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Earnings Presentation
Second Quarter 2015 20 August 2015
Disclaimer
This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and
uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current
expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries
that are major markets for Siem Offshore (“SIOFF”) and its subsidiaries. These expectations, estimates and projections are
generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important
factors that could cause actual results to differ materially from those expectations include, among others, economic and market
conditions in the geographic areas and industries that are or will be major markets for the Siem Offshore businesses, oil prices,
market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency
exchange rates and such other factors as may be discussed from time to time. Although Siem Offshore believes that its
expectations and the information in this Presentation were based upon reasonable assumptions at the time when they were
made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this
Presentation. Siem Offshore nor any other company within the group is making any representation or warranty, expressed or
implied, as to the accuracy, reliability or completeness of the information in the Presentation, and neither Siem Offshore , any
other company within the group nor any of their directors, officers or employees will have any liability to you or any other persons
resulting from your use of the information in the Presentation. Siem Offshore undertakes no obligation to publicly update or revise
any forward-looking information or statements in the Presentation.
There may have been changes in matters which affect Siem Offshore subsequent to the date of this presentation. Neither the
issue nor delivery of this presentation shall under any circumstance create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or that the affairs of Siem Offshore has not since changed, and Siem
Offshore does not intend, and does not assume any obligation, to update or correct any information included in this presentation.
The contents of this presentation are not to be construed as legal, business, investment or tax advice. Each recipient should
consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice. 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.
2
• Second quarter 2015 operating revenue of USD 124.4 million and operating margin of USD 41.1 million (33%),
compared to USD 114.2 million in operating revenue and USD 38.2 million (33%) in operating margin in second
quarter 2014.
• Agreed a 6-month contract with options for the PSV “Siem Pilot”.
• Entered into a 5-year charter for the OSCV “Siem Marlin” commencing in September 2015.
• Reached a new agreement with Daya Materials Berhad for the sale of the OSCV “Siem Daya 1”.
• Agreed sale of the PSV “Siem Sasha” to a company owned 51% by Siem Offshore.
• Siem Offshore Contractors awarded a turnkey supply and installation contract for the inner array grid cable system
for the Veja Mate Offshore Windfarm project.
• Placed two AHTS vessels in lay-up at the end of the second quarter.
• Conducted a review of vessel valuations and elected to record impairments of an aggregate USD56 million on
certain vessels.
• The Company’s Board of Directors approved a USD100 million Rights Issue. The Company’s largest shareholder,
Siem Europe S.a r.l., has fully underwritten the Rights Issue.
• Aggregate backlog for the Company was USD1.62 billion at the end of second quarter.
3
Highlights Second Quarter 2015
• The Board of Siem Offshore Inc. appointed Idar Hillersøy as Chief Executive Officer of the Company.
• Daya paid the deposit of USD10 million for the “Siem Daya 1”.
• Extended contract for the R/V ‘JOIDES Resolution’ until 30 September 2016.
• Agreed extension of maturity for the mortgage debt financing of 6 x AHTS vessels until 2018.
• Agreed extension of maturity for USD60 million Revolving Credit Facility with largest shareholder.
• Prospectus published and subscription period in connection with the Rights Offering commenced on 19 August
2015.
4
Subsequent Events
Income Statement Second Quarter
Second Quarter First Half Twelve Months
Ended
(Amounts in USD million)
2015
Unaudited
2014
Unaudited
2015
Unaudited
2014
Unaudited
2014
Audited
Operating revenue 124.4 114.2 250.4 208.6 491.3
Operating expenses ( 72.4) ( 63.3) (149.5) (109.8) ( 250.2)
Administration expenses ( 10.9) ( 12.7) (21.1) (23.7) ( 47.0)
Operating margin [1] 41.1 38.2 79.8 75.1 194.1
Operating margin % 33 % 33 % 32% 36% 40 %
Depreciation and amortisation ( 26.4) ( 23.3) (53.2) (44.8) ( 96.9)
Impairment of vessels (56.0) 0.0 (56.0) 0.0 ( 29.0)
Gain/(Loss) on sale of fixed assets 0.0 (0.0) 0.0 6.6 18.7
Gain of sale of interest rate derivatives (CIRR) 0.1 0.1 0.2 0.2 0.4
Gain/(Loss) on currency derivative contracts [2] 10.8 3.7 (25.3) 10.1 ( 3.0)
Net financial items [3] ( 13.4) ( 6.1) (13.6) (16.1) ( 10.9)
Profit before tax ( 43.8) 12.6 (68.0) 31.2 73.4
Income tax provision ( 1.2) ( 0.5) (2.6) (1.3) ( 2.7)
Net Profit (loss) ( 45.0) 12.1 (70.6) 29.9 70.7
Net profit attributable to non-controlling interest ( 1.1) 0.4 (1.2) 3.2 12.6
Net profit attributable to shareholders ( 43.9) 11.7 (69.5) 26.7 58.1
Earnings per share [4] ( 0.11) 0.03 (0.18) 0.07 0.15
Average number of shares outstanding [5] 387 591 387 591 387 591 387 591 387 591
[1] Operating revenue less operating expenses
[2] Revaluation of off-balance sheet currency contracts entered into in order to hedge both operating expenditures and future yard instalments in foreign currencies.
