I.M. Skaugen SE 3Q 2010 presentation IMS Innovative Maritime - - PowerPoint PPT Presentation

I.M. Skaugen SE – 3Q 2010 presentation

IMS – Innovative Maritime Solutions

15 October 2010

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Key figures y g

USD million 2Q 1Q (except per share data) 2010 2009 2010 2009 2010 2010 YTD 3Q 3Q 2010 2009 2010 2009 2010 2010 EBITDA 14.6 18.8 7.9 4.6 2.3 4.4 EBIT 0.6 4.0 3.4

• 0.6
• 2.3
• 0.5

Financial items, investments and associates

• 9.4
• 10.0
• 4.2
• 3.4
• 2.1
• 3.2

Exchange gain/loss 0.2 4.7 0.8 1.2

• 0.1
• 0.4

Exchange gain/loss 0.2 4.7 0.8 1.2 0.1 0.4 Net result before tax

• 8.6
• 1.3
• 2.8
• 4.5
• 4.2

Net debt 76.0 55.1 76.0 55.1 72.1 73.6 Net interest bearing debt 148.5 137.6 148.5 137.6 128.5 125.6 Interest rate coverage ratio ** 1.17 1.67 1.67 1.1 1.00 1.3 Total liquidity 55.3 73.8 55.3 73.8 57.7 75.0 Equity ratio* 26.9% 29.4% 26.9% 29.4% 27.2% 27.6% Book equity (excl minority interests) 84.5 101.2 84.5 101.2 84.5 90.3 Book equity per share - USD 3.1 3.7 3.1 3.7 3.2 3.3 * = book equity/total assets ** = EBITDA/net interest

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IMS performance third quarter of 2010 p q

• Norgas Gas Carriers in 3Q10 experienced

higher utilization and improved

IMS EBITDA & Pre‐tax results

higher utilization and improved profitability from increased exports out of the Middle East

• The China activities posted slightly reduced

6 8 10

The China activities posted slightly reduced results, while the Marine transfer activities (SPT) suffered from a most challenging crude tanker markets and were not able to continue its positive trend seen earlier in h

2 2 4

USD Million

the year

• When going into the final quarter of 2010

we see revenues and rates stabilizing at an improved level in the gas carrier segment

‐8 ‐6 ‐4 ‐2

U

improved level in the gas carrier segment.

‐10 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010

EBITDA Pre‐tax result

3

Source: Internal

Our strategic positioning ”East of Suez”

We see mounting signs of a decoupled world economy in our core markets

Source: IMF World Economic Outlook October 2010

We believe that our strategy of focusing on emerging markets and specially business in “East of Suez” will pay off as this may be more than a cyclical trend

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in East of Suez will pay off as this may be more than a cyclical trend.

Small scale LNG IMS i ti i l di t ib ti f t f l IMS innovative regional distribution of tomorrows fuel

“Small Scale LNG is an effective solution for making natural gas available to energy users not currently connected to pipeline networks.”

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pipeline networks.

Norgas Innovation – I.M. Skaugens first LNG Multigas vessel

IMSK ‐ Capital issues p

• I.M. Skaugen completed a new bond issue

ith t it i S t b 2012 t t l f

IMS - Bond maturity schedule (000' USD)

with maturity in September 2012, a total of NOK 300 mill (equal to abt. USD 50 mill). The issue of this new bond is part of the company’s proactive efforts to mitigate potential refinancing risks in the bond

100 000 120 000 140 000

3Q 2010

p g markets for our bond loan portfolio in 2011

• Average interest cost (incl. of margin) for all
• f our outstanding bonds financed now

60 000 80 000 100 000

g stand at 6,6 % given current USD interest rate levels

• From the proceeds of the 3 remaining
• 20 000

40 000

From the proceeds of the 3 remaining vessels sold to Teekay LNG partners (the ships are all scheduled for delivery in the 1H of 2011), we are able to repay the majority of the remaining debt in 2011.

3Q 2010 Year end 2009

Source: Internal

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Gas Activities ‐ Norgas Gas Activities Norgas

SR-spot rates (T/C excl. waiting time)

We experienced better utilization and i d f i h f h G C i

600 700 800

month

15000 SR TCE

improved freight rates for the Gas Carrier Activities over the quarter:

• Increased exports of petrochemicals out of

h Middl E Th l

300 400 500

USD 1000' per

8000 ETH TCE 6500 SR TCE

the Middle East. The volumes were captured both under our Contracts of Affreightment and from more spot cargoes

• Asian olefin markets strengthened in the

100 200 300 3500 SR 1yr TC

• Asian olefin markets strengthened in the

third quarter, with demand improving as activity in the manufacturing industry entered its peak season. This improved trading conditions also affected our

Source: Inge Steensland

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Wintergas vessels in north Asia.

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Diverging regional Ethylene prices d bit t iti

• pened up arbitage opportunities

160

2000

Price comparison

120 140 160

1400 1600 1800 2000

60 80 100

600 800 1000 1200

USD/barrel USD/MT

20 40

200 400 600

Ethylene JAP Ethylene NWE Crude WTI

Source: Bloomberg

The higher prices in Europe spurred incentives for increased imports and we saw more products moving also to this area from the Middle East.

