Q1 2020 PRESENTATION OF FINANCIAL RESULTS 28 May 2020 1 Forward - - PowerPoint PPT Presentation

q1 2020 presentation of financial results
SMART_READER_LITE
LIVE PREVIEW

Q1 2020 PRESENTATION OF FINANCIAL RESULTS 28 May 2020 1 Forward - - PowerPoint PPT Presentation

HEGH LNG A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY Q1 2020 PRESENTATION OF FINANCIAL RESULTS 28 May 2020 1 Forward looking statements This presentation contains forward-looking statements which reflects managements current


slide-1
SLIDE 1

HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY

1

Q1 2020 – PRESENTATION OF FINANCIAL RESULTS

28 May 2020

slide-2
SLIDE 2

Forward looking statements

2

This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about Höegh LNG’s

  • perations. All statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are

forward-looking statements. Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Höegh LNG undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changes in LNG transportation and regasification market trends; changes in the supply and demand for LNG; changes in trading patterns; changes in applicable maintenance and regulatory standards; political events affecting production and consumption of LNG and Höegh LNG’s ability to operate and control its vessels; change in the financial stability of clients of the Company; Höegh LNG’s ability to win upcoming tenders and securing employment for the FSRUs on order; changes in Höegh LNG’s ability to convert LNG carriers to FSRUs including the cost and time of completing such conversions; changes in Höegh LNG’s ability to complete and deliver projects awarded; changes to the Company’s cost base; changes in the availability of vessels to purchase; failure by yards to comply with delivery schedules; changes to vessels’ useful lives; changes in the ability of Höegh LNG to obtain additional financing, including the impact from changes in financial markets; changes in the ability to achieve commercial success for the projects being developed by the Company; changes in applicable regulations and laws; and unpredictable or unknown factors herein also could have material adverse effects on forward-looking statements.

slide-3
SLIDE 3

Covid-19 update

3

  • Mitigating action plan in place since early February to ensure health, safety and

continued operations

  • No Höegh LNG employees infected by the virus
  • Limited operational and no contractual impact on Höegh LNG so far
  • All assets operating in accordance with plans and charters
  • Dividend suspension and cost savings plan implemented to face continued

market uncertainties

slide-4
SLIDE 4

5 Summary 4 Financials 3 Market update 2 Company update

Agenda

4

1 Highlights

slide-5
SLIDE 5

Highlights for the first quarter of 2020

5

Highlights

  • EBITDA of USD 59.6 million, net loss of USD 1 million
  • Dividend of USD 0.025 per share paid in the first quarter of 2020
  • Contract coverage for 2020 increased to close to 100%
  • Completed revolving credit facility for up to USD 80 million
  • Completed new senior unsecured bond issue of NOK 650 million

Subsequent events

  • Selected preferred bidder for two new FSRU projects in Latin America
  • AIE received approval for increasing the import capacity through the Port Kembla Gas

Terminal

  • Höegh LNG and Total reached a final binding agreement to settle boil-off dispute
  • Completed the amendment, extension and USD 45 million upsizing of Independence’s debt

facility

  • Suspension of dividends and cost savings plan implemented targeting USD 9-11 million in

savings for 2020

slide-6
SLIDE 6

Cost savings plan implemented

6

  • USD 6-8 million in cost savings

− Reduction in Opex for the fleet − Suspended bonus scheme for executive management and onshore personnel for 2020 − Reduction of personnel cost, external services and travel

  • USD 3 million in dry docking off-hire postponed

− Scheduled dry-docking/class renewal of one vessel postponed from second half 2020 to Q1 2021 gives reduced off-hire in 2020 with USD 2.6 million with positive impact on EBITDA − Planned investment in various equipment of USD 0.4 million postponed to 2021. Reduces capital expenditures in 2020, no impact on EBITDA

  • Quarterly dividend from Höegh LNG Holdings Ltd suspended

− Improves cash flow with USD 1.9 million per quarter from and including Q2 2020

  • All savings are estimated compared with original plans for 2020
slide-7
SLIDE 7

