Magseis Fairfield ASA Q2 2019 27 th August 2019 The leading - - PowerPoint PPT Presentation

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Magseis Fairfield ASA Q2 2019 27 th August 2019 The leading - - PowerPoint PPT Presentation

Magseis Fairfield ASA Q2 2019 27 th August 2019 The leading provider of OBN seismic solutions Disclaimer This presentation (the Presentation ") has been prepared by Magseis Fairfield ASA (the The Company makes no representation or


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Magseis Fairfield ASA

Q2 2019

27th August 2019

The leading provider of OBN seismic solutions

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This presentation (the “Presentation") has been prepared by Magseis Fairfield ASA (the “Company” or “Magseis Fairfield”). The Presentation contains forward-looking information and statements relating to the business, financial performance and results of the Company and/or industry and markets in which it

  • perates.

Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “aims”, “anticipates”, “believes”, “estimates”, “expects”, “foresees”, “intends”, “plans”, “predicts”, “projects”, “targets”, and similar

  • expressions. Any forward-looking statements and other information contained in this

Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts based on the current expectations, estimates and projections of the Company or assumptions based on information currently available to the Company, which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such statements. Although the Company believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to its actual results. The Company makes no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither the Company nor any of its directors, officers or employees shall be liable to you or to any other party for any losses incurred as a result of your or their use of, or reliance on, any information contained in the Presentation. This Presentation does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities, and nothing contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information contained in this Presentation or on its completeness, accuracy or fairness. The information in this Presentation is subject to verification, completion and change. The contents of this Presentation have not been independently verified. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”), and are offered and sold only outside the United States in accordance with an exemption from registration provided by Regulation S under the US Securities

  • Act. This Presentation should not form the basis of any investment decision.

The Presentation speaks and reflects prevailing conditions and views as of the date of this presentation. It may be subject to corrections and change at any time without notice except as required by law. The delivery of this Presentation or any further discussions of the Company with any recipient shall not, under any circumstances, create any implication that the Company assumes any obligation to update or correct the information herein, nor any implication that there has been no change in the affairs

  • f the Company since such date.

Disclaimer

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Source: Magseis Fairfield

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SLIDE 3
  • The undisputed leader in the Ocean Bottom Seismic market
  • Magseis - flexible and automated proprietary acquisition technology
  • Fairfield - long time market leader and industry innovator
  • WGP - unique mobile source technology
  • Global leader in a USD 1bn+ market
  • Largest nodal pool in the market – ability to scale
  • Global reach - diverse customer base in all major basins
  • Asset light business model
  • Flexible cost structure
  • Rig up / rig down on vessels of choice

3

Source: Magseis Fairfield

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SLIDE 4

Highlights Q2 2019

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  • Revenue of USD 132m - EBITDA of USD 26m including non-cash costs of USD 9m
  • Net profit of USD 12m
  • High margins on MASS I node system sales
  • Soft but improving margins in Data Acquisition
  • Large and early delivery of 3rd System sales shipment of MASS I nodes
  • Active Data Acquisition quarter - limited by node capacity and vessel transit/yard stay
  • Healthy performance in Reservoir Monitoring/Source
  • Speeding up integration – operations merged into global business unit
  • Full capacity utilization in Q3 but uncertain project timing in Q4
  • Uncertain project timing increases risk for full-year revenue and EBITDA guidance
  • Continued positive outlook - increasing pipeline for 2020 and beyond

Source: Magseis Fairfield

Financial performance Operational Performance and Execution Outlook

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SLIDE 5

AGENDA

5

Financials, Backlog and Market Outlook Introduction Operations Summary, Outlook and Q&A Appendix

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SLIDE 6

Key financial figures

6

Profit and loss Q2 2019 Q2 2018 YTD 2019 YTD 2018 FY 2018 Revenues 131.6 19.7 251.0 44.3 136.5 Cost of sales 87.2 10.1 175.5 19.8 86.8 EBITDA 25.5 5.2 41.6 15.6 23.0 EBIT 11.4 1.0 8.6 7.6 3.1 Net profit (loss) 11.9

  • 0.5

5.4 5.1

  • 2.8

Financial position Total assets 585 163 527 Total liabilities 244 26 194 Total equity 340 137 334 Equity ratio 58.2 % 84.1 % 63.3 % Cash flow Net cash flow from operating activities 32.1 3.2 30.2

  • 3.0

13.7 Key figures, USD million

  • Depreciation & amortization of USD 14.2m in Q2, down from USD

18.7m in Q1

  • Amortization period for PPA technology assets revised from 5y to 10y

EBITDA to Net Cash Flow from Operations (CFFO) – main items (USDm) Source: Magseis Fairfield

5 10 15 20 25 30 35 40

EBITDA Non-cash costs MASS I node sales Change in Net Working Capital Other adjustments to CFFO, net CFFO

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SLIDE 7

Q2 P&L – Revenue and EBITDA increasing

7 132 26 40 16 92 9 9 9 20 40 60 80 100 120 140

Revenue EBITDA Revenue EBITDA Revenue EBITDA

EBITDA included non-cash costs of ~USD 9.3m, related to sale of existing MASS I node sales

Magseis Fairfield MASS I node sales Other

  • Solid revenue and margins from System sales
  • Successful early delivery of third batch of MASS I nodes in

June

  • Low contribution from Z-node sales/leases in Q2 – building

inventory for deliveries in H2

  • Healthy performance in Reservoir Monitoring/ Source
  • Soft but improving margins in Data Acquisition
  • All available nodes either in transit or in production on

surveys in GoM, Middle East and the North Sea

  • Margins affected by the Artemis Athene transit and yard stay

(USD 2.8m)

  • Recognized loss on receivable after customer settlement on

2018-contract (USD 1.6)

Source: Magseis Fairfield

USDm

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Sale of MASS I nodes and modular handling systems

  • Successful and efficient execution generating

very strong project economics

  • Third batch delivered in June, ahead of

schedule

  • Main part of fourth and final batch delivered

in August

  • Only a limited number of nodes left for shipment in

September

  • Reduced margins on the Q3 deliveries
  • Higher share of new nodes and close-out costs

8

Source: Magseis Fairfield

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Data acquisition set for higher volumes and improved margins in Q3 – uncertain project timing for Q4

  • Higher project margins compared to the first half
  • Less transition/mobilization costs and one-off

items compared to the first half

  • Higher capacity utilization – current crews fully

booked for Q3

  • Uncertain timing of project start-ups for Q4
  • Available capacity of 5 survey months in Q4
  • 3 ongoing addressable tenders/proposals with start in

Q4 for a total 11 survey months

  • Increasing uncertainty puts guidance levels at risk
  • Revenue guidance of USD 500m and EBITDA of USD

100m will depend on Q4 capacity utilization and margins

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Data acquisition crew utilization overview for 2019

Q1 Q2 Q3 Q4

1 2 3 4 5 6 7 8 9 10 11 12

MASS I Crew 1 MASS I Crew 2

Nodes sold

MASS I Crew 3 Z700 Crew 1 & 2 ZXPLR Crew 1 ZXPLR Crew 2

Building inventory of ZXPLR nodes

MASS III Crew 1

Building inventory of MASS III nodes

Source Crews

Storage Storage

Contracted Available Transit/Mobilization

Source: Magseis Fairfield

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SLIDE 10

10

2019 Order backlog

Total backlog of USD 274 million, whereof USD 202 million for execution in 2019

330 388

Q1 revenue 1H revenue

453

  • 9

+9 453

100 200 300 400 500

2019 backlog per Nov 2018 2019 backlog per Q4 report 2019 backlog and revenue per Q1 report Deferral to 2020 New orders/ increased scope 2019 backlog and revenue per Q2 report Source: Magseis Fairfield

202 251

2019 backlog

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SLIDE 11

Continued positive market outlook for 2020 and beyond

  • Continued tightening demand/supply despite volatile
  • il/gas prices
  • Signed LoI for 6 months node lease contract in

Caspian Sea, starting in Q1-20

  • Rapidly increasing number of addressable

tenders/proposals for 2020

  • 2020 pipeline per May: 2 ongoing tenders/proposals

for a total 7 survey months

  • 2020 pipeline today: 10 ongoing tenders/proposals for

a total 35 survey months

  • Significant amount of planned but not yet tendered

activity for 2020 and beyond

  • Regular tenders, larger tender programs, multi-client

activity, potential System sales

  • Interesting prospects in all major oil & gas regions

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Increasing tender activity for 2020

5 10 15 20 25 30 35 40

Number of tenders/proposals Number of survey months Number of tenders/proposals Number of survey months

Active 2020 pipeline per Q1-presentation Active 2020 pipeline per Q2-presentation

Source: Magseis Fairfield

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AGENDA

12

Operations Financials, Backlog and Market Outlook Introduction Summary, Outlook & Q&A Appendix

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ZXPLR Crew 1:

Timely completion of the world’s largest deep water OBS survey – crew booked through April 2020

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  • Innovative configuration with REM Saltire,

Oceaneering ROVs and new high-speed loader (HSL), three source vessels and one support vessel

  • 3,100 square kilometres survey utilizing Magseis

Fairfield’s ZXPLR deep water nodes

  • Challenging environment, with 18 surface
  • bstructions and hundreds of seabed

constructions

  • Source effort and node recovery completed

mid-August

  • Crew moving directly to follow-on deep water

project in Gulf of Mexico where we will operate a low-frequency source technology in addition to traditional airguns