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Why we continue to focus on the Middl E t li t Middle East clients

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Source: Nexant ChemSystem

SR Fleet development 3Q p Q

• 8 new ethlyene vessels are ordered as part of the fleet renewal for a key competitor and their take

lid ti b ti i t Th i i 8 th l i d d i tl

• ver consolidation by a new participant. The remaining 8 ethylene carriers ordered is currently

without an established operator and will be added on to the overall market. These are the first newbuildings designed for the long haul ethylene trade contracted since the financial crisis of 2008 h h i h l h fl ill b h i i d b hi li i h i d

• The growth in the supply or the fleet will be somewhat mitigated by ship recycling in the period

with 18 % of capacity that are now above 25 years and thus eligible for recycling or alternative uses in the coming years. In 3Q 2010 2 vessels were scrapped and these had an average age of 29 years

• Norgas has now 5 new ships or 53 600 cbm capacity to be delivered in this period and that is about

13 % of the ethylene capacity to come in this period.

Fleet development Orderbook

Cbm

• No. of vsls

Cbm

• No. of vsls

Fleet total 2,596,377 325 2010 98,134 12 Deliveries 123,267 13 2011 151,050 15 Scrapped 143,012 14 2012+ 165,000 14 Contracted 160,100 14 Total 414,184 41 O d b k 414 184 41 % Fl 16% 13%

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Orderbook 414,184 41 % Fleet 16% 13%

China Activities

• Our China activities posted a slightly

reduced result compared to 2Q10 reduced result compared to 2Q10

• Norgas Creation –the second Multigas*

ship was successfully delivered to the Norgas Pool on August 1st The third MG Norgas Pool on August 1st. The third MG ship is berthed alongside Skaugen bay for further outfitting in this quarter with expected delivery in late 2010 or early 2011

• The third Wintergas vessel is technically

complete, but there is an ongoing case awaiting the export license for the vessel which causes delay However we expect which causes delay. However we expect the delivery to be early fourth quarter.

*Multigas ships ‐ 10 000 cbm LPG/Ethylene/LNG carriers Multigas ships ‐ 10 000 cbm LPG/Ethylene/LNG carriers

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SMC Delivery Schedule (light blue delivered) y ( g )

Vessels Type CBM Ex.Del Mei WenTi Fully pressurized LPG carrier 3 200 1Q2007 Qin Shi Huang Fully pressurized LPG carrier 3 200 2Q2007 Qin Shi Huang Fully pressurized LPG carrier 3 200 2Q2007 Xi Shi Fully pressurized LPG carrier 3 200 3Q2008 Norgas Pan Semi ref LEG/LPG and chemical carriers 5 800/9 600 2009 Norgas Cathinka Semi ref LEG/LPG and chemical carriers 5 800/9 600 2009 Norgas Camilla Semi ref LEG/LPG and chemical carriers 5 800/9 600 4Q2010 Norgas Camilla Semi ref LEG/LPG and chemical carriers 5 800/9 600 4Q2010 Norgas Innovation Semi ref LNG/LEG/LPG/VCM carriers 10 000 2010 Norgas Creation Semi ref LNG/LEG/LPG/VCM carriers 10 000 3Q2010 Norgas Invention Semi ref LNG/LEG/LPG/VCM carriers 10 000 1Q2011 Norgas Conception Semi ref LNG/LEG/LPG/VCMcarriers 10 000 3Q2011 Norgas Conception Semi ref LNG/LEG/LPG/VCM carriers 10 000 3Q2011 Norgas Unikum Semi ref LNG/LEG/LPG/VCM carriers 12 000 1Q2011 Norgas Vision Semi ref LNG/LEG/LPG/VCM carriers 12 000 3Q2011 To be confirmed Type CBM Ex.Del TBN Semi ref LNG/LEG/LPG/VCMcarriers 12 000 ‐

Source: Internal

TBN Semi ref LNG/LEG/LPG/VCM carriers 12 000 TBN Semi ref LNG/LEG/LPG/VCM carriers 12 000 ‐ TBN Semi ref LNG/LEG/LPG/VCM carriers 12 000 ‐ TBN Semi ref LNG/LEG/LPG/VCM carriers 12 000 ‐

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Marine Transfer Activities

• The Marine Transfer Activities continue to suffer from difficult trading conditions in the crude oil tanker

markets as a continued stream of newbuildings is delivered Despite this we signed a new and for us markets as a continued stream of newbuildings is delivered. Despite this we signed a new and for us profitable 2 year full service lightering and support contract commencing in mid October this year in the third quarter.

• The global support services of SPT continue to generate a positive result offsetting the negative

The global support services of SPT continue to generate a positive result, offsetting the negative performance of the tankers. One of the support vessels began operations in West Africa in September and SPT also hope to conclude its first business in South Asia during the last quarter of the year.

1 5 2 2,5 3

SPT EBITDA (50% basis)

1 ‐0,5 0,5 1 1,5

M USD

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‐1

Source: RS Platou Source: In house

The IMSK Share

• During the third quarter of 2010 the IMSK share performed below the OSEBX and the majority of its peers.
• IMSK has agreed with Argo Securities to terminate the current market maker agreement. Argo Securities

will until 23rd of November perform its obligations under this agreement.

50,00 55,00

IMSK VS Peers

50,00

I.M.Skaugen vs. Transport Index, OSEBX & MSCI World

25,00 30,00 35,00 40,00 45,00 50,00 30,00 35,00 40,00 45,00 10,00 15,00 20,00 IMSK CECO ODF SNI BLTAIJ Stealthgas 20,00 25,00 , Source: Bloomberg IMSK OSEBX OSE Transport MSCI World

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g

Source: Bloomberg Source: Bloomberg

Further information about I.M. Skaugen Company Activities Please visit our website: http://www.skaugen.com

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