Adnoc Gas Plc · ADX:ADNOCGAS
Adnoc Gas — H1 2023 Earnings Presentation
28 slides from Adnoc Gas's earnings presentation, Aug 4, 2023
Slide 1: H1 2023 ADNOC Gas Financial Results
ADNOC Classification: Internal ADNOC Gas H1 2023 ADNOC GAS FINANCIAL RESULTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023 4 AUGUST 2023 ADNOC GAS
Slide 2: Disclaimer
ADNOC Classification: Internal DISCLAIMER The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this presentation or on
Slide 3: Speakers
ADNOC Classification: Internal SPEAKERS Ahmed Alebri Chief Executive Officer Peter van Driel Chief Financial Officer 3 H1 2023 RESULTS PRESENTATION 3 ADNOC Gas
Slide 4: World-Class Gas Platform
ADNOC Classification: Internal WORLD-CLASS GAS PLATFORM LARGE SCALE TANGIBLE GROWTH PROJECTS RELIABLE FEEDSTOCK 10+ BSCFD Nameplate Processing Capacity1 3 BSCFD / 6 MTPA Access to World’s 20%+ vs. current production 29 MTPA Liquid Processing Capacity2 7th Largest Gas Processing & Liquid Processing G
Slide 5: Robust Demand Drivers
ADNOC Classification: Internal ROBUST DEMAND DRIVERS ✓ Global demand for natural gas is expected to see a Our Global Foot Print 25% increase in the next 25-30 years1 NETHERLANDS ✓ Located in a strategically situated corridor with GERMANY easy access to the largest and growing gas markets FRANCE ✓ In
Slide 6: Clear Growth Strategy
ADNOC Classification: Internal CLEAR GROWTH STRATEGY LEVERAGING AND ENABLING GROWTH AND DIVERSIFICATION Leveraging upstream Adding and maximising Expanding & enhancing 1 2 3 supply growth processing capacity and our product mix enabled by ADNOC’s intent to infrastructure Increasing the volume of hig
Slide 7: Core Growth Projects
ADNOC Classification: Internal CORE GROWTH PROJECTS RICH SET OF OPPORTUNITIES ASG Debottlenecking1 MERAM Bab Gas Cap2 Capacity Enhancement ESTIDAMA project (Asab) Project 5.03 CO2 Recovery and Injection (Habshan) LNG 2.0 IGD-E Key Dates Projects FID Execute Start Commissioning MERAM Q3 2023 Q3 2023
Slide 8: Key Highlights
ADNOC Classification: Internal KEY HIGHLIGHTS • World-class reliability of 98.9% maintained across our operations Operational • Shift to higher margin liquids demonstrates flexibility in operations • 15% volume increase in Q2 v Q1 • After unusually high prices in H1 22, average Brent prices normaliz
Slide 9: Financial Performance
ADNOC Classification: Internal FINANCIAL PERFORMANCE
Slide 10: Volatile Environment
ADNOC Classification: Internal VOLATILE ENVIRONMENT DOWNWARDS MOVEMENT IN KEY MARKER PRICES FOR Q2 2022 VS Q2 2023 Brent Oil LNG $/MMBtu $/bbl 60 ▼ 31% (12% Brent) 16 ▼ 31% 130 120 14 110 40 12 100 90 10 20 80 8 70 0 6 60 Q2 average JKM 12% Brent (RHS) Brent Source: IHS Markit Source: EIA LPG NAPHTH
Slide 11: Production Volume
ADNOC Classification: Internal PRODUCTION VOLUME ON TRACK TO MEET 2023 PRODUCTION GUIDANCE Production Volume (TBTU) ▲ 6% ▲ 1% 1,672 1,683 ▪ In the prevailing market environment, more scheduled 137 125 shutdowns across the facilities in H1 23 463 466 ▪ Production improvement in the second quarter (+1
Slide 12: Operational Highlights
ADNOC Classification: Internal OPERATIONAL HIGHLIGHTS ROBUST RELIABILITY AND AVAILABILITY ADNOC Gas Reliability ▪ Solid asset management and maintenance programs focused on H1 23 98.9% maintaining world class asset reliability ▪ Remain focused on maintaining stable, best-in-class reliability H1 22 9
Slide 13: Financial Performance: H1 23 vs H1 22
ADNOC Classification: Internal FINANCIAL PERFORMANCE: H1 23 VS H1 22 RESILIENT MARGINS IN CHANGING PRICE ENVIRONMENTS Revenues Costs Revenue & Costs US$, Billions ▼ 20% US$, Billions ▼19% ▪ 23% YoY drop in Brent prices 13.3 ▪ Increased number of planned shutdowns, 10.6 mainly in Q1, in a lower price
Slide 14: Financial Performance: Q2 23 vs Q2 22
