World Wide Supply AS NOKm 100 share issue Investor presentation 13 - - PowerPoint PPT Presentation
World Wide Supply AS NOKm 100 share issue Investor presentation 13 - - PowerPoint PPT Presentation
World Wide Supply AS NOKm 100 share issue Investor presentation 13 May 2014 Disclaimer This presentation (the Presentation) has been produced and delivered by World Wide Supply AS (the Company) and its contents is the sole
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This presentation (the “Presentation”) has been produced and delivered by World Wide Supply AS (the “Company”) and its contents is the sole responsibility of the
- Company. The Presentation and its contents are strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person. By attending
this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company’s business. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly the Company does not accept any liability whatsoever arising directly or indirectly from the use of this Presentation. This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it
- perates. Forwardlooking statements concern future circumstances and results and other statements that are not historical facts. The forward-looking statements,
contained in this Presentation, including assumptions, opinions and views of the Company are solely opinions and forecasts which are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated development. The Company cannot guarantee that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION. The Presentation has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place. The distribution of the Presentation, as well as any purchase, sale or transfer of securities issued by the Company, may in certain jurisdictions be restricted by law. Persons into whose possessions this Presentation may come are required by the Company to update themselves about and to comply with all applicable laws and regulations in force in any jurisdiction in or from which its invest or receives or possesses this Presentation and must obtain any consent or approval or permission required under the laws and regulations in force in such jurisdiction, and the Company shall not have any responsibility or liability with respect to the these obligations. This Presentation and the information contained herein are not an offer of securities for sale in the United States and are not for publication or distribution to persons in the United States (within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This document is being distributed to, and is directed only at, persons in member states of the European Economic Area (“EEA”) who are “professional investors” within the meaning of part I and II of Annex II of the MIFID directive (directive 2004/39/ec) (“professional investors”). Any person in the EEA who receives this document will be deemed to have represented and agreed that it is a professional investor. In the United Kingdom this document is being distributed only to, and is directed only at, persons who are (i) investment professionals falling within article 19(5) of the financial services and markets act 2000 (financial promotion) order 2005 (as amended) (the “order”), (ii) high net worth entities falling within articles 49(2)(a) to (d) of the order or (iii) any other persons to whom it may be lawfully communicated (all such persons being referred to as “relevant persons”). This document is addressed only to, and directed only at, relevant persons and qualified investors and must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons or (ii) in any member state of the EEA other than the United Kingdom, by persons who are not qualified investors. The content of this Presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult with its own professional advisors for any such matters and advice. The information contained in this Presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for or purchase the securities discussed herein in any jurisdiction. Neither this Presentation nor any part of it shall form the basis of, or be relied upon in connection with any offer, or act as an inducement to enter into any contract or commitment whatsoever. This Presentation speaks as of the date of this presentation. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of the Norwegian courts.
