Gulf Marine Services Plc · LSE:GMS
Gulf Marine Services — H1 2020 Earnings Presentation
29 slides from Gulf Marine Services's earnings presentation, August 2020
Slide 1: 2020 Half Year Results
2020 HALF YEAR RESULTS Gulf Marine Services PLC August 2020
Slide 2: Contents
Contents 1 H1 2020 Review, Current Status & Trading Update 2 H1 2020 Financial Results • EBITDA • Cost Savings • Fleet Utilisation and Rates • Revenue • Capital Expenditure • Cashflow 3 2020 Forward View 4 Appendices 2
Slide 3: H1 2020 Review, Current Status & Trading Update
H1 2020 REVIEW, CURRENT STATUS & TRADING UPDATE
Slide 4: H1 2020 Safe and Reliable Operations
H1 2020 Safe and Reliable Operations • Continued strong safety performance with zero lost time injuries 2020 Results • Adjusted EBITDA US$ 31.4m (34% increase compared to H1 2019: US$ 23.4m) • EBITDA guidance of US$ 57.0m – US$ 62.0m reconfirmed with Company now guiding to upper end Cost Savings • U
Slide 5: COVID-19
COVID-19 Group • Travel restrictions remain in UAE, Qatar and KSA. • Crew changes allowed in NW Europe and Qatar but remain on hold in UAE and KSA • Disruption to supplier performance minimal • Onshore and offshore contingency plans remain in place Onshore • All staff tested • Office operating norma
Slide 6: Current Status
Current Status Governance • Seafox shareholding increased overall to 29.99% • 3 main Shareholders (including Seafox) voted against Remuneration policies and several Directors at AGM in June • Three Directors not appointed leaving Company without functioning Audit and Risk Committee and only 1 Indepe
Slide 7: Technology
Technology • Cantilever successfully deployed over live well for first time for NOC client in MENA • Heavy coil tubing well intervention requiring multiple changes of bottom hole assembly carried out in a third of the time • 90% reduction in time required to move between platforms versus a drilling
Slide 8: 2020 H1 Financial Results
GMS BB 2020 H1 FINANCIAL RESULTS
Slide 9: 2020 Income Statement
2020 Income Statement US$ m H1 2020 H1 2019** % Change Revenue 49.8 55.0 Cost of sales less impairment * (35.4) (40.6) 13% Impairment charge - (4.6) General and administrative expenses * (4.9) (8.6) 43% Exceptional Items (8.5) - EBITDA 22.9 18.8 22% Adjusted EBITDA 31.4 23.4 34% Loss for the period
Slide 10: Adjusted EBITDA
Adjusted EBITDA All amounts in US$ m 19.0 31.4 -24.3 3.0 23.4 10.3 H1 2019 EBITDA Utilisation Day Rates Opex Reduction Overhead H1 2020 EBITDA Reduction 10
Slide 11: Continuous Drive to Reduce Costs
Continuous Drive to Reduce Costs Cost Savings Timeline US$ 16.5m Annualised Savings All amounts in US$ m Mar Sep Nov Dec Dec Jun 19 19 19 19 19 20 6% 2 4 26% 44% 6.0 6 8 8.5 8.5 10 10 10 12 12 10% 1213 15% 14 16 16.5 Organisation Facilities Vessel Catering 18 Third Party Suppliers Others 11
Slide 12: Continued Focus on G&A Expenditure
Continued Focus on G&A Expenditure G&A as % of Revenue Onshore Headcount 113 108 15 79 59 10 9% Dec-17 Dec-18 Dec-19 Current 5 H1 2018 H1 2019 H1 2020 27% further headcount reduction in 2020 12
Slide 13: Fleet Utilisation
Fleet Utilisation 100 96 92 90 86 78 80 Percentage Utilisation 69 70 65 58 60 54 K-Class utilisation 50 rise reflects strength of 40 activity in MENA 30 region 20 10 0 E-Class S-Class K-Class Fleet Average HY 2020 HY 2019 13
Slide 14: Fleet Average Day Rates
Fleet Average Day Rates 50 45 43 40 34 35 32 30 31 US$ 000s’ per day 30 26 E-Class day rate 25 22 reduction reflects 21 impact of vessel 20 relocation 15 10 5 0 E-Class S-Class K-Class Fleet Average 2020 HY 2019 HY 14
Slide 15: Diversified Revenue Streams
Diversified Revenue Streams Revenue by Geographical Location Revenue by Customer • UAE: position continues to strengthen following relocation of vessels and 3 UAE long term contract awards • Continued increase in NOC revenue from NOCs showing NW Europe • KSA: Remains a strong strategic their commitm
