HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY
1
Q2 2020 – PRESENTATION OF FINANCIAL RESULTS
20 August 2020
Q2 2020 PRESENTATION OF FINANCIAL RESULTS 20 August 2020 1 - - PowerPoint PPT Presentation
HEGH LNG A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY Q2 2020 PRESENTATION OF FINANCIAL RESULTS 20 August 2020 1 Forward looking statements This presentation contains forward-looking statements which reflects managements current
HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY
1
20 August 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.
5 Q&A 4 Summary 3 Market update 2 Q2 2020 Financials
3
1 Q2 2020 Review and outlook
4
Highlights
facility
5
− Full or partial crew changes now conducted on all vessels
− Revenues collected in accordance with contractual terms − All assets crewed in accordance with relevant safety requirements
− Some actually pushed forward by the low price of LNG − Some being slowed down due to uncertainties and logistic challenges
6
− USD 6-8 million in reduced Opex and SG&A − USD 3 million in dry docking off-hire to be postponed to 2021 − All savings are estimated compared with original plans and budget for 2020
− USD 3.5 million decline in SG&A q-o-q − Two thirds a result of implemented cost-saving plan, with some aid from Covid-19 related savings with virtually no travel expenses incurred in Q2 − About one third is explained by seasonality due to holiday pay − Favourable FX development for non-USD SG&A
7
10 20 30 40 50 60 70 80 90
2q17 3q17 4q17 1q18 2q18 3q18 4q18 1q19 2q19 3q19 4q19 1q20 2q20
USD million
EBITDA
EBITDA Recognition of future revenue
20 40 60 80 100 120 140
2q17 3q17 4q17 1q18 2q18 3q18 4q18 1q19 2q19 3q19 4q19 1q20 2q20
USD million
Total income
Total income Recognition of future revenue
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
2020 2022 2021 2023
FSRU and/or LNGC intermediate charter
2036 2038 2024 2026 2028 2030 2032 2033 2035 2037 2034 2027 2029 2031 2025
8
** 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
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2020 2021 2022
Charter coverage1
Charter coverage Charter coverage incl. Options
executed by charterers (66%)
short-term FSRU contracts and/or interim LNGC contracts before long-term FSRU contracts kick-in
9
1: On 100% basis for 12 vessels, four units are jointly owned
10
Selected as FSRU provider
FSRU project #3
Bilateral projects
− Ongoing negotiations − Potential FID 2020 − Potential start-up 2021
− Proposal receives interest − Constructive dialogue with authorities
Ongoing tenders
2021
FSRU project #4 FSRU project #5 FSRU project #6
99,9 % 99,8 % 99,8 % 99,5 % 99,8 %
2016 2017 2018 2019 2020 YTD
Technical availability
11
− Coalition’s objective is to launch first zero-emission vessel by 2030
− HLNG’s aim is to explore and develop new business
particular hydrogen and ammonia
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 Q&A 4 Summary 3 Market update 2 Q2 2020 Financials
12
1 Q2 2020 Review and outlook
13
USD million Q2 2020 Q1 2020 Total income 82.3 86.7 Charterhire and other expenses
Operating expenses
Administrative and BD expenses
EBITDA 57.7 59.6 Depreciation
EBIT 29.6 31.4 Net interest expense
Net other financials
Profit before taxes 4.1 0.0 Corporate income tax
Net result for the period 2.9
USD million 30.06.2020 31.03.2020 Investments in vessels and other assets 2 247 2 273 Other 146 157 Free cash 152 120 Total assets 2 545 2 551 Equity attributable to the parent 300 309 Non-controlling interests 298 294 Total equity 597 603 Interest-bearing debt 1 736 1 714 Other 212 234 Total equity and liabilities 2 545 2 551 NIBD 1 560 1 570 Adjusted equity 780 789 Adjusted equity ratio 30 % 31 %
14
Book equity ratio of 30%1 No material change to the financial position quarter-on-quarter Net interest-bearing debt of USD 1 560 million
1: Adjusted for mark-to-market of hedges
USD million Q2 2020 Q1 2020 Net CF from operating activities 59.6 51.0
6.9
Net CF from investing activities
Net CF from financing activities
105.0 72.5
15.3
Net change in cash and cash eq. 31.8
Current cash and cash eq., start 120.1 187.0 Current cash and cash eq., end 151.9 120.1
15
USD 45 million in new debt from upsizing of Independence facility USD 60 million in new debt from RCF Remaining USD 65 million of HLNG 02 bond repaid Partial reversal of cash collateral posted in Q1
16
1: Consolidated debt as of 30 June 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 30 June 2020 and assumed refinanced upon maturity
100 200 300 400 500 600 2020 2021 2022 2023 2024 2025 2026 USD million
Debt repayment schedule1
Amortisation IFRS 16 Leases Balloons Bonds HLNG 02 HLNG 03 HLNG 04
USD 152 million in unrestricted cash end Q2 Cash and capital commitments No material capital commitments 6.7x net debt to trailing 12-month EBITDA 30% adjusted book equity ratio Balance sheet metrics
5 Q&A 4 Summary 3 Market update 2 Q2 2020 Financials
17
1 Q2 2020 Review and outlook
18
Europe continues to be the main growth market Global LNG trade up 6.5% y-o-y in H1 2020 Chinese LNG import growth bounced back in Q2 2020 with 20% y-o-y
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
Source: IHS Markit. The use of this content was authorized in advance. Any further use or redistribution of this content is strictly prohibited without written permission by IHS Markit
19
LNG demand growth expected to return from 2021 2020 expected demand growth revised due to Covid-19 Growth led by China and emerging markets in South/Southeast Asia
Source: IHS Markit. The use of this content was authorized in advance. Any further use or redistribution of this content is strictly prohibited without written permission by IHS Markit
11,9 4,0 4,6 4,2 10,9
300 320 340 360 380 400 420 440 2019 2020 2021 2022 2023 2024
Million tonnes
Impact of H1 2020 market shock on near-term LNG demand
Reduction Pre-COVID LNG outlook COVID outlook: July 2020
Note: Outlook from July 2020, Pre-Covid outlook from February 2020
20
2 4 6 8 10 12 14 16 18
Fuel price comparison, LNG vs liquids and coal (USD / MMBtu)
MGO, Global 20 ports average (USD/MMBtu) HFO / IFO380, Global 20 ports average (USD/MMBtu) LNG Platts Japan Korea Marker (USD/MMBtu) LNG Platts Mediterranean (USD/MMBtu) LNG Platts North West Europe (USD/MMBtu) HH Spot Price (USD/MMBtu) Coal delivered North West Europe, USD/MMBtu
Sources: S&P Global Platts, US Energy Information Administration, Ship&Bunker
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
21
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
4 purpose built FSRUs on order 37 FSRUs on water
KARMOL
4 conversions on order
El Salvador
OLT VPower
5 Q&A 4 Summary 3 Market update 2 Q2 2020 Financials
22
1 Q2 2020 Review and outlook
23
EBITDA of 57.7 million and net profit of 2.9 million for Q2 2020 Stable operations – no material impact from Covid-19 Cost-saving plan progressing in accordance with schedule LNG demand surprisingly resilient with demand up 6.5% in H1 2020
5 Q&A 4 Summary 3 Market update 2 Q2 2020 Financials
24
1 Q2 2020 Review and outlook
25
20 August 2020 - 09:00 CET Call-in details: Norway +47 2100 2610 United Kingdom +44 (0) 330 336 9125 United States +1 323 994 2093 Participant passcode: 4080313 Webcast: https://channel.royalcast.com/webcast/hegnarmedia/20200820_5/