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Disclaimer
- Transaction summary
- World Wide Supply overview
- The vessels
- Financials
- Risk factors
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Agenda
WORLD WIDE SUPPLY
- World Wide Supply was founded 2010 by industrial and financial owners
- Ship management by Remøy Management, in Brazil supported by UOS / Astromaritima
SIX VESSELS, ALL DELIVERED AND WITH CONRACTS
- All six vessels were delivered during 2013 and early 2014
- Two vessels in the North Sea on 1-year contracts with GdF Suez (to April 2015 incl. options)
- Four vessels with 4-year contracts with Petrobras in Brazil: the two first arrived Brazil on 10
May and the final two are enroute and expected to arrive by 21 May. The first two are expected to be on rate with Petrobras by end-May and the final two by mid-June NON-AMORTIZING FLEET LOAN AND 50% OF NET PROFIT AS DIVIDENDS FROM 2016
- Fleet loan USDm 150 @ 7.75% without amortizations
- Refinancing at ~69.5% vs. market value and ~77.5% vs. depreciated book value
- Aim to pay 50% of net profits as dividends from 2016 (for 2015)
- Current contracts yield annualized cash flow of USDm ~11
- Post-money equity valuation USDm ~50
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Summary
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Main terms
Private Placement Timetable and Key Conditions
Please refer to the Terms of Application and Term Sheet for full details on the offering terms
- Private Placement of up to NOK 100 million
- New share issue: up to 11,019,568 new shares
- Issue price of NOK 9.0-10.0 per share
- Number of shares pre-issue: 22,039,000 shares
- Number of shares post issue: up to 33,058,568 shares
- New shares represent [31.0-33.3]% of shares
- Sydvestor AS will subscribe for 6.4% of the shares offered
in the Private Placement, seeking to maintaining its
- wnership of 6.4%
- Allocation criteria: investor quality, timeliness and quality of
- rder
- Investor requirement: (i) Norwegian investors, (ii)
international institutional investors, and (iii) US 144A (QIB’s as defined by Rule 144A)
- Documentation: investor presentation, terms of application
and term sheet
- Manager: Pareto Securities AS
- Application Period: [•] May 2014 @ 09:00 CET – [•] May
2014 @ 18:00 CET
- The Book may be closed earlier or later at the
company’s discretion, however in no event earlier then [•] May 2014 @ 16:00 CET
- Minimum application: NOK equivalent to EUR 100,000
- Notification of allocation: On or about [•] May 2014
- Payment: On or about [•] May 2014
- Delivery: On or about [•] May 2014
- Subject to investor demand, the Company will seek to
have its shares listed on the Oslo Stock Exchange within 12 months
- Use of proceeds: Working capital and general corporate
purpose
- Total yard turnkey contract price including
VTCs of EURm 149.7m, equivalent to USDm 203.5 / NOKm 1,223
- Total capital requirements of NOKm ~1,500
including project costs and working capital
- Total book equity of NOKm 606 post-money
- Ordinary paid in equity of NOKm ~264
- ADS structure equity of NOKm ~243
committed from Damen
- New equity NOKm ~99
- USDm 150 / NOKm ~900 bond
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Sources and uses of funds
Note: Figures based on EURUSD 1.36
Pre-money cash equity NOKm 264 NOK/sh 12.0 USDm 44 New cash equity " 99 " 9.0 " 17 Total cash equity " 363 " 11.0 " 61 ADS equity " 243 " 41 Total equity " 606 " 101 Bond " 900 " 150 Total funds " 1,506 " 251 Yard price vessels NOKm 1,223 USDm 204 OFE " 19 " 3 Transaction costs " 83 " 14 Working capital " 181 " 30 Total use of funds " 1,506 " 251 USD/NOK 6.00 Number of shares post money 33.04 mill
Summary of uses & sources of funds
NOK million NOK per share In USD million
- Transaction summary
- World Wide Supply overview
- The vessels
- Financials
- Risk factors
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Agenda
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World Wide Supply in brief
Description PSV World Pearl
- World Wide Supply AS (WWS) is a dedicated Platform Supply
Vessel (PSV) company
- Fleet of 6 medium-size PSVs built at recognized Damen
Shipyard Group and delivered 2013 / early 2014
- Two vessels on contracts with Gaz de France and four are
about to start 4-year contracts with Petrobras
