FY2018 Annual Results for 12 months ended March 31 st 2019 IDG - - PowerPoint PPT Presentation
FY2018 Annual Results for 12 months ended March 31 st 2019 IDG Energy Investment Limited Stock code 650.HK June 2019 Contents About IDG Energy Investment 1 FY2018 Business Development 2 FY2018 Financial Highlights 3
（for 12 months ended March 31st 2019）
（Stock code：650.HK） June 2019
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Value chain synergy + proactive investment
First class energy sector research
China and North America
areas of high-growth energy sub-sectors
An SEHK Mainboard listed company (650.HK) focusing on energy assets investment and management
fundraising capability
*Including affiliated companies
Best-in-class energy assets manager Quality energy assets portfolio Strong shareholders’ endorsements and financing capability
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Industry leading investment team
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IDG Energy Investment – A global energy assets investment and management expert
strategy:
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Business Model – Focus on energy sector private equity investment
Financing and Fundraising Diversified Cross-border Investment Synergy / Management Efficiency Direct Investment in Energy Sector Energy Fund Management
Equity Investment:
Value chain synergy Investment return
M&A:
Asset management Cost reduction
Management Fee Superior Returns Economy of scale Industry financing Global perspective Value discovery Upstream oil and gas assets Cross-border investments in LNG value chain Current Portfolio
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Milestones – From transition completion to rapid business development
(650.HK), predecessor of the Company, raised HK$2.94 billion and spun off the hotel business
Renamed as “IDG Energy Investment”
2017.01 2016.07
Invested in JOVO, China’s first private LNG receiving terminal operator, marking the Company’s entrance into the natural gas value chain
2017.07
Issued new shares to Foxconn and raised HK$1.49 billion. Foxconn became the 2nd largest shareholder
2018.01
Invested in a shale oil block in Eagle Ford in the US
2017.09
Invested in one of the largest LNG export terminals under development in Canada
2018.02 2018.06
Invested in one of the most viable LNG export terminals in the US, deepening penetration into LNG value chain
2018.12
Formed a joint venture to provide LNG supply chain solutions, specializing in LNG ISO container logistic services
2018.11
Entered into a Framework Agreement with Jereh for the establishment of an energy fund
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Established an energy investment fund
Strategized investments along natural gas and LNG value chains
Increased reserves in upstream assets, implemented cost control and enhanced portfolio value
Exit planning for quality portfolio
Fund raising Investment Portfolio mgmt Portfolio exit
FY2018 Business Development Overview
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Diversified Business — Raising an energy fund and developing fund management business
Combined industry expertise to source investment targets with promising return
Energy Investment Fund Industry angle Financial return Extensive LP base Leverage effect
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Portfolio – Upstream oil and gas assets & LNG value chain projects
Upstream oil asset in China LNG Export Terminal in Canada LNG Export Terminal in the US Shale oil assets in Eagle Ford LNG Receiving Terminal in China LNG ISO Container Logistics
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Magnolia LNG – One of the most viable LNG export terminal projects in the US
Portfolio – LNG Limited (LNG export terminal in the US)
LNG Limited – Magnolia LNG Export Terminal
Government approval complete The project's base capacity of 8 million ton per annum has received all approvals from the US regulators, including the final decision and commencement permit by the Federal Energy Regulatory Commission (FERC), and FTA and Non-FTA export permit by the United States Department of Energy (DOE) The project capacity has been expanded to 8.8 million ton per annum – DOE's FTA export permit has been obtained, and FERC has officially authorized and commenced the approval process for the expansion works Pipeline secured and abundant gas sources The project is connected to the Louisiana Gas Transmission Line (KMLP) of Kinder Morgan, the largest natural gas pipeline operator in the US. The pipeline is well connected to the shale gas core basins such as Marcellus, Utica and Haynesville through multiple major pipelines EPC contractor secured The project's general contractor, KSJV, is a JV formed by KBR, a world's leading contractor and SK E&C. KSJV will provide all procurement, manufacturing, shipping, installation, construction, commissioning and initial commencement services. The turn-key EPC contract guarantees the project's successful construction and the cap of maximum cost OSMR patented technology The project adopts LNGL’s OSMR patented liquefaction technology which significantly reduces feedstock gas loss and CO2 emissions, improves liquefaction efficiency, and reduces production costs Financing guarantee Stonepeak Partners, a well-known US infrastructure fund, has promised a US$1.5 billion equity investment in the Magnolia LNG project to guarantee the financing for the project's final investment decision (FID)
(8.8 MTPA)
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Portfolio – GNL Quebec (LNG export terminal in Canada)