[3] Including revaluation of non-USD currency balance sheet items and mark-to-market effects on interest rate derivatives
[4] Net profit / Average number of shares outstanding (diluted)
[5] Weighted average number of shares outstanding (diluted) ('000) 5
Adjusted Net Profit
Second Quarter First Half Twelve Months
Ended
(Amounts in USD million)
2015
Unaudited
2014
Unaudited
2015
Unaudited
2014
Unaudited
2014
Audited
Net Profit (loss) ( 45.0) 12.1 (70.6) 29.9 70.7
Unrealized (profit) loss on currency derivatives (20.4) 0.7 6.9 (5.7) 5.6
Unrealized (profit) loss on interest rate derivatives (1.8) 0.8 (1.2) 0.9 0.4
Other unrealized (profit) loss on currency positions 3.7 (7.6) (6.5) (8.1) (30.6)
Adjusted Net Profit (loss) (63.5) 6.1 (71.5) 17.0 46.2
Impairment of vessels 56.0 0.0 56.0 0.0 29.0
Adjusted Net Profit (loss) before impairments (7.5) 6.1 (15.5) 17.0 75.2
• Unrealised profit and loss from currency derivatives relates to financial instruments entered into in order to
hedge operational cash flows and future yard instalments in foreign currencies.
• Unrealised profit and loss from interest rate derivatives relates to mark-to-market valuations of financial
instruments entered into in order to manage interest rate risk.
• Other currency positions includes unrealized profit and loss from balance sheet items denominated in foreign
currencies.
6
• Book equity ratio of ~ 34%.
• Cash and cash equivalents of approx.
USD 75 million as of 30 June 2015.
• Net interest bearing debt as of 30 June
2015 of USD 1,083 million.
• Current cost of debt approximately 4.3%
p.a., including the effect of interest rate
derivatives.
Financial Position as of 30 June 2015
7
Current Liabilities
Non-Current Liabilities
Total Equity
Other Current Assets
Cash & Cash Equivalents
Non-Current Assets
(all in USDm)
Cash and Cash Equivalents development
• Net cash flow from operations USD 55.1 million.
• Cash flow from investing activities USD (54.4) million.
• Cash flow from financing activities USD (39.0) million.
• Net change in cash USD (38.3) million, before exchange rate differences.
• Effect of exchange rate differences USD (4.8) million.
8
Scheduled Debt Maturity Profile 06.2015 - 2019
9
• The graph reflects committed and assumed mortgage debt for all 8 vessels(1) under construction per end of 2Q
2015.
• Gross debt expected to peak in 2016 based on existing financing and estimated financing for vessels under
construction. The graph includes debt repayment in 2015 from the sale of “Siem Daya 1”.
• Agreed extension of maturity for mortgage debt financing (6 AHTS vessels) from 2015 to 2018.
• Loan to value at low ratios for balloon instalment of mortgage debt financing in 2017, i.e. low refinancing risk.
• NOK 600 million (USD 76.4 million) of unsecured bonds with maturity in 2018.
• NOK 700 million (USD 89.1 million) of unsecured bonds with maturity in 2019.
[1] Only including wholly-owned vessels under construction.
Future Yard Instalments per end 2Q 2015
• Yard instalments for shipbuilding contracts
are normally paid with 20% during
construction and 80% at delivery.
• The Company has secured mortgage debt
financing for all of its eight wholly-owned
vessels currently under construction.
• The AHTS vessel under construction for
Secunda is not included in the table.
Mortgage debt financing is also secured for
this vessel.
• Cash balance, cash from operations and
Rights Offering to cover mismatch between
future yard instalments and committed debt
facilities.