- Vessel management services provided by Remøy Management
- Brazil vessels operated by UOS / Astromaritima
Fleet overview 10 largest shareholders
Name of shareholder Number of shares % 1 REMØY MANAGEMENT AS 3,000,000 13.6% 2 DØNNA INVEST AS 2,584,000 11.7% 3 LUNDH’S LABRADOREKSPORT AS 2,584,000 11.7% 4 ERVIK & SÆVIK AS 2,500,000 11.3% 5 NORDVESTOR AKTIV AS 1,794,872 8.1% 6 SYDVESTOR AS 1,416,667 6.4% 7 BECKER INVEST AS 999,998 4.5% 8 HAREID ELEKTRISKE AS 987,180 4.5% 9 FRYDENBØ INVESTMENT 916,684 4.2% 10 GJERDE INVEST AS 801,283 3.6%
Jul-18 + 4 yr opt Jul-18 + 4 yr opt Jul-18 + 4 yr opt Jul-18 + 4 yr opt
Company history
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WWS incorporated Performed strategic analyses and developed strategic intent Developed an optimal vessel design Performed the private placement and secure the financing Contracted 6 mid- sized PSVs in November and December 2011 Built the
- rganization
Developed plans for sale and operation Marketing of the vessels 4 x time charters with Petrobras signed on 5 April 2013 Term contracts for 403 days secured with GdF Suez June – December 2013: All 6 vessels delivered
2010 2011 2012 2013
Two first vessels working in the North Sea Four vessels mobilizing to Brazil All vessels on long-term contracts by end
- f June 2014
2014
- Petrobras and GdF contracts give
WWS a stable cash flow “floor”
- 2015 estimates reflect all six vessels
delivered and at 96% utilization
- The two vessels currently working
for GdF Suez assumed to achieve rates of USD 24,000
- Operational net cash flow of USDm
~11.2 in 2015 – no debt amortizations
- P/NAV of 0.45x after new money
Comments
Source: Pareto Securities Corporate Finance estimates
Financial estimates (USD)
10
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Low debt service, modest refinancing risk
Value coverage and debt service capacity LTV considerations (per vessel, USDm)
1) After interest, tax and changes in working capital 2) The two un-contracted vessels at similar economics as the four Petrobras vessels 3) Gross debt less minimum cash covenant / cash retention account last 12 months. Bond assumed refinanced in 2017 at same terms and conditions 4) Assumed constant values throughout the period. Applied vessel value of USD 35.8m per vessel which equals average broker value 5) LTV = Net interest bearing debt / vessel values 1) Midpoint of low-high range. Broker values per 31 December 2013 2) Based on obtained quotes from a group of Norwegian shipyards
6 12 11 12 22 24 23 24 142 142 141 138 215 215 215 215 66% 66% 66% 64% 58 % 60 % 62 % 64 % 66 % 68 % 50 100 150 200 250 2014 2015 2016 2017 LTV (%) USDm CF from operations, 1) EBITDA, 2) Net interest bearing debt, 3) Vessel values, 4) LTV, 5) 39.0 35.5 36.1 35.5 25.0 Newbuilding price Norwegian UT755 LC, 2) Average broker value Seabrokers broker value, 1) Nor Ocean broker value, 1) Debt per vessel
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Contract coverage
Firm Jul-18 + 4 yr opt Firm Jul-18 + 4 yr opt Firm Jul-18 + 4 yr opt Firm Jul-18 + 4 yr opt
13 5 10 15 20 25 30 35 40 45 2H14 2015 2016 2017 2018 USDm Option Contracts 67% 67% 67% 67% 34% 33% 11% 0% 0% 34% 0% 20% 40% 60% 80% 100% 2H14 2015 2016 2017 2018 % Option Contracts
- Contract backlog of USDm ~18.9 firm +
USDm ~6.5 options for 2H14
- USDm 37.7 net for 2015 (gross USDm 40.4)
- Firm contracts represents 67% of available
fleet days for 2H14, 2015 and for 2016
- Including options, 100% for 2H14 and 78%
for 2015
- Strategy: mix of spot, short-term and long-
term contracts
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Contract backlog
14 Knut Herman Gjøvaag – Chairman CEO Frydenbø Group
- Mr. Gjøvaag is the sole owner of all shares in the Frydenbø Group
being engaged in maritime industry, real estate as well as car and boat dealing. He is also the Chairman in one of the major European propulsion providers. Frede Uldbæk Managing Partner Sydvestor AS
- Mr. Uldbæk is an experienced executive and Director as CFO from
Danish and Norwegian maritime industry, ship owning and ship
- peration of deep sea fishing and offshore service vessels and
investment companies. Eldar Eilertsen Chairman Remøy Management AS
- Mr. Eilertsen is an experienced management consultant with a long
career as CEO from major players within the maritime industry in Norway.
