proposed 3 Northeast Asia 2018 IHS Markit Projects in the public domain* Australia Brazil Colombia Cote d Ivoire Croatia Cyprus Hong Kong Lebanon Mexico Pakistan Turkey the UAE the UK 12 * Projects that have been mentioned in media by project developers, excluding officially awarded projects Source: IHS Markit, Höegh LNG
Units FSRU supply insufficient to meet demand from projects under development FSRU fleet and orderbook 1 by owner and employment 12 10 8 6 4 2 1 1 1 2 8 7 3 4 Dynagas Dynagas Maran Java-1 SWAN Kolin Kalyon Gazprom 6 uncommitted FSRUs under construction, with delivery 2018 (1), 2019 (2) and 2021 (3) In addition, long-lead items for LNGC to FSRU conversions have been reported ordered 2 0 5 1 3 2 Höegh LNG Excelerate Golar LNG BW Gas Other Exmar MOL OLT Committed Available Committed NB Uncommitted NB 1 Orderbook defined as firm orders, excluding LOIs, options and conversions not firmed up Source: Höegh LNG 13
Increased momentum in LNGC markets rates at four-year high levels TFDE headline rate assessment: Spot vs. 1-year TC LNGC spot rates reached USD 80,000 per day towards the end of 2017, the best in four years 1-yr TC rates USD ~55,000 per day; longer-term TC rates in the low USD 60,000s All Höegh LNG FSRUs have full trading capabilities as LNGCs Fuel consumption similar to LNGCs Operating expenses similar to LNGCs Source: Clarkson Platou 14
Agenda Company overview Market update Financials Summary 15
USD million USD million USD million Solid earnings development 2017 marked new record levels Total income EBITDA Net profit 300 250 219 233 279 160 140 120 111 149 60 40 20 14 41 200 150 100 162 100 80 60 40 90 0-20 -40-27 20-60 50 0-80 0 2014 2015 2016 2017-20 -4 2014 2015 2016 2017-100 -93 2014 2015 2016 2017 * Adjusted for hedging 16
USD million Strong financial position USD million 4Q 2017 3Q 2017 4Q 2016 Investments in FSRUs 1,386 1,397 1,140 Investments in new buildings 233 202 130 Other 92 94 103 Long-term restrcited cash 14 14 19 Marketable securities 74 24 136 Cash and short-term restricted cash 160 261 186 Total assets 1,959 1,992 1,713 Equity attributable to the parent 479 452 446 Non-controlling interests 226 124 150 Total equity 705 576 596 Interest bearing debt 1,156 1,261 936 Other 98 156 182 900 800 700 600 500 400 300 200 Equity* and equity ratio* 677 598 567 763 50% 45% 40% 35% 30% 25% 20% 15% 10% Total equity and liabilities 1,959 1,992 1,713 100 5% NIBD 908 962 585 Adjusted equity 763 649 677 Adjusted equity ratio 39.2% 32.7% 39.7% 0 2014 2015 2016 2017 0% * Adjusted for hedging reserves 17
Equity Debt Diversified capital structure with multiple financing sources Capital structure HLNG HMLP Outstanding / Mcap Comments Alternatives Commercial bank debt USD 606m 20 banks Export Credit Agencies (ECA) USD 254m 3 ECAs Senior unsecured bonds USD 313m 2 bonds Term Loan B Senior secured bonds Project bonds Sale and lease back Oslo Børs listing USD 570m NYSE listing (common units) USD 310m Non-HLNG units Equity partners Preference shares USD 118m Sum USD 2,171m 18
USD million Laddered out debt repayment profile 500 450 400 Debt repayment schedule Amortisation includes debt on FSRUs #8-10, assuming that financing for FSRUs #9-10 are structured similarly to FSRU #8 350 300 250 200 150 100 50 0 HLNG03 HLNG02 Höegh Gallant Höegh Grace Höegh Giant Independence Lampung 2018 2019 2020 2021 2022 Amortisation Amortisation refinanced debt Balloons Bonds Amortisation of refinanced debt assumes similar amortisation profile as the current facilities, and that balloons are refinanced in full Commercial debt tranches on Independence, Gallant, Grace and Lampung mature ahead of ECA tranches with 12 year tenors 19
USD million Capital expenditures well covered by existing liquidity and planned financing Available liquidity USDm Cash, net of HMLP 137 Marketable securities 74 Revolving credit facility 52 Debt for FSRU #8 200 Available liquidity at 31 December 2017 463 65-75% funding of FSRUs #9 and #10 340 390 Increased leverage on Höegh Giant / FSRU #8 59 Planned financing 862-912 500 450 400 350 300 250 200 150 100 50 Capital expenditures Outstanding capital expenditures ~630 0 2018 2019 2020 20
USD million Höegh LNG Partners an attractive source of growth capital 180 HMLP proceeds to Höegh LNG Latest transaction: 49% of Höegh Grace 160 Net proceeds of USD 86.7 million 140 10-20 year contract with SPEC in Colombia 120 Current yield of 10% 100 80 60 40 20 IPO 1 Höegh Gallant 1 51% of Höegh Grace 49% of Höegh Grace in Q4 2017 Gallant seller s credit Recently launched an ATM equity raising programme 0 2014 2015 2016 2017 Drop-down proceeds MLP distribution IDR 1 Pre-funding of Höegh Gallant acquisition in IPO proceeds in 2014 21
Agenda Company overview Market update Financials Summary 22
Summary Record EBITDA of 149 million and net profit of USD 41 million in 2017 Consistently solid operational performance measures across the global fleet Primary focus on securing firm employment for FSRUs under construction Increasing tendering activity on the back of growing LNG demand Strong financial platform with diversified financing sources 23