10
Amounts in USD million
Future Yard Instalments 2015 2016 Total
OSRVs 5.3 0.0 5.3
PSVs 54.6 107.5 162.1
CLV 0.0 57.8 57.8
WIV 31.8 229.4 261.2
Total 91.7 394.7 486.4
Debt facilities 2015 2016 Total
OSRVs 4.9 0.0 4.9
PSVs 45.8 107.4 153.2
CLV 0.0 55.3 55.3
WIV 0.0 217.0 217.0
Total 50.7 379.7 430.4
11
• Firm contract backlog for the OSV segment of
USD 1.35 bn.
• 6M 2015 – USD 125 million.
• 2016 – USD 270 million.
• 2017 onwards – USD 950 million.
• Approximately 65% backlog for vessels
covered for the second half of 2015 based on
both firm and option contracts.
• Firm contract backlog for the Industrial
Segment of USD 287 million.
• 6M 2015 – USD 38 million.
• 2016 – USD 173 million.
• 2017 onwards – USD 67 million.
Contract Backlog - Approximately USD 1.62bn of Firm Contract Backlog as of 30 June 2015.
Operating Margin, Vessels in Operation and Shipbuilding Contracts
OSV Segment
13
OSCV AHTS Vessels
Other
vessels
# 10
# 101)
Vessels in operation
Canadian
fleet
# 63)
1) Incl. two vessels owned by a partner
2) Incl. three 51% owned
3) 50% owned
4) Agreed sold to the charterer Daya Materials Berhad as
described in stock exchange notice in April 2015.
# 6
Average age of 5 years
Average age of 2 years
Other vessels # 17
Average age of 7 years
PSV (3,600 – 5,100 dwt) # 122)
Installation
support vessel
# 1
4)
OSV Segment - Currently 45 Vessels in Operation
OSV Segment - Comments to Second Quarter
• 98% utilisation of the OSCV fleet.
• Five of the vessels operated on long-term contracts during the quarter.
• Three vessels operating in the North Sea/Europe.
• Two vessels operating in the US Gulf of Mexico.
• One vessel came of a long term contract outside West Africa, and is tendering for short term
contracts prior to commencing a five year term contract in the third quarter 2015.
• 83% utilisation of the PSV fleet.
• Four PSVs are employed offshore Brazil.
• Three PSVs are employed in the North Sea region
• One PSV is employed offshore West Africa and one PSV is on a bareboat contract.
• Two vessels came off contracts in West Africa during the quarter.
• The Company has currently three PSVs in West Africa tendering for work.
• 67% utilisation of the AHTS fleet.
• One AHTS vessel is operating on a long-term contract in Brazil
• One AHTS vessel is operating for Siem Offshore Contractors.
• One AHTS vessel recorded 65 days commercial off-hire related to a 5 year scheduled dry-docking.
• Two AHTS vessels are placed in lay-up.
• The remaining AHTS vessels are operating in the North Sea/Europe spot market.
• 92% utilisation for the fleet of smaller Brazilian flagged vessels.
• All 9 vessels operated on term contracts in Brazil during the quarter.
14
15
OSV Segment - Operating Margin Second Quarter
Second Quarter 2015 Second Quarter 2014
Amounts in USD million Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
PSVs [2] 21.9 ( 10.0) 11.9 54 % 21.3 ( 10.5) 10.8 51 %
OSCVs 30.6 ( 9.1) 21.5 70 % 23.3 ( 7.6) 15.7 67 %
AHTS vessels[2] 14.2 ( 16.5) ( 2.4) n.m 33.6 ( 16.8) 16.8 50 %
Smaller Brazilian flagged vessels[1] 5.9 ( 3.9) 2.0 34 % 5.4 ( 4.5) 0.9 17 %
G&A ( 7.7) ( 7.7) ( 10.4) ( 10.4)
Intercompany eliminations, other [2] ( 2.4) 4.0 1.6 ( 4.6) 6.6 2.0
Total 70.1 ( 43.3) 26.8 38 % 79.1 ( 43.3) 35.8 45 %
[1] Smaller Brazilian flagged vessels include Oil Spill Recovery Vessels and Fast Supply and Crew Boats
[2] The PSV and the AHTS segment includes I/C revenue from contracting work for the 100% owned subsidiary Siem Offshore Contractors. The offsetting
IC opex is included under the Industrial Segment for Submarine Power Cable activities.