Highly experienced group of key persons
14 Mette Lundh Håkestad CEO of Lundhs Labradoreksport AS and Mela Stein AS Manages capital and ownership in companies owned by the Lundh family, and has extensive experience from investing in industrial companies, real estate and shipping. Active on the Board of Directors of a number of companies. Jonny Berfjord Owner and CEO of Dønna Havfiske AS Entrepreneur within the Seafood sector since 1995 with a number
- f related board directorships, including Modolb Sjøset Pelagic,
Lofoten Pelagic and Kap Nord Fond. Rita Sævik Owner and CEO of Ervik and Sævik AS Educated Shipmaster and Sea Captain, as well as BSc in economics and administration. Sits on the Board of Directors of Kings Cross AS and Sintef Fiskeri og Havbruk AS. Jostein Sætrenes - CEO
- Mr. Sætrenes is an experienced executive as CFO and Director
from companies within offshore shipping and finance, and as CEO from ship owning/ship operation and banks. He has also extensive experience as a Director of Boards in shipping companies, ship yards, financing institutions in Norway and abroad. Ottar Jan Mork - CFO
- Mr. Mork has higher education in accounting, auditing, finance and
- tax. He has extensive experience in tax administration and auditing
from major auditing companies and as CFO from companies in the maritime industry as well as from offshore shipping companies.
Senior management Board of directors
Strong operational partner
Remøy Management is WWS’ main industrial investor and will take on the overall operational responsibility for the WWS vessels
- The company has a long and proud history of
- perating specialized vessels back to 1972
- Remøy Management was one of the OSV
pioneers building the North Sea offshore oil activities.
- Remøy Management is the largest operator of
vessels for the Norwegian Coast Guard with a total of 7 vessels
- Management contract in place for each of the 6
WWS newbuilds
- Local sub-contractors to handle operations and
licensing in Brazil
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Group structure and taxes
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World Wide Supply AS (Norway) WWS Shipping AS (Norway) WWS Holding AS (Norway) WWS Ship Holding BV #1 - #2(Netherlands) Ship Owners #1 - #6 (Netherlands) General Partners #1 - #6 (Netherlands)
100% 100% 100% 1% 100%
WWS Operation BV (Netherlands)
100%
Limited Partner (Netherlands)
99%
Corporate structure:
- World Wide Supply AS, WWS Holding AS and WWS
Ship Holding BV #1 - #2 are non-operating holding companies
- Each of the 6 vessels is owned by a Dutch SPV
- WWS Shipping AS is the chartering company in the
group through which all external charters are made
- 1st lien bond with mortgage in each of the vessels and
share pledges / assignments Tax structure summary:
- Accelerated Depreciation Scheme (ADS) set up under
Dutch law
- Allows Damen to write off 85% of the contract price as
tax deduction in 2011 and 2012
- Tax saving injected as equity in the Ship Owners
- Share purchase agreement in place where WWS
acquires the Ship Owner shares from Damen in 1Q2015
- Dutch tax ruling in place
- Transaction summary
- World Wide Supply overview
- The vessels
- Financials
- Risk factors
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Agenda
Wave piercing bow The bow is designed to penetrate the waves . This gives increased operational window, higher transit speed, reduced fuel consumption and improved crew comfort. Extremely slim waterlines in the bow area The wave pattern from the slim bow design is minimized, which reduces fuel consumption. Exhaust gas cleaning scrubbers NOx emissions are regarded as dangerous to the
- atmosphere. The scrubbers reduces NOx emissions
by up to 95%.
Mid-size PSV-design developed especially for World Wide Supply
Damen PSV 3300 CD – Design features
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New superstructure Several incidents has been recorded due to crew fatigue. By introducing a living quarter within the superstructure with strict demands for noise reduction, it improves comfort and safety for crew. Oil recovery/FiFi Prepared and ready for recovery of any oil spills to sea surface within a few hours from scramble, supporting the oil company's strategy of having first line response vessels available. Prepared for FiFi-1 class Tank design Double hull versus oily liquids. I.e. a relatively severe damage to the hull like a ship collision or a grounding is likely to not cause pollution to the environment.
