Magseis ASA
Transcript of Magseis ASA
Magseis ASA Q3 201830th October 2018
Transformative technology deal
This presentation (the “Presentation") has been prepared by Magseis ASA (the“Company” or “Magseis”).
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Disclaimer
Source: Magseis
AGENDA
3
Financials
Market development and operations
Summary
Introduction
Highlights Q3 2018
Financial Performance
Operational Performance
Technology
Further growth, backlog and outlook
• Record Backlog of USD 215 million• Confirmed guidance of expected revenue for 2018 of USD 100m (timing risk)
and issue revenue guidance for 2019 of USD 190m-210m
• Revenue of USD 16.0m and EBITDA of USD -0.5m• Net cash flow from operations USD 7.6m
• Sale of 17.000 nodes and 4 handling systems to Chinese BGP Offshore• Establish a technology division capitalising on Magseis’ technological excellence
• Scaling from one to three crews in operation• Delay in South East Asia due to permit issues
Source: Magseis4
Develop and operate proprietary technology to be applied in seismic acquisition operations
Headquarter in Oslo, Norway with offices in Stockholm, Singapore and Houston
~200 employees of which ~50% offshore
Geophysical company founded in 2009 with first operation in 2013
OSE:MSEIS
Market Cap USD~160 million
Revenue Guidance 2018: USD 100m
Node Pool: 14 000 MASS I
Corporate snapshot
5Source: Magseis
$
AGENDA
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Introduction
Market development and operations
Summary
Financials
Q3 2018 results - Comprehensive income
7Source: Magseis
In USD thousands Q3 2018(unaudited) % Q3 2017
(unaudited) % YTD2018(unaudited) % FY 2017
(audited %
Revenue 15 996 28 650 60 279 73 877
Cost of sales 11 084 11 590 30 890 35 701
Research and development 581 494 1 812 2 002
SG&A and other expenses 4 862 2 643 12 545 10 039
EBITDA -531 - 13 923 48.6 15 032 24.9 26 136 35.4
Depreciation 3 940 4 962 11 505 15 148
Amortisation 191 116 573 463
Impairment 0 0 0 233
EBIT -4 662 - 8 845 30.9 2 954 4.9 10 292 13.9
Net finance costs 290 -1 309 1 792 397
EBT -4 952 10 154 1 162 9 895
Tax 997 493 1 984 3 199
Net income -5 949 - 9 660 33.7 -822 6 696 9.1
Total comprehensive income -5 949 9 660 -822 6 696
• Revenue• Deferred 1 month of revenue to Q418 due to delay
in South East Asia for permit issues• 1 month transit between jobs in Red Sea• Start up in July on Northern Europe job that is still
ongoing, which will positively impact revenue
• Cost of sales & SG&A• 3 parallel operations in Q318 with capitalised
mobilisation in South East Asia• Scaling up organisation and offshore crew• SG&A increase due to corporate activities
• Depreciation• Depreciation capitalised for mobilisation in South
East Asia
• Finance• Treasury activities initiated in Q2 yielding results• Unrealised net exchange loss of USD 0.2m in Q318
• Tax• Witholding tax in Saudi Arabia
Q3 2018 results - Balance sheet
8Source: Magseis
• Equipment• Continue to invest in nodes and handling
systems
• Other current assets• Mobilisation of USD 3.1m
• Equity ratio of 82.3%• In compliance with all covenants
• Liabilities• Senior debt from Export Credit Norway and
Innovation Norway of USD 6.3m @ 4.15% interest (split non-current USD 4.4m and USD 1.9m current)
• Shell Deep Water R&D funding: USD 7.3m (contingent liability)
In USD thousands YTD 2018(unaudited)
YTD 2017(unaudited)
YE 2017(audited)
Equipment and other intangibles 101 140 64 234 74 416Multi-client library 0 0 0Cash and cash equivalents 33 504 45 427 29 776Trade receivables 15 743 16 394 9 137Stock (fuel and batteries) 3 720 908 1 752Other current assets 5 370 2 964 8 469TOTAL ASSETS 159 477 129 927 123,549
Share capital 545 438 438Share premium 178 508 141 486 141,486Retained earnings and other reserves -47 761 -37 149 -46,884TOTAL EQUITY 131 292 104 775 95 040
Obligation under finance lease 0 181 0Other non-current financial liabilities 11 771 13 482 13 049TOTAL NON-CURRENT LIABILITIES 11 771 13 662 13 049
Trade payables 6 408 4 965 6 010Current tax liability 889 721 1 111Other current liabilities 9 116 5 804 8 338TOTAL CURRENT LIABILITIES 16 414 11 490 15 460
TOTAL LIABILITIES 28 185 25 152 28 509
TOTAL EQUITY AND LIABILITIES 159 477 129 927 123 549
Q3 2018 results - Cash flow
9Source: Magseis
• Cash flow from operations• Positive working capital adjustments as
expected
• Cash flow to investments• Disciplined CAPEX spend for equipment
• Cash flow to financing• Down-payment of debt USD 1.1m
• Cash position• Robust cash position of USD 33.5m
Earnings before tax -4 952 10 154 1 162 9 895
Depr, Amor, Impair(non cash-effect)
4 012 4 959 11 727 15 405
Depr, Amor, Impair(cash-effect)
-617 -1 056 -1 319 -2 850
Net working capital adjustments 9 165 7 128 -6 960 1 708
Net cash flow from operating activities 7 609 21 185 4 609 24 157
Net cash flow from investing activities -9 204 -8 796 -35 052 -44 557
Net cash flow from financing activities -1 069 -619 34 171 31 201
Net change in cash and cash equivalents -2 664 11 770 3 728 10 801
Cash balance at the beginning of the period 36 168 33 657 29 776 18 974
Cash balance at period end 33 504 45 427 33 504 29 776
In USD thousands Q3 2018(unaudited)
Q3 2017(unaudited)
YTD 2018(unaudited)
FY 2017(audited)
KEY FIGURES
Q3 2018
Source: Magseis
16.0REVENUE
-0.5EBITDA
-5.9NET PROFIT
33.5CASH BALANCE
$ MILLION
$ MILLION $ MILLION
$ MILLION $ MILLION
13.9
EBITDA
Q3 2017
28.7
REVENUE
Q32017
-0.5
EBITDA
Q32018
REVENUE
Q32018
16.0
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KEY FIGURES
YTD Q3 2018
Source: Magseis
60.3REVENUE
15.0EBITDA
-0.8NET PROFIT
33.5CASH BALANCE
$ MILLION
$ MILLION $ MILLION
$ MILLION $ MILLION
30.7
EBITDA
YTD 2017
69.1
REVENUE
YTD2017
15.0
EBITDA
YTD2018
REVENUE
YTD2018
60.3
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AGENDA
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Financials
Introduction
Summary
Market development and operations
Source: Magseis
• Selling 17.000 nodes and 4 handling systems for delivery in 2019
• To be utilised in Abu Dhabi in relation to the USD 1.6 billion and 6 year seismic program BGP Offshore won, sanctioned by ADNOC
• Deal won after more than 2 years of collaboration in the Red Sea with BGP with a rock solid track record with consistent data recovery rate above 99%
• Enables Magseis to capitalise on its technological excellence and establish its technology division in addition to data acquisition
Transformative technology deal with BGP Offshore
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Source: Magseis
• Artemis Athene completed its S78 survey end of July and then had 1 month transit and preparation for the commencement of the extension survey
• Northern Europe operation started early July and will last until November
• South East Asia project delayed approx. 45 days due to permit issues. Project now commenced with some timing risk on revenues
Q3 2018 – three operations in the making
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Three parallel operations
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• Fully automated MASS Modular Operation• Shallow water - Nodes on a Rope• Dual node deployment vessels• End client - Major oil Company• Operating as a subcontractor
• Artemis Athene – Into her 24th month in the Red Sea• MASS Cable operation – Very rugged seabed terrain• Zero to 1100 m water depth• Nodes on a rope in shallow water• Multi vessel operation • End client - National Oil Company• Operating as a subcontractor
• Fully automated MASS Modular Operation• ROV & Source vessel chartered on project basis• Two Major Oilco’s and one National Oil Company• Four different surveys combined into one project• Magseis operating as prime contractorATHENE Crew 1
MASS Modular Crew 3
MASS Modular Crew 2
Source: Magseis
Marine AutonomousSeismic System
Strong Market Outlook – Undersupply in 2019
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120 000
100 000
80 000
60 000
40 000
20 000
0
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Node supply vs expected demand
Source: Magseis
AGENDA
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Financials
Market development and operations
Introduction
Summary
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Transformative BGP deal
Capitalise on technological excellence
Demand driven market in 2019