Slide 16: Capex Discipline
Capex Discipline 10.0 9.4 0.3 4.1 4.6 US$ m H1 2020 capex US$ 4.5m Long term capex spend 5.6 sustainable at 4.8 US$ 10 million per annum 2019 2020* Contract Specific Vessel Improvement and Other Maintenance * Latest 2020 forecast spend full year 16
Slide 17: Focus on Cash Flow
Focus on Cash Flow All amounts in US$ m H1 2020 49.8 -13.8 50 -4.5 -8.5 -0.6 -3.9 -3.1 15.4 15 Revenue Opex Overheads Exceptional Items Tax Changes in Capex and Other Net Cashflow Working Capital H1 2019 55.0 -24.1 -7.5 0.0 -1.8 -1.2 -6.3 14.1 Revenue Opex Overheads Exceptional Items Tax Changes in
Slide 18: Summary Balance Sheet
Summary Balance Sheet The Fleet • Net book value US$ 653.5m. Impairment indicator assessment carried out with none identified Working Capital US$ m Dec 2019 Jun 2020 Trade Receivables 25.1 23.1 Trade Payables (11.5) (8.5) Net Working Capital 13.6 14.1 Net Debt US$ m Dec 2019 Jun 2020 Bank debt* (398
Slide 19: New Loan Facilities
New Loan Facilities • Amend and Extend Agreement executed on 10 June 2020 • Enhanced liquidity through new US$ 50m working capital facility • Re-phased amortisation • Increased Financial Covenant headroom • Current coupon 5%, will reduce as debt metrics improve • Incentives to de-lever through share
Slide 20: 2020 Forward View
BB 2020 FORWARD VIEW
Slide 21: Operations Update
Operations Update • Continued vigilance on COVID-19 developments • 83% secured utilisation for 2020 and 54% for 2021 • Cantilever successfully deployed over live well for first time for NOC client in MENA • Commitment to sustainable maintenance programme • Framework agreement with Zakher Marine Inte
Slide 22: Further cost savings
Further cost savings All amounts in US$ m 2019 to H1 2020 Savings Secured Savings Secured Dec 19 Jun 20 Revised target US$ 18.5m Further cost savings will be 13.0 achieved from: 16.5 • Framework agreement savings • Third party supplier contracts • Continued focus on manpower 22
Slide 23: Market Outlook
Market Outlook Middle East NW Europe • Near term demand for vessels capable of being • Long term demand mainly been driven by deployed rapidly to support EPC work renewables market as wind turbine capacity • Delays in commencement of some larger EPC forecast to nearly double by 2025 projects and ten
Slide 24: Summary
Summary • Continue to deliver excellent safety and operational performance Safe and reliable • Clear procedures remain in place for COVID-19 • Annualised cost savings target reset at US$ 18.5m Low-cost operations • H1 2020 adjusted EBITDA 34% ahead of H1 2019 Strengthening position in • 83% of 2020,
Slide 25: Appendices
BB aprenvices
Slide 26: Fleet Overview
Fleet Overview E-CLASS S-CLASS K-CLASS ▪ 4 units ▪ 3 units ▪ Avg age: 7 years ▪ Avg age: 5 years ▪ 6 units ▪ Water Depth: 65-80m ▪ Water Depth: 55m ▪ Avg age: 13 years ▪ Accommodation for up to 300 people ▪ Accommodation for up to 300 people ▪ Water Depth: 45-55m ▪ 1000m² Deck Area ▪ 850m² Deck Area
Slide 27: Cantilever System v Drilling Rig
Cantilever System v Drilling Rig • GMS is the first to introduce a cantilever capability on a self-propelled SESV, allowing delivery of well intervention services previously only carried out by drilling rigs including: - Change out of electric submersible pumps - Completions - Running casing - Plugg
Slide 28: Key Services Provided
Key Services Provided Wind Turbine Commissioning and Installation, Topside Maintenance Well Intervention Accommodation Maintenance and Accommodation 28
Slide 29: Disclaimer
Disclaimer This presentation has been prepared by Gulf Marine Services PLC (the "Company") and comprises the slides for a presentation to analysts concerning the Company. This presentation has been prepared solely for informational purposes and does not constitute or form part of or contain any invi