Vessel’s main dimensions: Length over all 80,00 meters Beam moulded 16,20 meters Debt mld. 7,50 meters Cargo deck area 730 sqm. Deadweight (summer) 3500 t. Gross tonnage 3832 GT Power 4648 kW, diesel electric propulsion Speed 13,7 kn. Cabins 16 single berth crew cabins 3 double berth crew cabins The Vessel will be built under supervision and in accordance with the rules and regulations of Lloyd’s Register: Notation: 100A1 Offshore Supply Ship, SG 2.8 (MUD tanks), Oil Recovery, *IWS, EP (I, O, P) , WDL( 5 t/m2 Aft to fr 75) LMC, UMS, DP(AA), NAV1, IBS, CAC 3 Compliance with DNV NAUT-OSV(A) and CLEAN DESIGN Descriptive Note: Green Passport
Source: Damen Shipyards Group
Mid-size PSV-design developed especially for World Wide Supply
Damen PSV 3300 CD – Main characteristics
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Tugs/Workb
- ats
Offshore vessels Ponttons & Barges Dredging & Spcials Cargo vessels Naval & Yachts H.S. Craft & Ferries
- Damen Shipyards Group is a family owned
multinational shipbuilding group based in Holland and founded in 1927
- Has delivered more than 5,000 vessels since 1969
and generally
- One of the largest shipbuilding groups in Europe
- 38 yards world wide
- 7,700 employees
- 120-150 vessels in annual deliveries and over
1,000 repair jobs per year
- Focus on developing unique standardised ship
designs and offer customers well-proven, innovative vessels at competitive prices
- Building a wide range of vessels; tugs/workboats,
- ffshore vessels, high speed craft & ferries,
barges, dredging vessels, cargo vessels, naval vessels and yachts
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Built at recognized Damen Shipyards Group
Overview
- Revenues: EUR 1,500m
- Pre-tax profit: EUR 60m
- Order backlog: EUR 2,500m
- 170 vessels delivered:
Key figures 2013
Source: Damen Shipyards Group
21 Main Contract terms Detailed contract info Delivery window: By end of June 2014 Location: Brazilian Coast Duration: Firm Period: 1460 days Optional Period*: 1460 *To be mutually agreed from both parties where prices and all
- ther conditions to remain unchanged from current contract.
Nominal charter rate: Two vessels: USD 27,500.- / day Two vessels: USD 27,850.- / day Mobilization USD 1,500,000.- / vessel Payment structure USD portion: 70% Reais (R$) portion: 30% Taxes Up to 14.25% tax on Reais (R$) portion Import tax: 3% of vessel value Adjustment of dayrate (in R$) PCR = PCI x [a x (INS / INSo)+ b x (IGP / IGPo)]’ PCR: adjusted dayrate PCI: Initial dayrate INS: National Consumer Price Index (at adjustment) INSo: National Consumer Price Index (at July 2012) IGP: General Price index (at adjustement) IGPo: General Price index (at July 2012) “a”: 0.73 , “b”: 0.27 Brazilian Law Local content: 90% (ninetypercent) Termination Should startup of the contract be delayed for more than 30 days, Petrobras at their sole discretion, may rescind this contract. For each day, or fraction thereof, of Contractors delay in startup, Contractor will pay an amount equivalent to 50% of day rate. The contract may be subject to early termination after 365 days if a Charter Authorization from ANTAQ is not obtained. In such case Petrobras will have the right to receive charter hire until termination date. WWS may terminate the contract if Petrobas fails to make due payments for a period greater that 90 (ninety) days, Petrobras suspend work for a period greater than 120 days. In any scenario for recission, WWS will receive payment of all values that are still outstanding and due for completed work. Force Majeure Neither party should be helt responsible for the performance of their respective obligation, nor for any loss or damages which arises from an Act of God or Force Majeure. Any time lost due to events defined as Acts of God or Force Meujore, and accepted as such by the Petrobras Inspector, will be added to the Contract period.