Source: Magseis Fairfield

3,100 km2

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SLIDE 14

Z700 Crew 1&2:

Large Middle East Z700-node survey progressing well

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  • 15,000 Z700 nodes – the largest OBS node fleet ever

deployed on a single project

  • Node-on-a-rope (NOAR) operation running through Q4
  • Baseline survey in preparation for future 4D monitoring

from 2021 and beyond

  • More than 60% source effort complete to date
  • Operated above expected daily averages in Q2,

despite challenging conditions on a very active field

  • Actively managing operations in extreme summer

heat (50°C+)

  • Closely monitoring regional security situation –

not affecting current operations

Source: Magseis Fairfield

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SLIDE 15

MASS I Crew 1:

North Sea Campaign with back-to-back “Nodes-on-the-Dock” survey and Artemis Athene “Nodes-on-Wire” survey

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  • MASS survey successfully completed late July
  • Fully modular containerized node handling

utilizing client’s shoreside facility

  • Deployment of nodes utilizing client’s vessels
  • Artemis Athene project kicked off in July
  • One node handling vessel, one source vessel

and a chase vessel

  • Nodes-on-Wire operation utilizing the Artemis

Athene handling and deployment systems

  • Operations into first half of Q4-19

Source: Magseis Fairfield

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SLIDE 16

Source Crews:

Active period for Reservoir Monitoring/Source

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Crew 1

  • Executed Survey 1 from late April through May on schedule with client

extremely pleased with performance

  • Executed Survey 2 June through to late July and source package performing

well

Crew 2

  • Fast delivery of 19th and 20th surveys in sixth year of reservoir monitoring

program

  • Survey operations completed ahead of schedule

Crew 3

  • System assembly on 5-year reservoir monitoring program completed in

June

  • Mobilization commenced end of in July with first survey immediately after

commissioning of recording system in August

  • Real time data delivery system commissioned

Source: Magseis Fairfield

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SLIDE 17

Integration well under way

Organisation

  • Established one operating organisation

ahead of plan to further accelerate the integration

  • Very good progress on the integration

workstreams – several already concluded

Training

  • All employees moved to a common

training platform to ensure a “one company” culture

Back-office systems

  • Migration of IT systems completed
  • Selected and started the implementation
  • f our new global business system

17

EAGE, London, June 2019 Source: Magseis Fairfield

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SLIDE 18

AGENDA

Summary, Outlook & Q&A Financials, Backlog and Market Outlook Operations Introduction Appendix

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SLIDE 19

Summary & Outlook

  • Successful manufacturing and delivery of the large

MASS I node system sales

  • Good performance in the growing Reservoir

Monitoring/Source area

  • Soft first half in Data Acquisition – volumes and

margins are set to improve

  • Fully booked for Q3 but some timing uncertainty of

projects in Q4

  • Uncertain project timing increases risk for full-year

revenue and EBITDA guidance

  • Confident in the future growth of the OBS market

and our own industry leading market position

  • Large number of tenders, tender programs, multi-client

activity and system sales expected for 2020 and beyond

19

Source: Magseis Fairfield

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SLIDE 20

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The industry leader in Ocean Bottom Seismic (OBS) technology

  • Largest player in a growing USD 1 billion+ annual market
  • Global reach with broad customer base including the top-tier E&Ps
  • Leading market position with 30,000+ node pool and scale advantages
  • Asset light business model offers further scalability
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APPENDIX

21

Income Statement Balance Sheet Cash Flow Statement

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SLIDE 22

22

Income Statement

(unaudited)

Source: Magseis Fairfield Full year Q2 2019 Q2 2018 Q2 2019 Q2 2018 2018 USD 1000' (unaudited) (unaudited) (unaudited) (unaudited) (audited) Total revenue and other income 131 539 19 718 251 041 44 283 136 477 Cost of Sales 87 191 10 114 175 484 19 805 86 764 Research and development costs 833 670 1 473 1 231 3 995 General and administrative costs 17 997 3 741 32 529 7 683 22 705 Depreciation 13 327 4 005 28 125 7 566 19 097 Amortisation 825 191 4 783 382 839 Total operating expenses 120 174 18 721 242 394 36 667 133 400 OPERATING PROFIT / (LOSS) 11 365 997 8 647 7 615 3 077 Financial income 3 295 3 4 354 5 2 628 Financial expenses

  • 1 830
  • 1 314
  • 5 007
  • 1 507
  • 5 058

Net financial items 1 466

  • 1 311
  • 653
  • 1 502
  • 2 430

NET PROFIT / (LOSS) BEFORE TAX 12 831

  • 314

7 994 6 114 647 Income tax expense 963 227 2 605 987 3 468 NET PROFIT / (LOSS) 11 868

