HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY
Transcript of HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY
HÖEGH LNG – A FULLY INTEGRATED LNG INFRASTRUCTURE COMPANY
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Q3 2020 – PRESENTATION OF FINANCIAL RESULTS19 November 2020
Forward looking statements
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This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about Höegh LNG’s
operations. 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.
5 Q&A
4 Summary
3 Market update
2 Q3 2020 Financials
Agenda
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1 Q3 2020 Review and outlook
Highlights for the third quarter of 2020
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Highlights
EBITDA of USD 53 million
Net loss of USD 2.6 million
Stable operations despite challenging circumstances created by Covid-19
Zero LTIs and 99.9% technical availability year to date
Subsequent events
Höegh LNG shortlisted for First Gen Corp’s FSRU terminal in the Philippines
AIE has signed a lease for up to 25 years with NSW Ports for the Port Kembla Gas Terminal
Tap issue in HLNG 04 and partial buyback of HLNG 03
Covid-19 update
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Ensuring the health and safety of personnel remains the group’s highest priority
Limited operational and no contractual impact on Höegh LNG so far− Full or partial crew changes conducted on all vessels
All assets operating in accordance with their contracts− Revenues collected in accordance with contractual terms
− All assets crewed in accordance with relevant safety requirements
Some business development projects are affected by the pandemic− New projects emerging owing to the competitive LNG price
− Majority of the company’s established project pipeline are keeping original schedules
Financial performance
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Built EBITDA ChartererUSDm/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 Trafigura
Höegh Galleon 2019 Cheniere / AIE
Höegh Gallant (TC in) 2014 Mitsui
Höegh LNG PartnersNeptune 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
2036 20382024 2026 2028 2030 2032 2033 2035 203720342027 2029 203120252020 20222021 2023
FSRU and/or LNGC intermediate charter
Fleet and contract overview
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• 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
Project pipeline
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Selected as FSRU provider
FSRU project
#3
Bilateral projects
Atlantic basin− Existing LNG import terminal
− Ongoing negotiations
− Contract award expected in 2020
Cyprus− Use of existing shoreside
infrastructure
− Assessing market and necessary approvals
Ongoing tenders
Squadron Energy sole owner Signed lease with NSW Ports In final TCP negotiations Planned start-up: H2 2022
EES approval expected H1 2021
TCP signed (conditional) Planned start-up: Q3 2022
FSRU project
#4
FSRU project
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Indian subcontinent FID targeted in Q1 2021 Planned start-up: Q3 2022
Latin America HLNG shortlisted Selection of FSRU provider
expected in 2020 FID targeted Q1 2021 Planned start-up: Q1 2022
Indian subcontinent FID targeted in Q1 2021 HLNG exclusivity Planned start-up: Q3 2022
The Philippines In final tender round JCA with Tokyo Gas PCERM in place Planned start-up Q2 2022
HSEQ
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99,9 % 99,8 % 99,8 % 99,5 %99,9 %
2016 2017 2018 2019 2020 YTD
Technical availability
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Lost time injury frequency1
1: Calculated per million exposure hours for sea going personnel only
Avenir LNG – steady progress
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First vessel, “Avenir Advantage” commenced three-year TCP with Petronas− Delivered from yard in October 2020
First LNG bunkering job completed in November 2020− Proof of concept for dual service
Second vessel, “Avenir Accolade” currently on sea trials− Three-year TCP with Hygo Energy Transition
Strong development pipeline for new import terminals in addition to charter demand for the 4 newbuilds under construction, all for delivery in 2021
Higas import terminal in Sardinia expected to start operations in January 2021
Avenir Advantage on first LNG bunkering job
The energy transition creates new business opportunities
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HLNG is exploring the opportunities for using its existing FSRUs for storage and delivery of ammonia and hydrogen− Grant received from Innovation Norway, partially funding
HLNG’s ongoing work on developing floating solutions in the supply chain for carbon-free fuels
− Also working on solutions for carbon capture and storage, and CO2 transportation
Significant upward revisions in future hydrogen demand− From 2019 to 2020 DNV GL increased 2050 demand for