Petrobras contracts
Source: Pareto Research
PSV spot rates PSVs trading in the spot market
- PSV market surprisingly firm in Jan/Feb, normalizing in March with lower utilization and dayrates
- Six vessels have left the North Sea for West Africa so far, more vessels scheduled to leave the next months
- Norwegian side relatively stronger compared to the UK, Statoil active in securing tonnage
- High tender activity from oil companies
20 40 60 80 52 50 48 46 44 42 40 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2
- No. PSV
2011 2012 2013 2014
Week 5 000 10 000 15 000 20 000 25 000 jan feb mar apr mai jun jul aug sep
- kt
nov des
2011 2012 2013 2014 Current spot
North Sea PSV fixtures (DWT>3,499), GBP'/day
North Sea spot market – the gauge for the international market
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- Transaction summary
- World Wide Supply overview
- The vessels
- Financials
- Risk factors
23
Agenda
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- Net cash flow to equity of USDm ~11
per year – compared to post-money equity valuation of USDm ~50 (based on NOK 9 per share and 33.06 mill shares)
- 4 vessels on fixed contracts with
Petrobras at an average net day rate
- f USD 27,675 per day with opex of
USD ~14,500 per day
- 2 vessels on medium term contracts
in the North Sea at GBP 11,250 currently (for firm period of one well expected until late September or October), with options for 146 days at GBP 13,000, and another 43 days at GBP 14,000. Achieved 100% utilization since December and until
- April. Opex estimated USD ~9,750
per day
- Expected overall utilisation of 96%
- Debt financing is USDm 150 with
7.75% interest and no debt amortizations, maturity May 2017
Strong cash flow from 6 vessels
26.1 11.2 2.7 11.6 0.6 5 10 15 20 25 30 USDm
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Income statement
World Wide Supply 2013 2012 Charter-hire NOKm 20.4
- Other operating revenues
"
- 9.2
Operating revenues " 20.4 9.2 Crew costs NOKm (19.2)
- Operating expenses ships
" (19.7)
- Other operating expenses
" (13.6) (15.3) Operating expenses " (52.4) (15.3) EBITDA NOKm (32.1) (6.1) Depreciations " (7.5)
- EBIT
" (39.6) (6.1) Financial income NOKm 50.1 2.6 Financial expenses " (34.0) (0.9) Net financial income/expense " 16.1 1.7 Pre-tax profit NOKm (23.5) (4.4) Taxes " (6.3) (1.2) Net profit " (29.9) (5.6)
- 2013 results reflecting the start-up of the
company; crew costs and operating expenses starting before the vessels are delivered and operational
- Under IFRS, vessels are depreciated to
50% by 20 years of age
- Financial expenses include refinancing
costs and capital raising costs – refinancing costs depreciated over 3.5 years
- No payable taxes
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Balance sheet (consolidated per year-end 2013)
ASSETS 2013 2012 Deferred tax asset NOKm 0.3 6.6 Ships " 1,234.6
- Investment in subsidiaries
"
- 0.1
Investment in shares " 3.8
- Other long-term assets
"
- 133.4
Total fixed assets " 1,238.6 140.2 Current assets Stocks NOKm 4.2
- Accounts receivables
" 9.4 0.1 Accrued unpaid revenues "
- 9.2
Other short-term receivables " 3.7 8.6 Cash & bank deposits " 74.1 4.8 Total current assets " 91.4 22.6 TOTAL ASSETS NOKm 1,330.0 162.7
EQUITY & LIABILITIES 2013 2012 Share capital NOKm 2.2 1.4 Share premium reserve " 221.8 133.8 Other equity " 194.6
- Loss brought forw ard
"
- (1.1)
Total equity " 418.6 134.1 Liabilities Pension liabilities NOKm 0.1
- Bond
" 879.9
- Total long-term liabilities
" 880.0
- Trade creditors
NOKm 19.1 2.2 Public duties payable " 2.8
- Other short-term liabilities
" 9.5 26.4 Total short-term liabilities " 31.4 28.6 TOTAL EQUITY & LIABILITIES NOKm 1,330.0 162.7
* Qualified investments in order to qualify for tonnage tax ** Goods in stock *** Consolidated equity, including ADS (Accelerated Depreciations Scheme) included as “Other equity” **** Bond liabilities decreased by refinancing costs (to be depreciated over 3.5 year loan term)
Book equity per share NOK 19 per share (including ADS) per 31 December 2013 Value adjusted equity per share of NOK 22.50 per share per 31 December 2013
* ** *** ****
- Transaction summary
- World Wide Supply overview
- The vessels
- Financials
- Risk factors
27
Agenda
Market risks The Company's revenues are mainly determined by charter rates and prices fixed in an open and competitive market that historically have experienced volatility and supply/demand imbalances outside the Company’s control. The Company cannot predict the future level of demand for its services or future conditions in the industries it serves. Unfavorable market developments could have a negative impact on the Company's revenues, profitability, cash flows and financial condition. Competition The market for the Company's products and services is competitive. Although the Company believes that its vessels are currently competitive with regard to standard and attractiveness in the market, no assurance can be given that the Company will be able to maintain its competitive position in relation to current and/or future competitors. The Company may face competition from other companies within the offshore industry, and many of these companies may have greater resources than the Company itself. The failure of the Company to maintain competitive offering of equipment and services could have a material adverse effect on the Company’s business, operating results or financial condition. Employment The Company has recruited and intends to continue to recruit skilled professionals with appropriate experience and
