Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Sembcorp Marine — Q3 2016 Earnings Presentation
46 slides from Singapore Exchange's earnings presentation, Oct 25, 2016
Slide 1: Corporate Presentation: 3Q & 9M 2016 Results
CORPORATE PRESENTATION 3Q & 9M 2016 Results – October 25, 2016 1 Aerial view of Tuas Boulevard Yard Phase I and II Aerial view of Phase I of Sembcorp Marine Tuas Boulevard Yard
Slide 2: Agenda
AGENDA CEO Address CFO Financial Highlights 2
Slide 3: CEO Address
CEO ADDRESS Macro update Financial performance for 3Q & 9M 2016 Operations Review Outlook and Prospects 3
Slide 4: Macro environment remains weak
Macro environment remains weak General slowdown in economic growth and market volatility and uncertainty continues to impact sentiment. OPEC’s deal to cut production has resulted in another oil price rebound to above USD50 per barrel. Demand outlook for offshore exploration and production activities
Slide 5: Financial Performance
Financial Performance Key Highlights for 9M 2016: 9M 2016 Revenue and Profit performance 4,000 300 Total revenue of S$2.7 billion. 3,641 3,500 Net Profit was S$44.5 million. 250 247 Key Highlights for 3Q 2016: 3,000 2,715 200 Total revenue of S$888 million. 2,500 S$ million S$ million Net Loss was S
Slide 6: Operations Review
Operations Review Key deliveries in 9M 2016 have improved overall cash flow and strengthened Sembcorp Marine’s balance sheet. 5 significant deliveries were made during 9M 2016. 6
Slide 7: Deliveries in 2016 – Noble Lloyd Noble
Deliveries in 2016 – Noble Lloyd Noble World’s largest jack-up for Noble Corporation Project: Harsh-environment GustoMSC CJ70 Jack-up built to Statoil’s ‘Category J’ requirements; largest in the world and first of its kind to fully comply with both Norwegian and UK regulatory standards. Delivery: Ju
Slide 8: Deliveries in 2016 – Safe Zephyrus
Deliveries in 2016 – Safe Zephyrus Delivered to Prosafe in 1Q 2016 Project: Construction of GVA 3000E DP3 Accommodation Semi-sub for Harsh-environment Operations for Charterer Det norske 8 Delivery: 1Q 2016 Operation: Norway
Slide 9: Deliveries in 2016 – FPSO Prof. John EA Mills
Deliveries in 2016 – FPSO Prof. John EA Mills Delivered to MODEC in 1Q 2016 Project: Repair and life extension, and conversion of a VLCC into a Floating Production Storage and Offloading (FPSO) vessel for Tullow Oil Delivery: 1Q 2016 9 Operation: Tweneboa-Enyenra-Ntomme (TEN ) field, Ghana
Slide 10: Deliveries in 2016 – Maersk Highlander
Deliveries in 2016 – Maersk Highlander Delivered to Maersk Highlander UK Ltd Project: Construction of F&G JU 2000E Jack-up for Harsh- environment operations in the Culzean Field Development, in UK North Sea Delivery: 2Q 2016 Operation: Culzean Field, UK North Sea 10
Slide 11: Deliveries in 2016 – Ivar Aasen PDQ platform topsides
Deliveries in 2016 – Ivar Aasen PDQ platform topsides Delivered to Det norske oljeselskap ASA, Norway Project: Engineering, Procurement and Construction of Process, Drilling and Quarters (PDQ) Platform Topsides for Ivar Aasen Development in the North Sea Delivery: 2Q 2016 11 Operation: Ivar Aasen fi
Slide 12: Other Key Activities
Other Key Activities Good progress being made on execution of current order book. Key projects include: • Engineering & construction of world’s largest semi-submersible crane vessel for Heerema; • Design and construction of Floating Storage and Offloading (FSO) vessel for MODEC; • Engineering, Procu
Slide 13: Update on Sete Brasil
Update on Sete Brasil Sete Brasil filed for judicial restructuring on April 29, 2016 and submitted its restructuring plan on August 12, 2016; continues to discuss with its creditors, shareholders and other stakeholders to find an equitable solution. We announced on April 22, 2016 that we have commen
Slide 14: Update on other drilling rig contracts
Update on other drilling rig contracts Several rigs due for delivery in our order book have been deferred. We have taken steps to protect our interests and are evaluating other courses of action, including sale to third parties. Standstill agreement with North Atlantic Drilling for the delivery of t
Slide 15: Net orderbook at S$8.4 billion
Net orderbook at S$8.4 billion Net order book reasonably robust at S$8.4 billion as at September 30, 2016. Excluding Sete Brasil projects, net order book stands at S$5.2 billion. For 9M 2016, we secured S$320 million in new orders for non- drilling solutions. In active discussions with potential cus
Slide 16: Cost Management Measures: Human Resources