  • 540

5 389 5 127

  • 2 821

Earnings per share attributable to the equity holders during the period

  • Basic

0.06

  • 0.01

0.03 0.07

  • 0.04
  • Diluted

0.06

  • 0.01

0.03 0.07

  • 0.04

Other comprehensive income

  • Total comprehensive income / (loss)

11 868

  • 540

5 389 5 127

  • 2 821

EBITDA 25 517 5 193 41 555 15 563 23 013 Quarter Year to date

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SLIDE 23

23

Balance Sheet

(unaudited)

Source: Magseis Fairfield

USD 1000' YTD 2019 YTD 2018 YE 2018 ASSETS (unaudited) (unaudited) (unaudited) Non-current assets Goodwill 93 731 93 731 Property, plant and equipment 149 406 89 498 148 598 Multi-client Library Other intangible assets 75 507 4 951 80 280 Total non-current assets 318 643 94 450 322 609 Current assets Cash and cash equivalents 54 230 36 168 68 110 Trade receivables 121 440 24 890 75 335 Inventories 68 929 2 616 32 538 Other current assets 21 492 5 105 28 718 Total current assets 266 090 68 779 204 701 TOTAL ASSETS 584 733 163 229 527 310 EQUITY AND LIABILITIES Shareholders' equity Share capital 1 167 545 1 166 Share premium 382 148 178 508 382 152 Other equity 4 722 3 213 3 244 Retained earnings

  • 42 479
  • 39 917
  • 47 864

Currency translation reserve

  • 5 124
  • 5 124
  • 5 124

TOTAL EQUITY 340 434 137 225 333 573 LIABILITIES Non-current liabilities Obligations under financial lease 18 494 Other non-current financial liabilities 39 310 12 447 50 846 Total non-current liabilities 57 804 12 447 50 846 Current liabilities Trade payables 54 838 5 900 48 037 Current tax payable 3 540 765 1 855 Current portion of long term loans 21 467 2 334 27 301 Current portion of obligations under financial lease 17 796 205 Other current liabilities 88 855 4 353 65 698 Total current liabilities 186 495 13 557 142 891 TOTAL LIABILITIES 244 300 26 003 193 737 TOTAL EQUITY AND LIABILITIES 584 733 163 229 527 310

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SLIDE 24

24

Cash Flow

(unaudited)

Source: Magseis Fairfield

Full year Q2 2019 Q2 2018 Q2 2019 Q2 2018 2018 USD 1000' (unaudited) (unaudited) (unaudited) (unaudited) (audited) Cash flows from operating activities Profit / (Loss) before tax 12 831

  • 314

7 994 6 114 647 Adjustment for: Income tax and withholding tax paid

  • 1 848
  • 755
  • 2 304
  • 1 090
  • 2 904

Depreciation and amortisation 14 153 4 079 32 908 7 715 19 498 Share based payments expense

  • 1 490

12

  • 1 478
  • 70
  • 40

Interest expense and other financial items 2 433 161 5 007 463 1 523 Interest income

  • 4 068
  • 3
  • 4 354
  • 5
  • 492

Cost of sales of nodes, non cash effect 9 311 15 910 9 221 Working capital adjustments: (Increase) / decrease in current assets 865

  • 200
  • 58 603
  • 15 278
  • 43 033

Increase / (decrease) in current liabilitiees

  • 89

264 35 119

  • 847

29 313 Net cash from operating activities 32 098 3 244 30 199

  • 2 999

13 732 Cash flow used in investing activities Interest received 108 3 394 5 182 Acquisition of equipment

  • 12 638
  • 11 000
  • 17 608
  • 25 853
  • 34 402

Prepaid seimic equipment

  • 1 618
  • 1 753

637 Investment in sudsidaries

  • 163 263

Net cash used in investing activities

  • 14 148
  • 10 997
  • 18 967
  • 25 848
  • 196 845

Cash flows from financing activities Proceeds from loan 27 50 027 Payment of finance lease obligation and loan

  • 12 387
  • 516
  • 21 987
  • 1 453
  • 4 033

Proceeds from issue of share capital 1 5 38 580 183 823 Expenses related to issue of share capital

  • 6
  • 7
  • 1 451
  • 7 597

Interest paid

  • 1 333
  • 161
  • 3 123
  • 463
  • 772

Net cash from financing activities

  • 13 726
  • 677
  • 25 113

35 240 221 447 Net change in cash and cash equivalents 4 224

  • 8 429
  • 13 881

6 392 38 335 Cash and cash equivalents at period start 50 006 44 597 68 110 29 776 29 776 Cash and cash equivalents at period end 54 230 36 168 54 230 36 168 68 110 Quarter Year to date