Transportadora De Gas Del Sur Sa Class B · BCBA:TGSU2
Transportadora De Gas Del Sur Sa Class B — TGS — Q4 2021 Earnings Presentation
37 slides from Transportadora De Gas Del Sur Sa Class B's earnings presentation, Feb 10, 2022
Slide 1: Q4 2021 Financial Results
Q4 2021 Financial Results Kristian Johansen Sven Børre Larsen CEO CFO 10 February 2022
Slide 2: Forward-looking Statements
Forward-looking Statements All statements in this presentation other than statements of historical fact, are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may no
Slide 3: Highlights
Highlights • Q4 2021 net revenues of USD 120 million (segment) • Late sales USD 83 million • Pre-funding USD 25 million • Proprietary sales 12 million • Strong Q4 2021 order inflow of more than USD 160 million • Backlog at USD 90 million end of Q4 2021 compared to USD 47 million end of Q3 2021 • Rob
Slide 4: Operational Highlights
Operational Highlights
Slide 5: Investment Activity – Europe
Investment Activity – Europe • The NOAKA OBN is part of TGS’ strategy to provide next generation seismic data in ILX area of the NCS • First season of NOAKA OBN completed in October 2021 • TGS successfully acquired approximately 300 sq km or 2/3 of the full program • Data is in processing and will b
Slide 6: Investment Activity – Asia Pacific
Investment Activity – Asia Pacific • Significant growth in energy demand expected in Asia Pacific region over coming decades • Sarawak Phase 1 3D commenced late October 2021 and will cover an area of up to 8,609 sq km in partnership with TGS, Schlumberger and PGS • 9,024 sq km broadband 3D reprocess
Slide 7: Investment Activity – Africa
Investment Activity – Africa • Red Sea 3D commenced December 2021 and will cover an area of approximately 6,000 sq km in partnership with Schlumberger • Gas demand for local energy needs and export market driving activity in Egypt • Multiple IOCs active in region that also benefits from a stable inv
Slide 8: Investment Activity – Latin America
Investment Activity – Latin America • Multi-client 3D survey in Suriname in a consortium with CGG and BPG • Phase 1 includes 11,100 sq km of new 3D and 3,000 sq km reprocessing • Potential for additional phases subject to client interest • Suriname’s offshore acreage includes 3 blocks recently award
Slide 9: Investment activity – U.S. Gulf of Mexico
Investment activity – U.S. Gulf of Mexico • Engagement 2 is the next phase GoM Ocean Bottom Node (OBN) survey (continuing Amendment and Engagement I). • Data acquisition began in 2021 and will complete March 2022. • The combination of ultra-long offset OBN data and Full Waveform Inversion, is provin
Slide 10: Status US GoM Lease Sales
Status US GoM Lease Sales US GOM GHG emission1 vs other basins • Lease Sale 257 held on November 17, 2021, has been formally vacated by the judge • Interior to carry out New National Environmental Policy Act (NEPA) analysis and then go through the lease sale process again • Key issue is to prove con
Slide 11: Progressing on New Energy Solutions Strategy
Progressing on New Energy Solutions Strategy 4C Offshore Y/Y growth order inflow 60% 53% 50% 47% 40% 30% 20% 10% 0% Q4 21 2021 • 4C Offshore continue to outperform expectations – growth of 53% order inflow in Q4 21 • Completed the Southern USA CO₂ storage atlas in collaboration with Canadian Discove
Slide 12: TGS' Industry-Leading ESG Performance
TGS’ Industry-Leading ESG Performance NEW Sustainalytics State Street Since 2016, TGS has been committed to the UN Global Compact corporate ESG Risk Rating responsibility initiative and its principles Global Advisors #1 in our industry, in the areas of human rights, labour, Top Rated as a “Leader” e