5 Summary 4 Financials 3 Market update 2 Company update

Agenda

7

1 Highlights

slide-8
SLIDE 8

Good commercial progress and growing project pipeline

8

Selected as FSRU provider

FSRU project #3

Bilateral projects

  • Atlantic basin

− Ongoing negotiations − Potential FID 2020 − Potential start-up 2021

  • Cyprus

− Applied for LNG import licence − Fast-track solution − Start-up 2021

Ongoing tenders

  • Approval of modification to

import permit

  • HLNG exclusivity
  • On track for EES approval at

end 2020

  • TCP signed

FSRU project #4 FSRU project #5 FSRU project #6 FSRU project #7

  • Indian subcontinent
  • FID targeted in 2020
  • Latin America
  • HLNG shortlisted
  • FID targeted in 2020
  • Latin America
  • HLNG preferred bidder
  • Start-up 2021-2022
  • Latin America
  • HLNG preferred bidder
  • Start-up 2023
  • Indian subcontinent
  • HLNG exclusivity
slide-9
SLIDE 9

Built EBITDA Charterer USDm/yr Höegh LNG Holdings

Arctic Princess* 2006 19** Equinor Arctic Lady* 2006 19** Total Independence 2014 47 KN Höegh Giant 2017 Naturgy Höegh Esperanza 2018 CNOOC / AGL Höegh Gannet 2018 LNGC Höegh Galleon 2019 Cheniere / AIE Höegh Gallant (TC in) 2014 LNGC Höegh LNG Partners Neptune 2009 33** Total Cape Ann 2010 33** Total PGN FSRU Lampung 2014 40 PGN Höegh Gallant 2014 HLNG Höegh Grace*** 2016 42 SPEC

Long-term contract Extension option Under construction

2036 2038 2024 2026 2028 2030 2032 2033 2035 2037 2034 2027 2029 2031 2025 2020 2022 2021 2023

FSRU and/or LNGC intermediate charter

Close to 100% contract coverage for 2020

9

  • LNG carriers

** 100% basis, units are jointly owned

AGL - Conditional on FID AIE - Conditional on FID

*** The initial term of the charter is 20 years. However, each party has an unconditional option to cancel the charter after 10 and 15 years without penalty. However, if SPEC waives its right to terminate in year 10 within a certain deadline, Höegh LNG Partners LP will not be able to exercise its right to terminate in year 10.

Lease back period from HMLP expires mid-2025

slide-10
SLIDE 10

Sustainable, safe and reliable operations

10

  • 2019 annual report released, including

sustainability report– available at www.hoeghlng.com

  • Materiality assessment conducted in 2019
  • New sustainability targets for 2020

− revised in line with stakeholder preferences − progression will be reported in the annual report for 2020

  • Extended sustainability reporting aligned with NSA

recommendations in addition to GRI

99,9 % 99,8 % 99,8 % 99,5 % 100,0 %

2016 2017 2018 2019 2020 YTD

Technical availability

0,00 0,38 0,00 0,31 0,00

2016 2017 2018 2019 2020 YTD

Lost time injury frequency1

1: Calculated per million exposure hours for sea going personnel only

slide-11
SLIDE 11

5 Summary 4 Financials 3 Market update 2 Company update

Agenda

11

1 Highlights

slide-12
SLIDE 12

15 20 25 30 35 40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Million tonnes

Global monthly LNG trade

2015 2016 2017 2018 2019 2020

13% growth in global LNG trade in Q1 2020

12

Source: IHS Markit

Europe continues to be the main growth market Global LNG trade up 13% y-o-y in Q1 2020 China impacted by Covid-19 in Q1, India and South Korea main growth markets in Asia

slide-13
SLIDE 13

Despite Covid-19 the LNG market continues to grow

13

350 360 370 380 390 400 410 420 430 440 2019 2020 2021 2022 2023 2024

Global LNG supply: Impact of COVID-19 and oil price drop

Southeast Asia Other Pacific Middle East Atlantic Africa United States Other Atlantic Pre-COVID outlook COVID outlook: 14 Apr 2020

Million tonnes

Source: IHS Markit Note: Outlook from 14 April 2020, Pre-Covid outlook from January 2020

14,4 8,4 7,2 6,7 7,4

350 360 370 380 390 400 410 420 430 440 2019 2020 2021 2022 2023 2024

Global LNG demand: Impact of COVID-19

Demand reduction Pre-COVID LNG outlook COVID outlook: 14 Apr 2020

Million tonnes

slide-14
SLIDE 14

2 4 6 8 10 12 Höegh LNG Excelerate Golar LNG BW LNG Other Captive

Units

FSRU fleet1 and orderbook2 – by owner

Conv FSRU NB FSRU NB order Conv order

35 FSRUs on the water – 9 units in orderbook

14

1: Including purpose built FSRUs and conversions, barges excluded

  • 2. Orderbook defined as confirmed orders, excluding LOIs, options and conversions not firmed up