One of the largest LNG export projects under development in Canada
Connecting to the low-cost gas sources in NA with distance advantage to the end markets Planned Annual Capacity 11 mmtpa Terminal Location Quebec, Canada Pipeline Construction 750km, connecting Quebec export terminal and TransCanada pipeline (TCPL) Early stage of EPC Pre-FEED: Entrusted to Bechtel, Completed FEED: Assessing LOI submitted by each companies for screening Planned FID period 2021
GNL Quebec – Energie Saguenay LNG export terminal
Project Overview Project Highlights Significant Progress in Project Approval Social and Environmental Impact Assessment (SEIA) has been submitted to Canadian Environmental Assessment Agency (CEAA) and will be approved soon The project has received export permit issued by Canada National Energy Board (NEB) Low Cost Gas Source The existing pipeline, TCPL, and a proposed pipeline of the project connected to low cost gas source in AECO. Gas price in AECO is 40%- 50% lower than Henry Hub Low Cost Hydroelectric Supply Agreement signed with Hydro-Quebec for hydroelectricity Using hydroelectricity to reduce operating cost and greenhouse gas (GHG) emissions to avoid potential carbon taxes of $40-80/ton Easy accessibility to European and Asian markets The project is 5,000-6,000km away from the major European market, 3,500km closer than that from the Gulf of Mexico Continuous Progress in Marketing Demand from potential buyers in Europe and Asia to cover 100% liquefaction capacity Round D Financing Proceed Smoothly The D round financing quota of the project has been confirmed to be funded by the investors and the local government
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importing LNG ISO tanks from Asian countries such as Japan
modes for multiple gas sources
International Shipping Domestic transfer Other updates
already purchased 293 tanks and started to generate revenue in 1Q19
qualification of conducting road transportation for hazardous materials
tank per day by the end of 2019
utilizing domestic multimodal transport system
JUSDA Energy
Management team
51% 39% 10%
Door-to-door service with ISO-tank LNG
Portfolio – JUSDA Energy (LNG ISO container logistics)
Intelligent ISO- tank logistic management system
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Portfolio – JOVO (Domestic LNG receiving terminal)
JOVO Dongguan Receiving Terminal – China’s first private LNG receiving terminal
Island Terminal with a designed receiving capacity of 2 million tons per annum
consumption, the country's LNG imports are growing rapidly
increased its import volume significantly from the basis of 1 million tons in 2017
listing in China
2016 – 2018 China natural gas consumption and growth rate 2016 – 2018 China LNG imports and growth rate
(billion m3) (billion m3)
Sources: Company, SIA Energy, Data from China Customs
8% 15% 17%
0% 5% 10% 15% 20%
100 150 200 250 300 2016 2017 2018 33% 47% 41% 0% 10% 20% 30% 40% 50%
20 30 40 50 60 70 80 2016 2017 2018
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40 45 50 55 60 65 70 75 80 85 90
Domestic Upstream Oilfield
for 100% equity
*Reserves and NPV are per third-party (CPR) assessment results as of March 31st 2019
15.3 million bbl
RMB1.67 billion
Portfolio – Hongbo Mining (Domestic upstream oilfield)
123 168 FY2017 FY2018
Revenue (HK$mm)
56 67 FY 2017 FY 2018
Realized price (US$/bbl)
Brent Price
32 31 FY2017 FY2018
Production cost (incl. D&A) (US$/bbl)
36 39 FY2017 FY2018
Production (‘0000 bbl)
US$/bbl
Sources: the Company, ICE
15 Revenue (US$mm) Realized price (US$/boe) Cash cost (US$/boe)
960 FY2018
Portfolio – Stonehold (US upstream shale oil and gas block)
Overview
Reserves
Production
boe and gas-to-liquid ratio of ~22:78 2018 Update
maximize natural gas revenue
scattered blocks and maximizing revenue from the net acres
Field overview World-class Unconventional Shale Oil and Gas Block 2018 Key Performance Metrics
Production (mboe)
16 FY2018 48 FY2018 50 FY2018 2018 2018 2018 2018
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123,399 74,395 168,026 163,289 FY2017 FY2018 14,493 27,379
Net profit
7.3% 8.3%
Net profit margin
FY2017 FY2018
Investment income Revenue from sales
101,656 236,636
EBITDA
51.4% 71.4%
EBITDA margin
FY 2017 FY 2018 FY2018 FY2017 Change HK$'000 HK$'000 Revenue from sales 168,026 123,399 36% Investment income 163,289 74,395 119% Total income 331,315 197,794 68% Operating costs (93,359) (91,218) 2% Total income (net of cost) 237,956 106,576 123% EBITDA 236,636 101,656 133% Profit before tax 35,482 24,323 46% Net profit 27,379 14,493 89% Basic earnings per share (HK$ cent per share) 0.437 0.403 8% Diluted earnings per share (HK$ cent per share) 0.436 0.294 48%
Income Statement Summary
Financial Highlights – Material growth of revenue and EBITDA & significant rise in net profit
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Financial Highlights – Low gearing ratio with sufficient cash on balance
Balance Sheet Summary
2019.3.31 2018.3.31 2019.3.31 2018.3.31 HK$'000 HK$'000 HK$'000 HK$'000 Current Assets Current Liabilities Cash and cash equivalents 1,191,534 1,786,403 Convertible notes 226,514 284,730 Others 101,028 162,318 Others
1,292,562 1,948,721 226,514 287,003 Non-current Assets Non-current liabilities Fixed assets 615,356 635,283 Convertible notes
Financial assets at fair value 1,880,914 1,606,746 Convertible bonds 45,653 67,148 Others 109,937 72,711 Others 83,189 85,564 2,606,207 2,314,740 128,842 386,899 Total Liabilities 355,356 673,902 Equity Total Equity 3,543,413 3,589,559 Total Assets 3,898,769 4,263,461 Total Liabilities and Equity 3,898,769 4,263,461
