S.d. Standard Etc Plc · OSL:SDSD
S.d. Standard Etc — S.D. Standard Drilling — Q4 2019 Earnings Presentation
35 slides from S.d. Standard Etc's earnings presentation, Feb 13, 2020
Slide 1: S.D. Standard Drilling Plc. 4Q 2019 Presentation
S.D. Standard Drilling Plc. 4Q 2019 Presentation 13 February 2020
Slide 2: Important Information
Important Information This presentation may contain statements about future events and expectations that are forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believes”, “expects”, “anticipates”, “intends”, “es
Slide 3: Agenda
Agenda I. Highlights II. Company III. PSV Fleet update IV. VLCC investment update V. Financial information 3
Slide 4: Highlights Q4 2019 - FY 2019
4Q18/2018 4Q19/2019 Highlights Q4 2019 - FY 2019 • Loss after tax of USD 1.6m (USD 1.6m). Profit of USD 6.5m for the Operation of vessels – EBITDA adj Northern Supply full year 2019(1) Standard vessels 4Q19 vs 4Q18 vessels, pro-rata (100% owned) (25.5% owned) Total 1 000 800 • Total year end cash ba
Slide 5: Highlights cont.
Highlights cont. • Sale of two (2) large size PSV’s – Standard Provider was sold for USD 13.5m with delivery 30 Oct 2019 – Standard Supporter was sold for USD 15m with delivery 10 Dec 2019 – Realized profit of approximately USD 7m for the two vessels (1) – Reduced forward capital expenditures – Incr
Slide 6: Subsequent events
Subsequent events • The Company entered the VLCC market by acquiring 33.3% ownership in a new built ECO design VLCC-”Gustavia S” – Delivered on 23 January from the yard Daewoo Shipbuilding & Marine Engineering Co in Korea – Fitted with scrubber technology delivered by Wärtsilä – Purchase price for t
Slide 7: Agenda
Agenda I. Highlights II. Company III. PSV Fleet update IV. VLCC investment update V. Financial information 7
Slide 8: Asset Play - following the strategy
Asset Play - following the strategy Timing and executing Low(est) break-even transactions Access to opportunities Modern assets Solid cash position No debt 8
Slide 9: Competitive advantages
Competitive advantages 1 No debt 2 Low overhead costs 3 Modern fleet of vessels 4 Independent position Low-cost and flexible Modern fleet and attractive No interest cost Good cash position structure tech. spec Outsourced operational No amortization High vessel utilization Positive EBITDA management
Slide 10: Agenda
Agenda I. Highlights II. PSV Fleet update III. VLCC investment update IV. Financial information 10
Slide 11: No modern large size vessels to be easily reactivated
No modern large size vessels to be easily reactivated Breakdown of laid up North Sea PSV fleet (3Q19) Breakdown of laid up North Sea PSV fleet (4Q19) 50 45 40 35 Only 11 North Sea Only 9 North Sea spec 30 spec vessels laid up, Number of PSVs 8 vessels in lay-up – all of which only 1 is costly to rea
Slide 12: Passed the bottom - large size vessels leading the way
Passed the bottom - large size vessels leading the way Large-size PSV term rates (900m2) Large-size PSV spot rates (900m2) 55 55 Term rates have increased by ~99% since Mar-17 50 50 45 45 40 40 35 +99% 35 USD ('000) USD ('000) 30 30 25 25 Last 10yr avg. ~USD 19.0k/d 20 20 Last 5yr avg. USD ~9.8k/d C
Slide 13: Improvement also in the medium size segment
Improvement also in the medium size segment Mid-size PSV term rates (500-749m2) Mid-size PSV spot rates (500-899m2) 40 40 Term rates have increased by ~64% since Mar-17 35 35 30 30 +64% 25 25 USD ('000) USD ('000) 20 20 Last 5yr avg. USD ~9.1k/d 15 Last 10yr avg. USD ~13.7k/d 15 Current market rate