Cost Management Measures: Human Resources Since start of operations of Tuas Boulevard Yard and Transformation Initiative, steps taken and ongoing to optimise human resources, build and enhance their capabilities to increase efficiency and productivity. Reallocated excess manpower from drilling to no
Slide 17: Yard Capex and Capacity Management
Yard Capex and Capacity Management Phase 2 of Tuas Boulevard Yard (TBY) scheduled for completion in 1Q 2017; we will be better positioned to optimise yard capacities. Two of our yards in Singapore will be returned to the Government during 2017. Continue to leverage and maximise utilization of TBY wh
Slide 18: Cashflow and Liquidity
Cashflow and Liquidity Majority of current S$8.4 billion order book is based on progressive payment terms. Less than 20% of order book is for drilling rigs with back-ended payment terms. Need for fresh working capital to fulfil such orders will continue to decrease. Remain committed to actively mana
Slide 19: Outlook and Prospects
Outlook and Prospects Growth prospects for offshore and marine industry remains encouraging over the long term. New yard facilities and capabilities essential to meet present and future industry needs; flagship Tuas Boulevard Yard has helped unlock new opportunities; enabled the move up the value ch
Slide 20: Strategic Acquisitions
Strategic Acquisitions Strategic acquisitions to position Sembcorp Marine for the future: Secured full ownership of PPL Shipyard by buying remaining 15% stake; enables us to fully align business management and strategies with Group. Identified market potential of gas value chain; investment in Gravi
Slide 21: Summary
Summary Continue to focus on liquidity, cost and balance sheet management; manpower requirements actively managed in line with changing needs. Adopt disciplined approach to manage costs and finances to strengthen balance sheet, ensure adequate cash liquidity and improve gearing; key priority remains
Slide 22: CFO Presentation
CFO Presentation Earnings Performance Financial Position 22
Slide 23: Financial Highlights
FINANCIAL HIGHLIGHTS Period (S$'m) 3Q 2016 3Q 2015 % change 9M 2016 9M 2015 % change Turnover 888 1,130 (21) 2,715 3,641 (25) Gross Profit 71 91 (22) 258 459 (44) EBITDA 68 107 (36) 264 454 (42) Operating Profit 33 75 (56) 158 360 (56) (Loss)/Profit before tax (18) 23 n.m. 69 294 (76) Net (Loss)/ Pr
Slide 24: 9M 2016 Turnover: S$2.7 billion
9M 2016 TURNOVER: S$2.7 billion 7,000 6,000 5,832 5,526 4,968 5,000 1,445 4,430 1,693 1,327 4,000 $ million 1,378 1,712 3,000 1,659 1,130 2,715 892 888 2,000 1,341 1,208 1,217 1,124 908 1,000 1,335 1,304 943 1,050 918 - 2012 2013 2014 2015 2016 1Q 2Q 3Q 4Q 24
Slide 25: 9M 2016 Net Profit at S$44 million
9M 2016 Net Profit at S$44 million 800 600 538 556 560 182 174 400 126 116 130 132 -290 200 49 145 122 132 109 44 11 $ million 113 119 122 106 55 0 -22 -200 -535 -400 1Q 2Q 3Q 4Q NOI -600 -800 2012 2013 2014 2015 2016 25
Slide 26: Business Review: Turnover by Segments
Business Review: Turnover by Segments 9M 2016 Turnover: $2.7 billion 9M 2015 Turnover: $3.6 billion Other Activities Offshore Other 2% Platforms Activities Offshore 20% 1% Platforms 34% Repairs & Rigs & Upgrades Floaters 11% Rigs & 51% Repairs & Floaters Upgrades 68% 13% Turnover (S$ million) 9M 201
Slide 27: Gross and operating profit margins
Gross and operating profit margins 1200 30 Operating Profit $m Gross Profit $m 24.8 Operating Profit Margin % 1000 25 Gross Profit Margin % 21.9 20.7 800 20 17.2 18.6 15.7 % margins $ million 14.5 600 15.1 15 12.8 12.5 11.4 943 11.7 12.1 862 9.5 400 10 737 707 8.9 644 554 459 200 5.8 5 158 986 1,129
Slide 28: Core Business: Repairs & Upgrades
Core Business: Repairs & Upgrades • Repairs and Upgrades revenue declined 12% year on year to $50 million on lower average revenue per vessel. Ship repair revenue ($million) 800 706 700 681 646 644 642 Year 9M 2016 9M 2015 % change 622 600 557 No. of vessels repaired 379 358 6 500 Average value per
Slide 29: Core Business: Rig Building
Core Business: Rig Building • Rig building revenue fell 60% yoy to S$740 million in 9M 2016. JACK-UP RIGS SCHEDULE Three deliveries made in 9M 2016. * Maersk Highlander to Maersk Drilling 4,000 No. of completed rigs YTD 2016 2 S$ MILLION 3779 * Noble Lloyd Noble to Noble Corp 3635 No. of projects in
Slide 30: Core Business: Floaters revenue robust