ADNOC Classification: Internal FINANCIAL PERFORMANCE: Q2 23 VS Q2 22 RESILIENT MARGINS IN CHANGING PRICE ENVIRONMENTS Revenues Costs Revenue & Costs US$, Billions US$, Billions ▼ 24% ▼23% ▪ 31% YoY drop in Brent prices 7.1 ▪ 6% volume increase to offset price impact 5.4 ▪ 23% reduction in costs 4.8
Slide 15: Financial Performance
ADNOC Classification: Internal FINANCIAL PERFORMANCE PRICE IMPACT PARTLY OFFSET BY INCREASED VOLUMES, LOWER FEEDSTOCK COSTS AND TAXES Net Income – H1 22 and H1 23 (Half-on-Half) US$, Billions ▼ 12% ▪ H1 23 net income of $2,259 million was down 12% YoY ▪ Despite a lower revenue than H1 22, the impact
Slide 16: Financial Performance
ADNOC Classification: Internal FINANCIAL PERFORMANCE PRICE IMPACT PARTLY OFFSET BY INCREASE VOLUMES AND LOWER FEEDSTO CK COSTS Planned Shutdowns: Q2 23 vs.Q1 23 Net Income – Q1 23 and Q2 23 (QoQ) Days US$, Billions 84 158 0 43 Q1 23 Q2 23 Gas Processing ALNG ▪ Increased production volumes in the sec
Slide 17: Financial Performance
ADNOC Classification: Internal FINANCIAL PERFORMANCE KEY PILLAR OF THE EQUITY STORY – ADNOC GAS IS A PREDICTABLE MARGIN BUSINESS EBITDA US$, Billions 35% 34% 33% 33% 34% 33% EBITDA Margin H1 23 vs. H1 22 ▼ 22% 0.4 0.3 0.5 0.1 0.2 0.1 0.2 0.0 0.2 0.3 ▪ Domestic gas has continued to deliver 0.1 0.0 1.
Slide 18: Financial Performance
ADNOC Classification: Internal FINANCIAL PERFORMANCE FREE CASH FLOW IMPACTED BY PRICE ENVIRONMENT Free Cash Flow – H1 22 and H1 23 (Half-on-Half) US$, Billions ▼ 27% ▪ H1 23 Free Cash Flow declined 27% YoY to US$2,109 million ▪ The main impact was in EBITDA due to the stronger pricing environment se
Slide 19: Financial Summary
ADNOC Classification: Internal FINANCIAL SUMMARY $ Million H1 221 H1 232 YoY % Q2 221 Q1 232 Q2 23 YoY % QoQ % Q2 23 vs. Q2 Q2 23 vs. Q1 H1 23 vs. H1 22 22 23 Revenue 13,284 10,623 -20% 7,123 5,226 5,397 -24% 3% COGS -7,773 -6,015 -23% -4,241 -2,938 -3,078 -27% 5% Opex -947 -1,067 13% -468 -514 -553
Slide 20: Outlook
ADNOC Classification: Internal OUTLOOK
Slide 21: Forward Looking Guidance (1/2)
ADNOC Classification: Internal FORWARD LOOKING GUIDANCE (1/2) H1 23 Actual FY23 Range Financial EBITDA Margin % 33 33 - 35 H1 23 Actual FY23 Range (in TBTU) Production volume Domestic Gas Products 1,092 2,150 - 2,250 Exports & Traded Liquids 466 900 - 950 ALNG JV Products1 125 200 - 250 H1 23 Actual
Slide 22: Forward Looking Guidance (2/2)
ADNOC Classification: Internal FORWARD LOOKING GUIDANCE (2/2) • Company expects to gradually increase leverage to fund growth capex requirements Capital Structure • Conservative long-term leverage target of up to 1.5x net debt / EBITDA • $14bn over 2023-28 (peak Capex in 2025-26) Growth Capex • LNG
Slide 23: Summary
ADNOC Classification: Internal SUMMARY
Slide 24: Our Value Proposition
ADNOC Classification: Internal OUR VALUE PROPOSITION LEVERAGING AND ENABLING GROWTH AND DIVERSIFICATION 1 Vital to Abu Dhabi and the UAE Energy Ecosystem Critical Infrastructure 2 One-of-a-Kind Integrated Gas Platform 3 Exceptional Asset Base Delivering Returns… ADNOC Gas Sustainable and Evolving Yi
Slide 25: Q&A
ADNOC Classification: Internal ADNOC Gas Q&A 4 AUGUST 2023 ADNOC GAS
Slide 26: Appendix
ADNOC Classification: Internal APPENDIX
Slide 27: Financial Performance
ADNOC Classification: Internal FINANCIAL PERFORMANCE RESILIENT MARGINS IN CHANGING PRICE ENVIRONMENTS EBITDA H1 2022 vs H1 2023 EBITDA Q2 2022 vs Q2 2023 $, Billions $, Billions EBITDA Q1 2023 vs Q2 2023 $, Billions ▪ In 1H 2023 and Q2 2023, price dynamics negatively impacted EBITDA. Price effect wa
Slide 28: Select ADNOC Gas Growth Projects
ADNOC Classification: Internal SELECT ADNOC GAS GROWTH PROJECT $14BILLION PORTFOLIO OF STRATEGIC & GROWTH PROJECTS OVER THE NEX T 5 YEARS Highlights Impact Expected Completion • Extend market reach (new customer in Northern Emirates) A ESTIDAMA c.300km of pipeline Q3 2025 2 • Debottleneck existing n