Slide 14: Large-size PSV vessels – 100% owned
Large-size PSV vessels – 100% owned Standard vessels (4x) Sales in 2019 Standard Viking Standard Supplier Standard Princess Standard Olympus Standard Provider Standard Supporter (2008) (2007) (2008) (2014) (2010) (2009) Purchase price: Purchase price: Purchase price: Purchase price: Purchase price:
Slide 15: Mid-size PSV vessels – Partly owned
Mid-size PSV vessels – Partly owned Northern Supply vessels (8x) – 25.5% owned 2x vessels 2x vessels 2x vessels 2x vessels Purchase price: Purchase price: Purchase price: Purchase price: ~USD 2.5m(1) ~USD 2.5m(1) ~USD 5.4m(1) ~USD 5.9m(1) Ownership: 25.5% Ownership: 25.5% Ownership: 25.5% Ownership:
Slide 16: Low overhead costs and low breakeven rates
Low overhead costs and low breakeven rates [slette?] • Average cash break-even for SDSD, all-in costs (USD / Day) for PSV vessels – Large-size: USD ~7,000 per day (1) – Mid-size: USD ~6,700 per day (1) • Overhead cost of ~USD 500 per vessel per day (1) • With competitive cost, all equity and no debt
Slide 17: Large-size PSV vessels – Simplified contract overview
Large-size PSV vessels – Simplified contract overview Standard vessels (100% owned) 2019 2020 Vessel Built Client Country Q3 Q4 Q1 Q2 Q3 Q4 Large-size Vessels Standard Viking 2007 Peterson UK Standard Princess 2008 Spot UK Standard Supplier 2007 TBN UK Standard Provider 2010 N/A Standard Supporter 2
Slide 18: Mid-size PSV vessels – Simplified contract overview
Mid-size PSV vessels – Simplified contract overview Northern Supply vessels (25.5% owned) 2019 2020 Vessel Built Client Country Q3 Q4 Q1 Q2 Q3 Q4 Mid-size Vessels FS Arendal 2006 Repsol UK FS Aberdour 2009 Spirit Energy UK FS Balmoral 2008 TBN UK FS Kristiansand 2005 Fletcher Offshore Ltd UK FS Brae
Slide 19: Large-size PSV vessels – Utilization overview
Large-size PSV vessels – Utilization overview Historical utilization of operating vessels (%) Weighted Utilization S.Viking S. Princess S. Supplier S.Provider S. Supporter S. Olympus average 1Q18 100 % 100 % 65 % 100 % 100 % n.a. 93 % 2Q18 100 % 73 % 98 % 100 % 99 % n.a. 95 % 3Q18 100 % 81 % 61 % 88
Slide 20: Mid-size PSV vessels – Utilization overview
Mid-size PSV vessels – Utilization overview Historical utilization of operating vessels (%)(1) FS FS FS FS FS FS FS FS Weighted Utilization Aberdour Arendal Balmoral Kr. Sand Braemar Carrick Crathes Aberg. average 1Q18 100 % 99 % 100 % 100 % 69 % n.a. n.a. n.a. 98 % 2Q18 100 % 100 % 63 % 100 % 100 %
Slide 21: Combined fleet – Utilization overview
Combined fleet – Utilization overview large-and medium size PSV’s Combined fleet utilization 1Q17 to Jan-20 100% 90% 80% 70% 60% Utilization (%) 50% 40% 30% 20% 10% 0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Jan-20 Large-size Mid-size Standard vessels Northern Supply (100% owned)
Slide 22: Large-size PSV vessels – EBITDA overview
Large-size PSV vessels – EBITDA overview 4x Standard vessels (100% owned) (1) Three months Three months Standard vessels (USD) ended, 4Q19 ended, 4Q18 2019 2018 Net hire (net of commission) 4 037 510 4 456 512 20 889 109 15 421 401 - - - Admin expenses (62 544) (66 770) (267 813) (235 195) Technical
Slide 23: Mid-size PSV vessels – EBITDA overview
Mid-size PSV vessels – EBITDA overview 9x Northern Supply vessels (25.5% owned) (1), pro-rata overview Three months Three months Northern Supply vessels (USD) ended, 4Q19 ended, 4Q18 2019 2018 Net hire (net of commission) 1 056 695 820 431 4 978 926 3 331 397 - - - Admin expenses (28 368) (28 746) (
