Epic Gas
Q1 2019 Earnings Presentation
15 May 2019
Epic Gas Q1 2019 Earnings Presentation 15 May 2019 Disclaimer - - PowerPoint PPT Presentation
Epic Gas Q1 2019 Earnings Presentation 15 May 2019 Disclaimer This Presentation (hereinafter collectively referred to as the Presentation) has been produced by Epic Gas Ltd . (the Company, or Epic) for information purposes
15 May 2019
This Presentation (hereinafter collectively referred to as the “Presentation”) has been produced by Epic Gas Ltd. (the “Company”, or “Epic”) for information purposes only. This Presentation contains information obtained from third parties. As far as the Company is aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. To the best of the knowledge of the Company, the information contained in this Presentation is in all material respects in accordance with the facts as of the date
reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the Company or any of its parent or subsidiary undertakings or any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any of its parent or subsidiary undertakings or any such person’s officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results.
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Revenue of $39.6 million, up 3.1% Time Charter Equivalent revenues of $9,718 per vessel calendar day, up 9.4% Operational Utilisation up 230 basis points to 94.2% Operating Expenses of $4,400 per vessel calendar day, up 2.9% Adjusted EBITDA of $11.0 million, up 29.4% Net Loss of $0.3 million, an improvement of 89% Fleet: as of 31 March 2019, 39 vessels on the water, with projects ongoing to add incremental profitable vessels.
All figures are year on year and in US dollars unless stated
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Smaller LPG Vessels have Smallest Order Book (Chinese Fleet Excluded) Source: Clarksons Register
capacity, considering the 4,200cbm scrapped in Q1 2019.
Pressure Vessel Global Fleet Development x Source: Clarksons Register
331 202 116 394 10 5 7 47 100 200 300 400 500 600
3k - 13k 3k - 13k >13k - 25k >25k PR SR (incl Eth) FR & SR (incl Eth) FR & SR (incl Eth)
Number of Vessels On Water On Order
0% 20% 40% 60% 80%
15,000 40,000 65,000 90,000 115,000 140,000 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 3,000 - 4,999cbm 5,000 - 6,999cbm 7,000 - 8,999cbm 9,000 - 13,000cbm Scrapping Expected Scrapping YoY growth (right axis)
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Global LPG Seaborne Trade Strong Demand Growth 9% 2020 Source: Drewry Q1’19 US Total LPG Exports -2% qoq, +12% yoy. Butane +6% qoq, +62% yoy Source: IHS Markit
92.9 95.6 97.7 99.8 108.7 109.8 114.3 119.1 12.4% 2.9% 2.2% 2.1% 9.0% 1.0% 4.1% 4.3% 11.4%
1.9% 3.9% 8.0% 5.7% 4.9% 4.8%
0.0% 4.0% 8.0% 12.0% 16.0% 0.0 25.0 50.0 75.0 100.0 125.0 150.0 2016 2017 2018 2019 2020E 2021E 2022E 2023E Million Tonnes
Global Seaborne Trade % growth (Seaborne Trade) % growth (tonne-mile demand)
Big Volumes China & India Remain Key Demand Drivers Source: FGE Regional Demand Growing x Source: Drewry
2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 (MT) Ethane Propane Butane IsoButane
2017 2018 2019 2020 2025 ∆ China 18.3 18.9 19.9 20.8 23.6 29% India 11.9 12.4 14.8 16.8 19.9 67% Japan 10.6 10.9 11.1 11.4 11.6 9% S Korea 6.1 6.2 7.2 7.4 8.4 38% LPG Imports (million tonnes) 2017 2018 2019 2020 2025 ∆ Indonesia 5.5 5.3 5.6 6.0 7.2 31% Philippines 1.2 1.2 1.3 1.5 2.1 75% Thailand 0.6 0.7 0.9 1.3 1.7 183% Vietnam 1.3 1.2 1.3 1.4 3.1 138% LPG Imports (million tonnes)
Growing demand drives import Growth
Source: FGE
USA pressurised and small sized semi-ref (SR) vessels LPG exports almost double year on year Source: IHS Markit China Propylene Imports hold up as Polypropylene production drives Propylene demand and balances increased PDH capacity, with developing Imports from other Asian countries Source: Argus