- expertise. The successful development and performance of its business depends on its ability to attract and retain such
personnel, in respect of which no assurance can be given. Political and Regulatory risks Changes in the political, legislative, fiscal and/or regulatory framework, as well as potential new regulatory framework, governing the activities of the Company, the oil companies, oil service companies, or service contractors on which the Company depend, could have material impact on the Company's business, the markets in which it operates, and the financial condition of the Group.
Risk factors (1/3)
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Environmental risks The Company’s operations are subject to numerous national environmental, health and safety laws, international conventions and frameworks, (together, ‘‘Regulations’’), including, inter alia, those controlling the discharge of materials into the environment, requiring removal and cleanup of environmental contamination, establishing certification, licensing, health and safety, taxes, labor and training standards, operation of the vessels or otherwise relating to the protection of human health and the environment. The amendment or modification of existing Regulations or the adoption of new Regulations curtailing or further regulating the Company’s business could have a material adverse effect on the Company's operating results and financial condition. The Company cannot predict the extent to which future earnings or capital expenditures may be affected by compliance with such new Regulations. Customers The Company is, to a certain degree, dependent on a limited number of key customers. The ability of the Company’s customers to meet their obligations towards the Company is affected by the customers’ financial and liquidity position. If a key customer declares bankruptcy, insolvency or files for a similar protection under the customer’s jurisdiction, the Company may not be able to enforce payment of the customer’s obligations and incur loss on such claims. The bankruptcy, insolvency or similar protection of a customer may also lead to the loss of expected turnover for the Company from the customer, which may have a material adverse effect on revenues, profitability, cash flows and the financial condition of the Company.
Risk factors (2/3)
29
Ability to service debt and other obligations The financial leverage of the Company may have adverse consequences, including the need to manage the Company’s businesses in a way to service its debt and other financial obligations. Should the financing of the Company not be sufficient to meet its obligations, the Company may be forced to; (i) reduce or delay capital expenditures; (ii) sell assets or businesses at unanticipated times and/or at unfavorable prices or other terms; (iii) seek additional equity capital; or (iv) restructure or refinance its debt. There can be no assurance that such measures would be successful or adequate to meet debt and other
- bligations as they fall due, or would not result in the Company being placed in a less competitive position.
Financial position In the long term, the Company may be unable to obtain sufficient funds to grow and develop its business, and any additional financing may be on terms adverse to the interests of the bondholders. If the Company does not obtain additional financing when required, the Company may be unable to fund its operations, expansion, successfully promote its business or take advantage of business or acquisition opportunities. Furthermore, no assurance can be given that the terms will be favorable and acceptable to the Company. Although the Company considers the its financial situation as satisfactory, new projects might lead to a need for capital through public or private placements in the form of borrowings or issuance of new shares. No assurances can be given that such additional capital will be available, or if it will be available at acceptable terms. Additional capital requirements The Company may require additional capital in the future due to unforeseen liabilities or in order for it to take advantage of
- pportunities for acquisitions, joint ventures or other business opportunities that may be presented to it. There can be no
assurance that the Company will be able to obtain necessary financing in a timely manner on acceptable terms.
Risk factors (3/3)
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