Photo: Jørgen Grindevoll, Chief Officer, Höegh LNG Fleet Management Höegh LNG - the FSRU provider 2Q 2018 Presentation of financial results 23 August 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 Highlights Operational update Market update Financials Summary 3
Highlights for the second quarter of 2018 and subsequent events Highlights EBITDA of USD 40.3 million Net profit of USD 7.8 million Dividend of USD 0.025 per share paid in the second quarter of 2018 Höegh Esperanza commenced three-year FSRU/LNGC contract with CNOOC Subsequent events Dividend of USD 0.025 per share declared in the third quarter of 2018 Secured commitments for debt financing of remaining capex for FSRU #9 4
Agenda Highlights Operational update Market update Financials Summary 5
Consistent operational excellence Technical availability 99.87% 99.70% 99.95% 99.94% 99.79% 100.00% >99.50% 1.07 Lost time injury frequency 1 0.73 <1.00 0.44 0.38 0.00 0.00 2013 2014 2015 2016 2017 2018 YTD Target 2013 2014 2015 2016 2017 2018 YTD Target Full technical availability Intense focus on implementing best practices across the fleet Highly qualified teams onboard and onshore Robust technical designs of vessels and equipment Spare part and maintenance systems well adapted for criticality of operations. Zero lost-time incidents last 12 months Solid HSEQ results obtained by: Competent, committed, cooperative and safety aware teams Clear policy and communication: Safety First! All incidents and near-misses investigated and followed up State-of-the-art risk management systems 1 Per million work hours 6
Commercial focus set on securing long-term FSRU employment Built EBITDA Charterer USDm/yr Höegh LNG Holdings Arctic Princess* 2006 19** Statoil 2018 2020 2022 2024 2026 2028 2030 2031 2032 2033 2034 2035 2036 2037 2038 Arctic Lady* 2006 19** Total Independence 2014 47 KN Höegh Giant 2017 Naturgy / Tendering Höegh Esperanza 2018 CNOOC / Tendering FSRU#9 2018 Tendering FSRU#10 2019 Tendering Delivery November 2018 Delivery May 2019 Höegh LNG Partners Neptune 2009 33** Total GDF Suez Cape Ann 2010 33** Total PGN FSRU Lampung 2014 40 PGN Höegh Gallant 2014 38 Egas Höegh Grace 2016 42 SPEC FSRU and/or LNGC Long-term contract LNGC interim trading Extension option Under construction intermediate charter 7 * LNG carriers ** 100% basis, units are jointly owned
Positive commercial development Tendering market Active tendering markets with 4 FSRU awards so far this year Tendering activity concentrated in Asian and Middle East markets Höegh LNG in several tendering processes with start-up in the 2019 to 2021 period Commercial development Selected as the FSRU provider to AIE s LNG import project in Port Kembla, Australia, which is subject to receiving necessary governmental approvals leading up to FID Agreed terms with an energy major for an LNGC time charter for FSRU #9 for the interim period ahead of start-up under prospective tenders in 2020-2021 Outlook Solid underlying demand for FSRUs amid growing supply of LNG Höegh LNG in a leading position to compete for the most attractive projects 8
Agenda Highlights Operational update Market update Financials Summary 9
million tonnes Solid momentum in LNG trade 31 29 LNG trade by month, global Total trade of 158 million tonnes in H1 2018, up 7.4% from H1 2017 27 25 23 LNG trade of 27.8 million tonnes in July, a 7.6% increase over July 2017 21 19 17 15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 2015 2016 2017 2018 Source: Waterborne LNG / IHS Markit 10
mtpa Robust demand outlook for global LNG requiring significantly more LNG supply and import infrastructure 900 800 700 600 500 400 300 200 World LNG supply and demand JKT Europe China India Other Asia MENA S America RoW LNG Capacity South Korea planning to cut taxes on LNG by 74% to boost consumption and reduce reliance on coal China s switch from coal to gas to continue, requiring additional LNG supply Small-scale and LNG-as-marine-fuel expected to become major new sources of demand, particularly with IMO2020 regulations 100 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 Demand growth post 2022 subject to new LNG export projects reaching FID next 2-3 years Source: IHS Markit 11
mtpa 70% of demand growth expected from non-traditional Asian markets, using FSRUs as the preferred import solution 350 300 250 200 150 100 50 0 Asia (ex. Japan, Korea, Taiwan) LNG demand China India Bangladesh Thailand Pakistan Indonesia Malaysia Singapore Vietnam Myanmar Other 2000 2005 2010 2015 2020 2025 2030 2035 2040 Other (Australia, Hong Kong, Sri Lanka, Philippines): All contemplating FSRUs Myanmar: Contemplating FSRU Vietnam: Contemplating FSRU Indonesia: 2x FSRUs installed Pakistan: 2x FSRUs installed, contemplating more Thailand: Contemplating FSRU Bangladesh: FSRU in place, contemplating more India: 1 st FSRU to be installed Q4 2018, more contemplated China: 1 st FSRU in place Source: IHS Markit 12