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Million Tonnes 2017 2018 2025 2030 Indonesia 5.5 5.3 7.2 8.4 Philippines 1.2 1.2 2.1 2.7 Vietnam 1.3 1.2 3.1 3.5 West Africa 0.7 0.7 1.3 1.5 South Africa 0.3 0.2 0.7 1.0 Morocco 2.8 3.0 3.0 3.0
2,641 3,048 2,771 2,903 3,099 2,844 8,000 12,000 16,000 20,000 24,000 28,000 2,000 4,000 6,000 8,000 10,000 2013 2014 2015 2016 2017 2018 2019E 2020E Year End PDH Capacity ('000 tonnes) Chinese Propylene Imports ('000 tonnes) Chinese Polypropylene Prod ('000 tonnes) (right-axis) 20,000 40,000 60,000 80,000 100,000 120,000 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Carib Cargo Qty Cen/S. Amer Cargo Qty Med Cargo Qty WAF Cargo Qty SR (<12k cbm) Total Cargo Qty
SR Vessels
0% 4% 8% 12% 16%
2,000,000 3,000,000 2013 2014 2015 2016 2017 2018 2019E 2020E (Million Tonnes)
China Derivative Demand Creates Propylene Defecit
Production Defecit Derivative Demand % Growth
Pressure Vessels
12 Month Time Charter Market (USD/day)
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Q1 2019 – freight levels remain level
$5,000 $7,000 $9,000 $11,000 $13,000 $15,000 $17,000 Jan-12… Jul-12 Jan-13… Jul-13 Jan-14… Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 3,500cbm-Steem1960 5,000cbm-Steem1960 7,500cbm-Grieg, Gibson, Braemar, BRS 11,000cbm-Epic
8 ✓ Loaded approximately 760,115 tonnes ✓ 640 cargo operations ✓ 103 different ports ✓ LPG (77%) ✓ Petchems (23%) ✓ 5 vessels in the Americas, 20 in Europe/Middle East/Africa, 14 in Asia.
Diversified Geographical Location of Fleet Diversified Geographical Trade Route Options Higher in the Middle East Cargo Operations Summary, Q1 2019 Cargoes (Tonnes) Transported in Q1 2019, +5.3% YoY
585,798 174,317 LPG Petchems
Vessels by Segment Americas EMEA Asia Total Fleet 3,300 – 4,100cbm 2 4 6 5,000 – 6,300cbm 1 3 6 10 7,000 – 7,500cbm 2 11 2 15 9,500cbm
11,000cbm
2 6 Total 5 20 14 39 Fleet Capacity (cbm) 267,400
6,856 1 2 3 4
50 150 250 350 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 2018 2019 Total No. of Load Operations
AFRICA ASIA EUROPE MIDDLE EAST OCEANIA THE AMERICAS Loads per Day (right-axis)
An Integral Part of the Global Seaborne LPG Supply Chain for all vessel sizes
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Epic Gas STS Operations Heat Map
lower Quarter on Quarter largely due to a supply driven change from STS to pressurised port operations in one trade.
Epic Gas STS Operations by Region qoq - higher in Middle East, lower in Africa and Asia
2014 2015 2016 2017 2018
24 108 198 413 358
25 50 75 100 125 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 2019 Off Singapore Off Male Middle East
Carib Others
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Time Charter Equivalent (“TCE”) Revenue and Opex Voyage Days
$28.8 $28.4 $25.9 $28.2 $30.1 $29.9 $30.7 $32.0 $32.1 $32.4 $36.1 $34.9 $34.0 $8,639 $8,183 $7,384 $8,206 $8,424 $8,022 $7,960 $8,449 $8,881 $9,141 $10,132 $9,971 $9,718 $4,449 $4,040 $4,120 $4,335 $4,082 $4,170 $4,274 $4,171 $4,276 $4,127 $4,010 $4,071 $4,400 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2016 FY2017 FY2018 FY2019 TCE Revenue and Opex per Calendar Day TCE Revenue ($millions) TCE Revenue TCE per Calendar Day Vessel Opex per Calendar Day 3,273 3,385 3,362 3,295 3,432 3,495 3,763 3,738 3,548 3,459 3,515 3,458 3,428 23% 24% 29% 25% 20% 26% 25% 31% 32% 25% 25% 23% 25% 0% 20% 40% 60% 80% 100%
2,000 3,000 4,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2016 FY2017 FY2018 FY2019 % Voy Days in Spot Market Voy Days TC Days Spot Days COA Days (relets excluded) % Spot
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Book value of $491m below latest broker FMV estimates
Cash of $23.1m
Net borrowings + capital leases/total assets (excl. leased assets) of 45%
Subsequent to quarter end, share issue launched to existing shareholders to raise gross proceeds of $60 million to finance the acquisition of additional vessels, to strengthen the Company's working capital and for general corporate purposes. Offer has been fully underwritten by BW Group and closed on 13 May 2019.
Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Credit Agricole 32.0 27.9 23.9 20.5 18.0 ABN/NIBC/CA 64.2 59.1 54.0 48.9 43.8 ABN/DVB/Nor d LB 61.1 48.8 38.8 30.5 22.1 NIBC 6.6 5.4 4.2 3.0 Japanese Owners 64.9 60.9 56.8 52.5 48.1 31.0 27.2 Finance Leases 47.5 41.7 35.4 28.8 4.5 Interunity 1.3 0.9 0.4 Balloon 27.2 88.5 Total 277.7 244.7 213.5 184.1 163.7 119.5 27.2
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Summary Q1 2019
Outlook
capacity and ongoing demand growth for LPG shipping.
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Vessel: 3,500 cbm cbm Built Yard Vessel: 7,200-7,500 cbm Built Yard Epic Catalina 3,500 2007 Kanrei Epic Borkum 7,200 2000 Murakami Hide Epic Cobrador* 3,500 2009 Kanrei Epic Barbados 7,200 2001 Murakami Hide Epic Cordova* 3,500 2009 Kanrei Epic Bermuda 7,200 2001 Murakami Hide Epic Corsica 3,500 2009 Kanrei Epic Barnes 7,200 2002 Murakami Hide Epic Caledonia 3,500 2014 Kitanihon Epic Bali 7,200 2010 Kyokuyo Epic Curacao 3,500 2014 Kitanihon Epic Borneo 7,200 2010 Kyokuyo Sub Total 6 Vessels 21,000 cbm Epic Bell* 7,200 2014 Kyokuyo Epic Bird* 7,200 2014 Kyokuyo Epic Bolivar 7,500 2002 Shin Kurushima Epic Burano 7,500 2002 Watanabe Epic Boracay 7,500 2009 Murakami Hide Emmanuel** 7,500 2011 Murakami Hide Epic Borinquen 7,500 2016 Sasaki Epic Bonaire 7,500 2016 Sasaki Epic Baluan 7,500 2017 Sasaki Sub Total 15 Vessels 110,100 cbm Vessel: 5,000-6,300 cbm cbm Built Yard Vessel: 9,500 cbm cbm Built Yard Epic St. George 5,000 2007 Shitanoe Epic Madeira 9,500 2006 Miura Epic St. Kitts 5,000 2008 Kanrei Epic Manhattan 9,500 2007 Miura Epic St. Martin 5,000 2008 Kanrei Westminster** 9,500 2011 Miura Epic St. Lucia 5,000 2008 Sasaki Sub Total 2 Vessels 19,000 cbm Epic St. Vincent 5,000 2008 Sasaki Vessel: 11,000 cbm cbm Delivery Yard Epic St. Croix 5,000 2014 Sasaki Epic Sicily* 11,000 2015 Sasaki Epic St. Thomas 5,000 2014 Sasaki Epic Samos 11,000 2016 Kyokuyo Epic St. Agnes 5,000 2015 Kitanihon Epic Sentosa 11,000 2016 Kyokuyo Epic St. Ivan 5,000 2015 Kitanihon Epic Shikoku 11,000 2016 Kyokuyo Epic Balta 6,300 2000 Higaki Epic Sardinia* 11,000 2017 Kyokuyo Epic Salina 11,000 2017 Kyokuyo Sub Total 10 Vessels 51,300 cbm Sub Total 6 Vessels 66,000 cbm
*Bareboat **TC-in
and 276,900 cbm Overall Total of 40 Vessels,
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Listing Market Merkur Market Market Cap (NOK) 972.5 M Shares Outstanding /Float 70.5M /70.5M
0.00 0.50 1.00 1.50 2.00 2.50
Share Price