I.M. Skaugen SE – 3Q 2010 presentation IMS – Innovative Maritime Solutions 15 October 2010 1
Key figures y g USD million YTD 3Q 3Q 2Q 1Q (except per share data) 2010 2010 2009 2009 2010 2010 2009 2009 2010 2010 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 Exchange gain/loss 0.2 0.2 4.7 4.7 0.8 0.8 1.2 1.2 -0.1 0.1 -0.4 0.4 Net result before tax -8.6 -1.3 0 -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 2
IMS performance third quarter of 2010 p q • Norgas Gas Carriers in 3Q10 experienced IMS EBITDA & Pre ‐ tax results higher utilization and improved higher utilization and improved 10 profitability from increased exports out of the Middle East 8 6 The China activities posted slightly reduced The China activities posted slightly reduced • 4 results, while the Marine transfer activities (SPT) suffered from a most challenging 2 USD Million crude tanker markets and were not able to 0 continue its positive trend seen earlier in U ‐ 2 2 the year h ‐ 4 • When going into the final quarter of 2010 ‐ 6 we see revenues and rates stabilizing at an ‐ 8 improved level in the gas carrier segment 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 Source: Internal 3
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 in East of Suez will pay off as this may be more than a cyclical trend. 4
Small scale LNG IMS i IMS innovative regional distribution of tomorrows fuel ti i l di t ib ti f t f l “Small Scale LNG is an effective solution for making natural gas available to energy users not currently connected to pipeline networks.” pipeline networks. Norgas Innovation – I.M. Skaugens first LNG Multigas vessel 5
IMSK ‐ Capital issues p • I.M. Skaugen completed a new bond issue IMS - Bond maturity schedule (000' USD) with maturity in September 2012, a total of ith t it i S t b 2012 t t l f 3Q 2010 NOK 300 mill (equal to abt. USD 50 mill). 140 000 The issue of this new bond is part of the company’s proactive efforts to mitigate 120 000 potential refinancing risks in the bond p g 100 000 100 000 markets for our bond loan portfolio in 2011 80 000 Average interest cost (incl. of margin) for all • 60 000 of our outstanding bonds financed now g stand at 6,6 % given current USD interest 40 000 rate levels 20 000 - From the proceeds of the 3 remaining From the proceeds of the 3 remaining • vessels sold to Teekay LNG partners (the ships are all scheduled for delivery in the 3Q 2010 Year end 2009 1H of 2011), we are able to repay the majority of the remaining debt in 2011. Source: Internal 6
Gas Activities ‐ Norgas Gas Activities Norgas We experienced better utilization and SR-spot rates (T/C excl. waiting time) improved freight rates for the Gas Carrier i d f i h f h G C i 800 Activities over the quarter: 700 15000 month • Increased exports of petrochemicals out of SR TCE 600 the Middle East. The volumes were h Middl E Th l USD 1000' per captured both under our Contracts of 8000 500 ETH TCE Affreightment and from more spot cargoes 400 6500 SR TCE • • Asian olefin markets strengthened in the Asian olefin markets strengthened in the 300 300 third quarter, with demand improving as 3500 SR 200 1yr TC activity in the manufacturing industry entered its peak season. This improved 100 trading conditions also affected our Wintergas vessels in north Asia. 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Inge Steensland 7
Diverging regional Ethylene prices opened up arbitage opportunities d bit t iti Price comparison 2000 2000 160 160 1800 140 1600 120 1400 100 USD/barrel 1200 USD/MT 1000 80 800 60 600 600 40 400 20 200 Ethylene JAP Ethylene NWE Crude WTI 0 0 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. 8
Why we continue to focus on the Middl E Middle East clients t li t Source: Nexant ChemSystem 9
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 over consolidation by a new participant. The remaining 8 ethylene carriers ordered is currently lid ti b ti i t Th i i 8 th l i d d i tl 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 • The growth in the supply or the fleet will be somewhat mitigated by ship recycling in the period h h i h l h fl ill b h i i d b hi li i h i d 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 Orderbook O d b k 414 184 414,184 41 41 % Fleet % Fl 16% 16% 13% 13% 10
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 11
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 Qin Shi Huang Fully pressurized LPG carrier Fully pressurized LPG carrier 3 200 3 200 2Q2007 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 Norgas Camilla Semi ref LEG/LPG and chemical carriers Semi ref LEG/LPG and chemical carriers 5 800/9 600 4Q2010 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 Norgas Conception Semi ref LNG/LEG/LPG/VCM carriers 10 000 10 000 3Q2011 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 TBN Semi ref LNG/LEG/LPG/VCMcarriers Semi ref LNG/LEG/LPG/VCM carriers 12 000 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 ‐ Source: Internal 12
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. SPT EBITDA (50% basis) 3 2,5 2 1 5 1,5 M USD 1 0,5 0 ‐ 0,5 ‐ 1 1 Source: RS Platou Source: In house 13
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