South Australia is a promising market for new FSRU projects Market rationale: New gas supplies required to offset gas shortage in southern Australia Pipeline and distribution system in place, FSRUs the preferred solution due to speed to market and competitive cost Currently 4 FSRU projects in different stages of development Venice Energy, Port Adelaide AGL, Crib Point AIE, Port Kembla ExxonMobil, Longford HLNG selected as FSRU provider to the AIE FSRU Project in Port Kembla, south of Sydney, subject to governmental approvals and FID, planned start-up 2020 13
Units 29 FSRUs currently on the water 12 on order FSRU fleet and orderbook 1 by owner 12 10 8 2 1 Dynagas Dynagas Maran Of 12 newbuilding orders, 4 are built for own projects, and thus are not active in tendering processes 6 4 8 9 7 1 7 Java-1 SWAN Kolin Kalyon Gazprom Of the remaining 8 orders, 6 appear uncommitted with delivery through 2022 2 0 1 3 2 Höegh LNG Excelerate Golar LNG BW Gas Other Exmar MOL OLT Fleet Orderbook LNGC-to-FSRU conversion 1 Orderbook defined as confirmed orders, excluding LOIs, options and conversions not firmed up Source: Höegh LNG 14
Agenda Highlights Operational update Market update Financials Summary 15
Financial highlights for the quarter ended 30 June 2017 USD million 2Q 2018 1Q 2018 YTD 2018 YTD 2017 Total incom e 75.8 72.3 148.1 139.2 Charterhire and other expenses -10.5-9.8-20.4-18.2 Operating expenses -14.0-13.1-27.1-24.8 Administrative and BD expenses -11.0-11.2-22.2-21.9 EBITDA 40.3 38.1 78.4 74.3 Depreciation and impairment -13.6-11.3-24.9-19.8 EBIT 26.7 26.8 53.5 54.1 Net interest expense -15.7-12.0-27.7-29.0 Net other financials -1.7 0.5-1.2-1.6 Profit before taxes 9.3 15.3 24.6 23.5 Corporate income tax -1.4-2.1-3.5-3.5 Profit for the period 7.8 13.2 21.1 20.0 Comments Full quarter contribution from Höegh Giant on Naturgy time charter First revenues under Höegh Esperanza s time charter with CNOOC Higher depreciation and interest expenses following delivery of Höegh Esperanza on 5 April 16
Balance sheet USD million 30-Jun-18 31-Mar-18 31-Dec-17 Investments in FSRUs 1,671 1,375 1,386 Investments in new buildings 167 241 233 Other 102 115 92 Long-term restricted cash 13 13 14 Marketable securities 50 49 74 Cash and short-term restricted cash 145 177 160 Total assets 2,147 1,970 1,959 Comments Delivery of Höegh Esperanza on 5 April 2018 USD 200 million under the USD 230 million debt facility drawn to finance the final newbuilding installment for Höegh Esperanza Equity attributable to the parent 503 502 479 Non-controlling interests 257 242 226 Total equity 760 744 705 Interest bearing debt 1,317 1,149 1,156 Other 69 78 98 Total equity and liabilities 2,147 1,970 1,959 NIBD 1,109 909 908 Adjusted equity 782 774 763 Adjusted equity ratio 37% 40% 39% 17
USD million Approaching full debt and equity financing Commitments secured for up to USD 177 million in debt financing for FSRU #9, covering remaining capital expenditures of the unit 500 450 Debt repayment schedule Good progress on the debt financing of FSRU #10, to be delivered in May 2019 400 350 HLNG02 HLNG03 300 Once both financings are completed, Höegh LNG will be fully funded by both debt and equity The process to re-finance the Höegh Gallant / Höegh Grace facility maturing in Q4 2019 / Q2 2020 has started, with strong interests from potential lenders 250 200 150 100 50 Höegh Gallant Höegh Grace Independence Lampung Höegh Giant Maturity of the commercial tranche under the Independence debt facility moved 12 months out in time to May 2020 0 H2 2018 2019 2020 2021 2022 Amortisation Amortisation refinanced debt Balloons Bonds 18 * Amortisation includes debt on FSRUs #9-10. Amortisation of refinanced debt assumes similar amortisation profile as the current facilities, and that balloons are refinanced in full.
USD million Outstanding capital expenditures fully matched by available liquidity Available liquidity at 30 June 2018 USDm Capital expenditures and funding Cash, net of HMLP 117 250 Marketable securities 50 Revolving credit facility 45 200 Debt for FSRU #9 177 150 Available liquidity 389 Debt financing of FSRU #10 175 200 Increased leverage on Höegh Giant / Höegh Esperanza 59 100 50 USD 177 Debt financing In place USD 175 200 Debt financing in progress Targeted available liquidity 628-653 0 H2 2018 2019 2020 Outstanding capital expenditures, 30 June 380-400 FSRU #9 debt FSRU #10 debt Equity 19
Agenda Highlights Operational update Market update Financials Summary 20
Summary Excellent operational performance with EBITDA of 40 mill and net profit of 8 mill Financed remaining capex on FSRU #9, good progress for FSRU #10 Solid market backdrop with expanding LNG demand especially in Asian markets Busy tendering market for FSRUs, selected as FSRU provider for Australian project 21
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