Core Business: Floaters revenue robust • Floaters revenue increased 8% yoy to $651 million in 9M 2016 • One major delivery the FPSO Prof. John EA Mills to Modec for 9M 2016. • 7 projects in work-in-progress stage. No. of Revenue – Floaters ($m) Offshore conversions projects Brief description 891 900
Slide 31: Core Business: Offshore Platforms sales in healthy uptrend
Core Business: Offshore Platforms sales in healthy uptrend • Offshore Platforms revenue increased 27% year on year to $916 million in 9M 2016 • 2 projects in work-in-progress stage. Revenue - Offshore Platforms ($m) 1,200 No. of Offshore Platforms projects Brief description 1,000 Number of projects
Slide 32: Capital, Gearing & ROE
CAPITAL, GEARING &ROE Group (S$ million) Sep-16 Dec-15 % change Shareholders' Funds 2,494 2,511 (1) Net Debt 2,615 2,751 (5) Net Working Capital 1,687 1,220 38 Return on Equity (ROE) (%) (Annualised) 2.4 (10.6) n.m Net Asset Value (cents) 119.4 120.2 (1) Return on Total Assets (ROTA) (%) (Annualised
Slide 33: Cashflow
CASHFLOW Group (S$ million) 9M 2016 9M 2015 % change Operating profit before working capital changes 245 503 (51) Net cash flow from operating activities 722 (408) n.m. Net cash flow from investing activities (342) (726) (53) Net cash flow from financing activities 531 875 (39) Cash & cash equivalen
Slide 34: New Contracts Secured by Product Type
New Contracts Secured by Product Type (9M 2016: $320 million) Contracts secured todate [excludes Repair] 12,000 Drillship 10,000 Semi-submersible/intervention/crane Jack Up Offshore Platforms 8,000 Floaters 6,999 S$ million 6,000 4,000 - 439 - 376 1,360 1,557 1,875 2,581 871 1,292 2,000 1,935 1,335
Slide 35: Net Order Book at $8.4 billion
Net Order Book at $8.4 billion Net order book by product type ($ million) 14,000 14,000 Floaters 12,728 12,337 Offshore Platforms 12,000 11,432 12,000 Jack Up 10,368 10,000 Semi-submersible 10,000 6,666 6,096 Transocean drillships 4,702 8,367 3,126 8,000 8,000 Sete Brasil drillships 3,126 1,375 6,00
Slide 36: Net order backlog by division and product type
Net order backlog by division and product type 2015 – Total $10.4 billion 2016 YTD – Total $8.4 billion Offshore Offshore Platforms Platform 13% 18% OFFSHORE Drillships 43% PLATFORMS OFFSHORE Floaters 18% PLATFORMS 16% Drillships 53% 13% Floaters RIGS & 18% RIGS & Jackup FLOATERS 4% 82% FLOATERS 87%
Slide 37: 9M 2016 Results Appendix
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Slide 38: Robust Business Model
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Slide 39: Four Key Capabilities
=) sembcorp FOUR KEY CAPABILITIES = marine 2015 & beyond... OUR FOUR KEY CAPABILITIES Through harnessing our globally-integrated design and execution capabilities, we provide turnkey solutions for complex projects © FPSO, FDPSO, FSO, FPU, FLNG, FSRU, MOPU conversions and newbuilds Product Areas: ; “
Slide 40: Leaders in offshore marine engineering solutions
Leaders in offshore marine engineering solutions 40
Slide 41: Growing non-drilling solutions - Gravifloat
Growing non- non-drilling solutions - Gravifloat Increased stake in Gravifloat to 56% after buying an additional 44% for US$38 million • Under the agreement, the Company will eventually increase its stake by a further 44% to 100% through an equity purchase at the same price. • Gravifloat was formed
Slide 42: Growing non-drilling solutions - Gravifloat
Growing non- non-drilling solutions - Gravifloat The GF Design Platform can integrate with a variety of topsides to form a unit. Each Based on either the 30,000m3 or the 60,000m3 modules the GF-SRU comprises a nearshore and scalable receiving, storage and regasification unit can operate as a standal
Slide 43: Growing new technology solutions – SSP Offshore
Growing new technology solutions – SSP Offshore Sembcorp Marine to offer new tech solutions using circular hull form with SSP Offshore • The Group signed a sales & purchase agreement with SSP Offshore to acquire substantially all its business assets for US$21 million. • Key assets of SSP Offshore in
Slide 44: Growing new design/technology solutions – LMG Marin
Growing new design/technology solutions – LMG Marin Sembcorp Marine wholly-owned subsidiary, Sembcorp Marine Integrated Yard Pte. Ltd. (“SMIY”) acquired 100% equity stake in LMG Marin AS (“LMG”) for US$20 million. LMG is a naval architecture and ship design and engineering house headquartered in Ber
Slide 45: PRPPPEEPERPEErEE PREEPEErEerreepee pert
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Slide 46: Forward-looking statements
This release may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples