HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY
1
Q1 2020 – PRESENTATION OF FINANCIAL RESULTS
28 May 2020
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
HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY
1
28 May 2020
2
This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about Höegh LNG’s
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.
3
continued operations
market uncertainties
5 Summary 4 Financials 3 Market update 2 Company update
4
1 Highlights
5
Highlights
Subsequent events
Terminal
facility
savings for 2020
6
− 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
− 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
− Improves cash flow with USD 1.9 million per quarter from and including Q2 2020
5 Summary 4 Financials 3 Market update 2 Company update
7
1 Highlights
8
Selected as FSRU provider
FSRU project #3
Bilateral projects
− Ongoing negotiations − Potential FID 2020 − Potential start-up 2021
− Applied for LNG import licence − Fast-track solution − Start-up 2021
Ongoing tenders
import permit
end 2020
FSRU project #4 FSRU project #5 FSRU project #6 FSRU project #7
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
9
** 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
10
sustainability report– available at www.hoeghlng.com
− revised in line with stakeholder preferences − progression will be reported in the annual report for 2020
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
5 Summary 4 Financials 3 Market update 2 Company update
11
1 Highlights
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
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
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
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
14
1: Including purpose built FSRUs and conversions, barges excluded
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
5 Summary 4 Financials 3 Market update 2 Company update
15
1 Highlights
USD million Q1 2020 Q4 2019 Total income 86.7 94.2 Charterhire and other expenses
0.0 Operating expenses
Administrative and BD expenses
EBITDA 59.6 59.8 Depreciation
Impairment 0.0
EBIT 31.4 30.2 Net interest expense
Net other financials
0.0 Profit before taxes 0.0 5.1 Corporate income tax
Net result for the period
4.0
16
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 %
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
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
21.8 Net CF from investing activities
Net CF from financing activities
72.5 0.0
0.0
2.1 Net change in cash and cash eq.
16.8 Current cash and cash eq., start 187.0 170.2 Current cash and cash eq., end 120.1 187.0
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
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
5 Summary 4 Financials 3 Market update 2 Company update
20
1 Highlights
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
22
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/