hydrogen as an energy carrier from 7EJ/year to 24 EJ/year
Strong synergies with the operation of floating LNG infrastructure and the distribution of hydrogen through existing natural gas pipelines
Source: DNV GL “Energy Transition Outlook 2020”
1 EJ = ~1 tcf = ~20 million tonnes LNG
5 Q&A
4 Summary
3 Market update
2 Q3 2020 Financials
Agenda
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1 Q3 2020 Review and outlook
USD million Q3 2020 Q2 2020
Total income 81.8 82.3
Charterhire and other expenses -0.6 -1.2Operating expenses -17.6 -17.5Administrative and BD expenses -10.6 -5.8
EBITDA 53.0 57.7
Depreciation -28.1 -28.1
EBIT 24.9 29.6
Net interest expense -24.1 -25.4Net other f inancials -1.6 -0.1
Profit before taxes -0.8 4.1
Corporate income tax -1.8 -1.2
Net result for the period -2.6 2.9
Income statement for the quarter ended 30 September 2020
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USD million 30.09.2020 30.06.2020
Investments in vessels and other assets 2 220 2 247Other 139 146Free cash 142 152
Total assets 2 501 2 545
Equity attributable to the parent 294 300Non-controlling interests 302 298
Total equity 596 597
Interest-bearing debt 1 710 1 736Other 195 212
Total equity and liabilities 2 501 2 545
NIBD 1 537 1 560Adjusted equity 767 780Adjusted equity ratio 30 % 30 %
Financial position at 30 September 2020
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Book equity ratio of 30%1
No material change to the financial position quarter-on-quarter
Net interest-bearing debt of USD 1 537 million
1: Adjusted for mark-to-market of hedges
USD million Q3 2020 Q2 2020
Net CF from operating activities 51.2 59.6 of w hich w orking capital adjustments 2.7 6.9
Net CF from investing activities -1.1 -10.8Net CF from financing activities -59.7 -17.0 of w hich new debt 0.0 105.0 of w hich buy-back and repayment of bonds (HLNG 02) 0.0 -65.0 of w hich debt amortisation and interest paid -46.6 -48.0 of w hich change in restricted cash and cash collateral 7.7 15.3
Net change in cash and cash eq. -9.6 31.8
Current cash and cash eq., start 151.9 120.1Current cash and cash eq., end 142.3 151.9
Cash flow statement for the quarter ended 30 September 2020
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Continued reversal of cash collateral
No refinancing activities in the quarter
Liquidity and debt repayment schedule
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1: Consolidated debt as of 30 September 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 September 2020 and assumed refinanced upon maturity
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Amortisation IFRS 16 Leases Balloons Bonds
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USD 142 million in unrestricted cash end Q3
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 Q3 2020 Financials
Agenda
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1 Q3 2020 Review and outlook
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Global monthly LNG trade
2015 2016 2017 2018 2019 2020
2.3% growth in global LNG trade YTD 2020 despite the impact of Covid-19
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European imports fell by 10% y-o-y
Global LNG trade up 2.3% y-o-y YTD 2020
Chinese LNG import growth continued in Q3, up 13% y-o-y
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
LNG is a growth market for the long term
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Japan, South Korea, and Taiwan Europe North America Other Asia South America Middle East & North Africa Sub-Saharan Africa Other
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
38 FSRUs on the water – 8 units in orderbook
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1: Including purpose built FSRUs and conversions, barges excluded2. Orderbook defined as confirmed orders, excluding LOIs, options and conversions not firmed upSource: publicly available company information, Höegh LNG
Botas4 purpose built FSRUs on order – 2 assumed open
38 FSRUs on water
4 conversions on order – all captive for projects
5 Q&A
4 Summary
3 Market update
2 Q3 2020 Financials
Agenda
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1 Q3 2020 Review and outlook
Summary
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EBITDA of 53 million and net loss of 2.6 million for Q3 2020
Stable operations with zero LTIs and 99.9% technical availability year to date
High level of business development activity
Resilient LNG demand – up 2.3% YTD
5 Q&A
4 Summary
3 Market update
2 Q3 2020 Financials
Agenda
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1 Q3 2020 Review and outlook
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Q&A session19 November 2020 - 09:00 CET
Call-in details:Norway +47 2195 6342United Kingdom +44 (0) 203 769 6819United States +1 646 787 0157
Participant passcode: 244610
Webcast: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20201119_1