Source: publicly available company information, Höegh LNG

Botas MOL Gazprom Kol / Kal SWAN Java-1 Maran Dynagas Botas Dynagas

6 purpose built FSRUs on order 35 FSRUs on water

KARMOL

3 conversions on order

El Salvador

OLT

slide-15
SLIDE 15

5 Summary 4 Financials 3 Market update 2 Company update

Agenda

15

1 Highlights

slide-16
SLIDE 16

USD million Q1 2020 Q4 2019 Total income 86.7 94.2 Charterhire and other expenses

  • 0.5

0.0 Operating expenses

  • 17.4
  • 21.2

Administrative and BD expenses

  • 9.3
  • 13.2

EBITDA 59.6 59.8 Depreciation

  • 28.1
  • 28.1

Impairment 0.0

  • 1.6

EBIT 31.4 30.2 Net interest expense

  • 25.4
  • 25.1

Net other financials

  • 6.1

0.0 Profit before taxes 0.0 5.1 Corporate income tax

  • 1.0
  • 1.1

Net result for the period

  • 1.0

4.0

Income statement for the quarter ended 31 March 2020

16

slide-17
SLIDE 17

USD million 31.03.2020 31.12.2019 Investments in vessels and other assets 2 273 2 300 Other 151 107 Cash and short-term restricted cash 126 195 Total assets 2 551 2 602 Equity attributable to the parent 309 396 Non-controlling interests 294 300 Total equity 603 696 Interest-bearing debt 1 714 1 779 Other 234 127 Total equity and liabilities 2 551 2 602 NIBD 1 570 1 566 Adjusted equity 789 801 Adjusted equity ratio 31 % 30 %

Financial position at 31 March 2020

17

Book equity ratio of 31%1 No material change to the financial position quarter-on-quarter Net interest-bearing debt of USD 1 570 million No material remaining capex commitments

1: Adjusted for mark-to-market of hedges

slide-18
SLIDE 18

Cash flow statement for the quarter ended 31 March 2020

18

Issued new bonds in January 2020 One-off working capital effect in Q4 2019 not reoccurring in Q1 2020 Buy backs of USD 65 million of HLNG 02 bond Significant increase in cash collateral in Q1

1: Adjusted for mark-to-market of hedges

USD million Q1 2020 Q4 2019 Net CF from operating activities 51.0 77.7

  • f w hich w orking capital adjustments
  • 0.1

21.8 Net CF from investing activities

  • 2.4
  • 2.6

Net CF from financing activities

  • 115.5
  • 58.3
  • f w hich new debt

72.5 0.0

  • f w hich buy-back of bonds (HLNG 02)
  • 65.0

0.0

  • f w hich debt ammortisation and interest paid
  • 48.4
  • 47.4
  • f w hich change in restricted cash and cash collateral
  • 52.1

2.1 Net change in cash and cash eq.

  • 66.9

16.8 Current cash and cash eq., start 187.0 170.2 Current cash and cash eq., end 120.1 187.0

slide-19
SLIDE 19

Revolving credit facility of up to USD 80 million completed in Q1 (undrawn) Refinancing activities: New bond loan of NOK 650 million completed in Q1

100 200 300 400 500 600 2020 2021 2022 2023 2024 2025 2026 USD million

Debt repayment schedule1

Amortisation IFRS 16 Leases Balloons Bonds

Refinancing of 2020 debt maturities completed

19

1: Consolidated debt as of 31 March 2020 with the following assumptions and adjustments: All balloons assumed refinanced in full, extending current amortisation profiles | HMLP’s RCF is included with the amount drawn at 31 March 2020 and assumed refinanced upon maturity | HLNG’s RCF is assumed drawn by USDm 60 to refinance part of HLNG02 and included with the same amount and refinanced upon maturity

HLNG 02 HLNG 03 HLNG 04

Amendment, extension and USD 45 million upsizing of Independence facility completed in April

slide-20
SLIDE 20

5 Summary 4 Financials 3 Market update 2 Company update

Agenda

20

1 Highlights

slide-21
SLIDE 21

Summary

21

EBITDA of 59.6 million and net loss of 1 million for Q1 2020 Preferred bidder for two new FSRU projects Refinancing activities for 2020 completed Limited operational and no contractual impact of Covid-19 to date

slide-22
SLIDE 22

22

Q&A session

28 May 2020 - 09:00 CET Call-in details: Norway +47 2195 6342 United Kingdom +44 (0)203 769 6819 United States +1 646 787 0157 Participant passcode: 404874 Webcast: https://channel.royalcast.com/webcast/hegnarmedia/20200528_2/