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Investment Strategy – Penetration in LNG value chain through investments
Investment strategies – Expanding along LNG value chain Long-term Reliance on Imports
Domestic production does not sufficiently meet fast-growing demand. In 2018, natural gas import reached 44% of total gas consumption volume in China and demonstrated a trend of continuous growth
Accelerated LNG Growth
Inland China relies on pipeline gas imports, while southeast coastal areas rely on LNG imports. By 2017, the volume
North America Export Potential
North America has abundant low-cost natural gas supply due to Shale Gas Revolution. Relatively low project execution risks and stable low-cost supply will pave the way for North America to become the world’s largest LNG exporter Environmental protection pressure and structural reform in the energy sector have been driving up China’s LNG
Year Plan. By 2020, natural gas distribution market will evolve into a trillion market
Rapid Demand Growth Upstream low-cost assets Core midstream LNG assets Downstream end-user markets
Core upstream assets in North America to hedge price risks LNG export terminals in North America LNG receiving terminal in China LNG midstream logistics Natural gas end-user markets in China
Sources: Company, SIA Energy
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Investment Strategy – Infrastructure assets and equity investments to create synergy
Infrastructure assets
and downstream energy infrastructure with a focus on LNG
development capability
efficiency, leveraging on equity partnership to boost financial return on the investment in infrastructure assets
Equity investments
sustainable development capability along the LNG and energy value chain
through companies invested
Capital Demand
infrastructure capital to support
Capital Supply
Equipped with competitive capital Expand investments
Explore opportunities through wide industry network, provide financing with high flexibility, invest in segments where the Company boasts of knowledge in depth, and create synergy through diligent post-investment management
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Long-term goals
return and long-term value investments
Mid-term goals
multifold exit opportunities
Near-term goals
Platform Value
Fundraising capability Competitive advantages Global network and optimized allocation Project pipeline and industry network Superior financial return Sophisticated deal execution Expertise in energy sector
Mission & Vision – A trusted and best-in-class energy assets investment and management platform
Investor Relations Contact： Office ： (852)39031325 Cell ： (852)91802352 / (86)15012526522 Email ： ir@idgenergyinv.com Website： http://www.idgenergyinv.com
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Disclaimer
The information in this presentation is provided to you by IDG Energy Investment Limited (the “Company”), solely for informational purposes and is not an offer to buy or sell, or a solicitation of an offer to buy or sell, any security or instrument of the Company, or to participate in any investment or trading strategy, in the Hong Kong Special Administrative Region of the People's Republic of China or anywhere else. By viewing or participating in this presentation, you acknowledge and agree that (i) the information contained in this presentation and information presented orally or
shall not be disclosed, reproduced or distributed in any way to anyone else, (iii) no part of this presentation or any other materials provided in connection herewith may be retained or taken away following this presentation, and (iv) all participants must return this presentation and all other materials provided in connection herewith to the Company at the completion of the presentation. By viewing, accessing or participating in this presentation, you agree to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. This presentation does not and does not purport to contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company. This presentation does not constitute legal, regulatory, accounting or tax advice to you. We recommend that you seek independent legal, regulatory, accounting and tax advice regarding the contents of this presentation. This presentation does not constitute and should not be considered as any form of financial opinion or recommendation by the Company or any other party. No representations, warranties or undertakings, express or implied, are or will be made in or in relation to, and, so far as is permitted by law, no responsibility or liability is or will be accepted by any person (for the avoidance of doubt, including but not limited to, the Company and its affiliates and the controlling persons, directors, supervisors, officers, partners, employees, agents, representatives or advisers of any of the foregoing), with respect to, and no reliance should be placed on, the accuracy, fairness or completeness of the information in this presentation. This presentation contains statements that constitute forward-looking statements. All statements other than statements of historical facts are forward-looking statements. The forward-looking statements stated herein are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors and assumptions, many of which are beyond the Company’s control. Accordingly, you should not place undue reliance on any forward-looking information. Neither the Company nor any of its affiliates, advisors, representatives or underwriters has any obligation to, nor do any