Slide 24: Summary – Adj. EBITDA excluding dry docking and non-recurring costs
Summary – Adj. EBITDA excluding dry docking and non-recurring costs (1) Standard vessels (100% owned) and Northern Supply vessels (25.5% owned), pro-rata 4Q18 vs. 4Q19 Full year 2018 vs. 2019 Northern Supply Northern Supply Standard vessels vessels, pro-rata Standard vessels vessels, pro-rata (100%
Slide 25: Explanation of the fair value accounting gain in 4Q19
Explanation of the fair value accounting gain in 4Q19 • SDSD is classified as an investment entity in accordance with IFRS 10 – Investments, including subsidiaries, are not consolidated but measured at fair value through profit and loss every quarter based on estimates made by reputable independent
Slide 26: Agenda
Agenda I. Highlights II. PSV Fleet update III. VLCC investment update IV. Financial information 26
Slide 27: Specification of the VLCC «Gustavia S»
Specification of the VLCC «Gustavia S» • Builder : Daewoo Shipbuilding & Marine Engineering • Built : January 2020 • Ship Type: Oil Tanker • Classification Society: DNVGL • Class Notations : +1A Tanker for oil, BIS, BWM (T), Clean, CMON, COAT-PSPC(B,C), CSR, E0, ESP, LCS, NAUT (NAV), Recycable, SPM,
Slide 28: VLCC supply
VLCC supply VLCC age profile, fleet ~800 vessels (excl orderbook) VLCC fleet growth 9% of 8% of fleet 15% of fleet 77% of fleet existing fleet Fleet ≥20 yrs Aging asset profile combined and low net fleet growth Source: Clarksons Platou Securities Research, Clarksons Platou Shipbrokers 28
Slide 29: VLCC demand
VLCC demand VLCC NB parity VLCC values last 5 years 120 100 % 110 106,0 80 % 100 100 60 % 90 0,1% 40 % 80 80 USDm 77,0 20 % USDm 60 0% 70 -20 % 52,0 60 40 -40 % 36,0 50 -60 % 20 15,2% 23,0 17 40 -80 % -15,9% -23,1% -27,5% 0 -100 % 30 Age VLCC VLCC VLCC scrap Premia (%) NB parity Newbuild 5 Yr old 10
Slide 30: VLCC earnings
VLCC earnings VLCC spot earnings (USD/day) VLCC 1 year TC dayrate 180 90 160 80 70 USD 64k/day 140 120 60 USD 15k/day delta USDk/day USDk/day 100 50 USD 49k/day 80 40 60 30 40 20 20 10 0 0 5 year high/low Avg. 2015-2019 2019 2020 Last spot VLCC 1yr TC VLCC 1yr TC Scrubber Eco Source: Clarksons Plato
Slide 31: Agenda
Agenda I. Highlights II. PSV Fleet update III. VLCC investment update IV. Financial information 31
Slide 32: Income statement
Income statement S.D. Standard Drilling – Income statement for 4Q19 Three Months Ended Twelve Months Ended 2019 2018 2019 2018 (Amounts in USD 000) Q4 Q4 Q4 Q4 Unaudited Audited Income Changes in fair value on financial assets at fair value through profit or loss (1 852) 2 303 6 801 (694) Changes in
Slide 33: Balance sheet
Balance sheet S.D. Standard Drilling – Balance sheet for 4Q19 (Amounts in USD 000) 31.12.2019 31.12.2018 ASSETS Unaudited Audited Equipment and machinery 1 1 Financial assets at fair value through profit or loss 76 751 94 966 Total non-current assets 76 752 94 967 Trade and other receivables 10 25 C
Slide 34: Cash flow statement
Cash flow statement S.D. Standard Drilling – Cash flow statement for 4Q19 Twelve Months Ended 2019 2018 Q4 Q4 (Amounts in USD 000) Unaudited Audited CASH FLOWS FROM OPERATING ACTIVITIES Profit/(Loss) for the period before income tax 6 542 (1 235) Unrealised exchange (gain)/loss 117 698 Other (gains)
Slide 35: Gd) stanvaro DRILLING
Gd) stanvaro DRILLING
S.D. Standard Drilling — Q4 2019 Earnings Presentation on 6ix