OSV Segment - Employment for vessels in operation
16
2015 2016 2017 2018
Vessel Type Ownership 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Siem Sasha PSV 51 %
Sophie Siem PSV 100 %
Siem Louisa PSV 100 %
Siem Hanne PSV 100 %
Siem Carrier PSV 100 %
Siem Supplier PSV 100 %
Hugin Explorer PSV 100 %
Siem Atlas PSV 100%
Siem Giant PSV 100%
Siem Symphony PSV 100%
Siem Pilot PSV 51%
Siddis Mariner 1) PSV 51%
Siem Marlin OSCV 100%
Siem N-Sea OSCV 100%
Siem Daya 1 2) OSCV 100%
Siem Daya 2 OSCV 100%
Siem Spearfish OSCV 100%
Siem Stingray OSCV 100%
Siem Pearl AHTS 100%
Siem Emerald 4) AHTS 100%
Siem Sapphire AHTS 100%
Siem Aquamarine 3) AHTS 100%
Siem Ruby AHTS 100%
Siem Topaz AHTS 100%
Siem Diamond 3) AHTS 100%
Siem Amethyst AHTS 100%
Siem Garnet 4) AHTS 0%
Siem Opal AHTS 0%
Siem Moxie 5) ISV 100%
Total order backlog in % and USD mill. 55% 90 39% 142 27% 99 11% 40
1) Employment for Siddis
Mariner includes firm time
charter for Siem Offshore
Contractors.
2) The backlog for Siem Daya 1
includes an assumption of
completion of sale in August
2015.
3) Siem Aquamarine and Siem
Diamond currently placed into
lay-up
4) Employment for Siem Garnet
and Siem Emerald includes
firm time charter for Siem
Offshore Contractors
5) The ISV Siem Moxie shall
primarily be utilized by the
subsidiary Siem Offshore
Contractors for cable
installation projects within the
offshore wind-farm segment.
Contract Contract option Spot work Contract with subsidiary
Agreed sold
OSV Segment - Employment for vessels in operation (con’t)
2015 2016 2017 2018
Vessel Type Ownership 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Big Orange XVIII WSV 41 %
Burin Sea AHTS 50%
Panuke Sea PSV 50%
Ryan Leet MPSV 50%
Trinity Sea AHTS 50%
Venture Sea AHTS 50%
Scotian Sea MPSV 50%
Total order backlog in % and USD mill. 97% 18 67% 23 23% 9 4% 2
Siem Maragogi OSRV 100%
Parnaiba FSV 100 %
Propriá FSV 100 %
Capela FSV 100 %
Siem Piatã FCV 100 %
Siem Pendotiba FCV 100%
Siem Caetes FSP 100%
Siem Carajas FSP 100%
Total order backlog in % and USD mill. 100% 13 100% 25 100% 25 82% 22
Contract Contract option Spot work
17
2015
1Q 2Q 3Q 4Q
2016
1Q 2Q 3Q 4Q
2017
1Q 2Q 3Q 4Q
18
OSRV, Siem Marataizes
CLV, Siem Aimery
PSV DF, Siem Pride
PSV DF, ”TBN 1”
PSV DF, ”TBN 2”
PSV DF, ”TBN 3”
WIV, Siem Helix 1
WIV, Siem Helix 2
AHTS, Avalon Sea (Note 1)
Note 1) Vessel under construction in the 50% owned entity Secunda.
OSV Segment - Vessels under Construction, including Employment
Under Construction Contract Contract option Contract with subsidiary
• Mortgage debt financing secured for all vessels under construction.
• The CLV shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable installation projects
within the offshore wind-farm segment.
• Total firm backlog for vessels under construction at approximately USD 761 million as of end second quarter
2015.
7 Yrs Firm + Options
7 Yrs Firm + Options
Long term contract with Subsidiary
8 Yrs Firm + Options
5 Yrs Firm + Options
5 Yrs Firm + Options
• The North Sea spot market for AHTS vessels and PSVs continued the trend from the
first quarter with soft rates and utilization. Additional AHTS vessels and PSVs have
returned to the North Sea from various parts of the world, especially from Brazil,
leading to further increased supply of vessels. Vessel owners have continued to put
vessels into lay-up and additional lay-ups are expected if activity remains weak.
• Oil operators have continued to cancel rig contracts and several projects expected to
absorb vessels from the North Sea have been cancelled or postponed, such as
South Stream, Kara Sea and other Arctic and Russian projects.
• In Brazil, tendering activity for OSVs for the rest of 2015 is expected to be limited.
• In West Africa, the activity level and demand for PSVs and AHTS vessels have
dropped, and a large number of vessels are currently idle waiting for work. There are
few new tenders for OSVs, and we expect this trend to continue into 2016.
• The outlook for the OSV market is expected to remain challenging.
19
OSV Segment - Market Outlook
Industrial Segment Operating Margin, Investments
Industrial Segment - Operating Margin Second Quarter
Second Quarter 2015 Second Quarter 2014
Amounts in USD million Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Submarine Power Cable activities [1] 45.1 ( 32.0) 13.1 29 % 26.8 ( 25.9) 0.9 3 %
Scientific Core-Drilling 6.5 ( 2.8) 3.7 56 % 6.5 ( 2.8) 3.7 58 %
Siem WIS 1.8 ( 0.5) 1.3 n.m 0.2 ( 0.1) 0.0 n.m
Combat Management Systems 0.9 ( 1.4) ( 0.5) n.m 1.7 ( 1.7) 0.0 1 %
G&A ( 3.2) ( 3.2) (2.3) (2.3)
Total 54.3 ( 39.9) 14.4 27 % 35.1 ( 32.7) 2.4 7 %
[1] The OSV Segment included I/C revenue for PSV and AHTS vessels from contracting work for the 100% owned subsidiary Siem Offshore Contractors
The offsetting IC opex is included under the Industrial Segment for Submarine Power Cable activities.
21
22
Amrumbank West
OWF Baltic 2 OWF Nordsee One Nordsee One OWF
Project
Project phase
Vessel utilisation
Profit recognition
Awarded
Installation of 86
submarine cables
providing the inner-
array grid connecting
All contractual works
completed. Final
completion certificate
for the project during
August 2015.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
Positive margin
recorded in both 1Q
and 2Q 2015, and any
remaining margin will
be recorded in 3Q
2015.
Mar, 2012
Consortium EPIC
contract for the 155kV
export cable system
Nordsee One
Planning, preparation
and engineering. The
project remains on track
for mechanical
completion by 3Q 2016.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities.
(i.e no margin in 2015).
Dec, 2012
Installation of 86
submarine cables
providing the inner-
array grid connecting
As-built survey works to
be completed within 3Q
2015 and as-built
documentation shall be
submitted in 4Q 2015.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
A positive margin was
recorded in 2014,and in
first and second quarter
2015. The remaining
margin will be recorded
in second half of 2015.
Feb, 2013
Turnkey EPIC package
of the inner array grid
cable system for 54
wind turbine generators
Planning, preparation and
engineering expected.
Offshore installation from
3Q 2016.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities in
2016.
Apr, 2014 1)
[1] The project reached financial close in April 2015.
Veja Mate OWF
Turnkey EPIC package
of the inner array grid
cable system , 73
submarine composite
cables.
Planning, preparation
and engineering. The
project is on track for
mechanical completion
by 2Q 2017.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities.
Apr, 2015
Industrial Segment - Siem Offshore Contractors; Submarine power cable activities by main projects
• The Julius project commenced late April and Siem WIS is still onboard “Maersk Gallant”
delivering the pressure control device (“PCD”) services. The operation has been a good
success for Siem WIS and has again proven the advantages of the PCD technology.
• Siem WIS has also been awarded a contract for a managed pressure drilling (‘MPD”)
operation at Gullfaks, the mobilisation is currently ongoing and the offshore operation is
scheduled to start early September.
• The Valemon operation is still on track for start-up in November 2015. It was possible to drill
the Gudrun well without utilising MPD; however, Siem WIS has been on-call onshore during
this operation.
23
Industrial Segment - Siem WIS
• The scientific core-drilling vessel “JOIDES Resolution” recorded operating revenues
of USD 6.5 million (2014: USD 6.5 million) and an operating margin before
administration expenses of USD 3.7 million (2014: USD 3.7 million). The operating
margin as a percentage of revenue was 56% (2014: 58%).
• The client, TAMRF, has extended the contract for the “JOIDES Resolution” until 30
September 2016 and holds further options to extend the charter until 30 September
2023 on an annual basis.
24
2015 2016 2017 2018
Vessel Type Ownership 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Joides Resolution SPV 100 %
Total order backlog in % and USD mill. 100
% 13 75% 19 0% 0 0% 0
Scientific Core Drilling Vessel
# 1
Industrial Segment - Overseas Drilling Ltd. (JOIDES Resolution)
• Built: 1978 (Major Upgrade 2009)
• Length: 143 m Beam: 21 m
• Gross tonnage: 10,282 t
• Accommodation: 130 persons
• Max endurance: 75 days
• Drilling capacity: 2,000 meters
into the seafloor in water depths
of up to 7,000 meters
Vessel Specification
• SOC experienced an increased tendering activity for EPIC-based contracts for both
medium- and high-voltage power cables in the offshore windfarm (“OWF”) market
with scheduled marine installation activities in 2017, 2018 and 2019.
• SOC is also tendering for various operations and maintenance contracts.
25
Industrial Segment - Market Outlook