Slide 13: Financials
Financials
Slide 14: Segment and IFRS reporting
Segment and IFRS reporting • The accounting standard IFRS 15 regarding revenue recognition implemented from 1 January 2018 • Recognition of revenues related to multi-client projects postponed until projects are delivered to customers • No amortization until completion of the project • No impact on s
Slide 15: Net Revenues
Net Revenues Segment reporting Pre-funding revenues Late sales 90 120 80 100 70 60 80 MUSD 50 MUSD 60 40 83 103 30 40 83 63 55 61 20 38 20 45 10 25 22 25 36 33 17 13 14 0 0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
Slide 16: Operating expenses, operating result and MC investments
Operating expenses, operating result and MC investments Segment reporting Operating expenses1 Amortization and impairments 30 180 160 25 140 20 120 100 15 80 168 167 26 MUSD 142 MUSD 24 24 24 131 22 20 60 10 17 86 14 40 67 5 52 52 20 0 0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 202
Slide 17: Strong cash flow and robust balance sheet
Strong cash flow and robust balance sheet Free Cash Flow (FCF)2 and FCF Conversion rate2 Net cash 250 60% 350 53% 300 320 226 50% 200 250 271 40% 256 247 150 168 163 200 215 30% 193 MUSD MUSD 29% 191 123 150 100 25% 117 163 91 20% 19% 20% 18% 100 50 63 10% 10% 50 3% 0 14 0% 0 2014 2015 2016 2017 201
Slide 18: Restatement of prior period accounts
Restatement of prior period accounts • TGS has substantial activity in Latin America following the acquisition of Spectrum in 2019 • Latin America is subject to complex tax and regulatory framework • Following a thorough review TGS has found it advisable to amend parts of the historical accounting p
Slide 19: Income Statement
Income Statement Segment reporting (MUSD) Q4 2021 Q4 2020 Change Net operating revenues 119.5 120.3 -1% Cost of goods sold 8.5 2.5 236% Personnel cost 14.2 7.8 82% Other operational costs 12.7 6.0 111% EBITDA 70% 84.0 103.9 -19% Amortization of multi-client library 167.0 167.9 -1% Depreciation 4.8 4
Slide 20: Balance Sheet
Balance Sheet Segment reporting Balance sheet Q4 2021 Q4 2020 Change Goodwill 304.0 288.4 5% Multi-client library 506.5 646.7 -22% Deferred tax asset 71.1 44.8 59% Other non-current assets 89.8 114.1 -21% Total non-current assets 971.4 1,094.0 -11% Cash and cash equivalents 215.3 195.7 10% Other cur
Slide 21: Cash Flow Statement
Cash Flow Statement Q4 2021 Q4 2020 Change (All amounts in USD 1,000s unless noted otherwise) Cash flow from operating activities: Received payments from customers 151,497 115,866 31% Payments for salaries, pensions, social security tax -10,736 -15,279 -30% Payments of other operational costs -24,04
Slide 22: Dividends and Share Buybacks
Dividends and Share Buybacks Dividend per share1 Dividend yield2 1.6 6.0 % NOK 8.5 5.4 % NOK 8.0 5.2 % 1.4 4.9 % 5.0 % NOK 8.5 4.5 % 4.6 % 1.2 USD 1.08 4.0 % 3.9 % 4.0 % NOK 6.0 4.0 % 3.7 % USD per share 1.0 NOK 5.0 3.5 % 3.6 % USD 0.8 USD 0.75 2.8 % 2.6 % 0.8 3.0 % NOK 4.0 USD 0.6USD 0.6 USD 0.56 0
Slide 23: Market Outlook
Market Outlook
Slide 24: Several signs of improving market conditions
Several signs of improving market conditions High oil and gas prices Improved order inflow Increasing E&P spending budgets Exploration economics at attractive levels Improving license round activity See the energy at TGS.com - 24 -
Slide 25: High oil and gas prices
High oil and gas prices Brent oil price Dutch TTF Natural Gas 100 200 90 180 80 160 70 140 60 120 EUR USD 50 100 40 80 30 60 20 40 10 20 0 0 See the energy at TGS.com - 25 -
Slide 26: Strong order inflow
Strong order inflow Revenue backlog 200 • Contract inflow of more than USD 160 million 181 during Q4 2021 180 160 160 140 • Further commitments received on several 130 projects 117 120 112 • NOAKA OBN, Norway 102 MUSD 100 98 89 90 • Sarawak 3D, Malaysia 80 82 77 • Suriname 3D, Suriname 60 • Engageme
Slide 27: Increasing E&P spending budgets
Increasing E&P spending budgets Cash flow 10 integrated oil companies1 • E&P companies are generating record-high free 350 cash flow 300 • High oil and gas prices 250 • Low cost base 200 • Low investments USD bn 150 100 • Expectations of substantial increase in E&P spending in 2022 50 - • Announced
Slide 28: Exploration economics at attractive levels
Exploration economics at attractive levels • E&P spending yet to recover from pandemic related Oil price vs exploration costs1 cuts conducted in 2020 160 140 • Value proposition of exploration at attractive levels 120 • High oil price • Low cost of exploration related services 100 USD/bbl 80 • Conti
Slide 29: Improving License Round Activity
Improving License Round Activity Europe Norway: • 2021 APA round – Q1 2022 (offers) • 2022 APA round – Q2 2022 (open) Africa North America Angola: US GOM: • 2021 round – May 2022 (awards) • Lease Sale 258 – H1 2022 (close) • 2023 round – 8 blocks • 2025 round – 10 blocks Canada: • Flemish Pass/Grand
Slide 30: Guidance 2022
Guidance 2022 Indicative distribution of 2022 multi-client • Multi-client investments of approximately USD investments 200 million, with a pre-funding rate higher than in 2021 Q1 ~20% • Continued outperformance on cash flow and ROACE H2 ~60% Q2 ~20% • Industry-leading distribution to shareholders Se
Slide 31: Summary
Summary • Q4 2021 net revenues of USD 120 million (segment) • Late sales USD 83 million • Pre-funding USD 25 million • Proprietary sales 12 million • Strong Q4 2021 order inflow of more than USD 160 million • Backlog at USD 90 million end of Q4 2021 compared to USD 47 million end of Q3 2021 • Robust
Slide 32: Questions & Answers
Questions & Answers
Slide 33: Appendix
Appendix
Slide 34: Income Statement
Income Statement IFRS (MUSD) Q4 2021 Q4 2020 Change Net operating revenues 104.7 142.9 -27% Cost of goods sold 8.5 2.5 236% Personnel cost 14.2 7.8 82% Other operational costs 12.7 6.0 111% EBITDA 66% 69.2 126.5 -45% Amortization of multi-client library 165.2 147.3 12% Depreciation 4.8 4.0 20% Opera
Slide 35: Balance Sheet
Balance Sheet IFRS Balance sheet Q4 2021 Q4 2020 Change Goodwill 304.0 288.4 5% Multi-client library 704.9 965.6 -27% Deferred tax asset 80.2 88.6 -9% Other non-current assets 89.8 114.1 -21% Total non-current assets 1,178.9 1,456.7 -19% Cash and cash equivalents 215.3 195.7 10% Other current assets
Slide 36: Reconciliation Between Segment and IFRS
Reconciliation Between Segment and IFRS Perform ance Q4 2021 obligations m et In progress Q4 2021 (All amounts in USD 1,000s) IFRS during the quarter projects Segm ent Revenues 104,661 -39,890 54,731 119,503 Amortization and impairment of multi-client library 165,236 -33,522 35,271 166,985 Exchange
Slide 37: Multi-Client Library
Multi-Client Library Segment reporting Net Book Value - Multi-Client Library 1,000 800 600 MUSD 400 856 804 780 647 618 605 609 507 200 - Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Investments and NBV by year of completion 1) Q4 2021 Net Revenues and NBV by year of completion Q4