S.d. Standard Etc Plc · OSL:SDSD

S.d. Standard Etc — S.D. Standard Drilling — Q2 2019 Earnings Presentation

30 slides from S.d. Standard Etc's earnings presentation, Aug 27, 2019

  1. Slide 1: S.D. Standard Drilling Plc. 2Q 2019 Presentation

    S.D. Standard Drilling Plc. 2Q 2019 Presentation 27 August 2019

  2. 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

  3. Slide 3: Agenda

    Agenda I. Highlights II. Fleet update III. Financial information 3

  4. Slide 4: Highlights Q2 2019

    Highlights Q2 2019 • Profit after tax of USD 4.6m (USD (2.7)m) (1) Utilization overview Northern Supply Standard vessels vessels, pro-rata • Total cash balance of USD 26.9m (USD 22.6m)(2) 3.500 (100% owned) (25.5% owned) Total 2.652 • Book Value of Equity of USD 118.8 m ~NOK 1.76 per share (3) 2.500

  5. Slide 5: Highlights Q2 2019 cont.

    Highlights Q2 2019 cont. • Purchase of Standard Olympus at a purchase price of USD 8.1m – Built at Havyard Ship Technology AS, Norway in 2014 – Havyard 832 design with 800m2 deck space • Sale of the remaining four (4) vessels in New World Supply Ltd (“NWS”) at levels well above SDSD’s purchase price

  6. Slide 6: Subsequent events

    Subsequent events • Distribution of USD 14.9m from NWS to SDSD – Additional distribution from NWS are considered immaterial • Cash in SDSD and subsidiaries end of July of USD 27.7m • Three (3) out of six (6) large size PSV’s on term contracts end of August 19 – From September five (5) of six (6) ves

  7. Slide 7: Competitive advantage in the current market

    Competitive advantage in the current market Modern fleet of large 1 No debt 2 Low overhead costs 3 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

  8. Slide 8: Low overhead costs and low breakeven rates

    Low overhead costs and low breakeven rates • 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, SDSD is po

  9. Slide 9: Lack of modern large size vessels available in the market

    Lack of modern large size vessels available in the market Breakdown of laid up North Sea PSV fleet (1Q19) Breakdown of laid up North Sea PSV fleet (2Q19) 50 45 12 40 35 8 Only 18 North Sea 30 Number of PSVs spec vessels in lay-up 25 47 9 20 15 11 10 5 6 0 1 Total layup >= 15 years No DP2 <700m2 >=3

  10. Slide 10: Signs of recovery – large vessels leading the way

    Both Signs of recovery – large vessels leading the way ✓ Increased tender activity ✓ Increased rig activity Large-size PSV term rates (900m2) Mid-size PSV term rates (500-750m2) 55 35 Term rates have increased by ~100% since Mar-17 Term rates have increased by ~52% since Mar-17 50 30 45 40 25 35 +10

  11. Slide 11: Signs of recovery – large vessels leading the way

    Large term/spot Signs of recovery – large vessels leading the way ✓ Increased tender activity ✓ Increased rig activity Large-size PSV term rates (900m2) Large-size PSV spot rates (900m2) 55 55 Term rates have increased by ~100% since Mar-17 Spot rates have increased by ~42% since Mar-17 50 50 45 45

  12. Slide 12: Signs of recovery – large vessels leading the way

    Medium Signs of recovery – large vessels leading the way term/spot ✓ Increased tender activity ✓ Increased rig activity Mid-size PSV term rates (900m2) Mid-size PSV spot rates (500-800m2) 40 40 Term rates have increased by ~52% since Mar-17 Spot rates have increased by ~51% since Mar-17 35 35 30 30

  13. Slide 13: Agenda

    Agenda I. Highlights II. Fleet update III. Financial information 13

  14. Slide 14: Large-size PSV vessels – 100% owned

    Large-size PSV vessels – 100% owned Standard vessels (6x) Standard Viking Standard Supplier Standard Princess Standard Supporter Standard Provider Standard Olympus (2008) (2007) (2008) (2009) (2010) (2014) Purchase price: Purchase price: Purchase price: Purchase price: Purchase price: Purchase price

  15. 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:

  16. Slide 16: Transactions in Q2 2019

    Transactions in Q2 2019 • Sale of vessels – In April 2019 NWS sold the remaining four (4) medium size vessels o Sold at significantly higher value compared to SDSD’s acquisition price o 2013 built at Damen SG yard with the 3300 CD design o Vessels have been in lay up in Norway since late 2016 o In a

  17. 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 Q2 3Q 4Q 1Q 2Q 3Q Large-size Vessels Standard Viking 2007 Peterson UK Standard Princess 2008 Allseas UK Standard Supplier 2007 Allseas UK Standard Provider 2010 Ithaca UK Standar

  18. Slide 18: Mid-size PSV vessels – Simplified contract overview

    Mid-size PSV vessels – Simplified contract overview Northern Supply vessels (25.5% owned) 2020 Vessel Built Client Country 2Q 3Q 4Q 1Q 2Q 3Q Mid-size Vessels FS Arendal 2006 Repsol UK FS Aberdour 2009 Spirit Energy UK FS Balmoral 2008 Shell UK UK FS Kristiansand 2005 Spot UK FS Braemar 2007 Peterson

  19. 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

  20. 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 %

  21. Slide 21: Combined fleet – Utilization overview

    Combined fleet – Utilization overview Combined fleet utilization 1Q17 to Jul-19 100% 90% 80% 70% 60% Utilization (%) 50% 40% 30% 20% 10% 0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Jul-19 Large-size Mid-size Note: - Vessels unavailable due to dry docking, maintenance, class renewal and othe

  22. Slide 22: Large-size PSV vessels – EBITDA overview

    Large-size PSV vessels – EBITDA overview 6x Standard vessels (100% owned) (1) Three months Three months Standard vessels (USD) ended, 2Q19 ended, 2Q18 2019 YTD 2018 YTD Net hire (net of commission) 5 833 685 3 704 545 9 968 115 7 278 898 Admin expenses (45 410) (59 982) (102 353) (122 276) Technical

  23. 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, 2Q19 ended, 2Q18 2019 YTD 2018 YTD Net hire (net of commission) 1 590 116 889 726 2 485 457 1 458 889 Admin expenses (27 813) (38 397)

  24. Slide 24: Summary – Adj. EBITDA excluding dry docking and non-recurring costs

    2Q18 vs, 2Q19 Summary – Adj. EBITDA excluding dry docking and non-recurring costs (1) Standard vessels (100% owned) and Northern Supply vessels (25.5% owned), pro-rata 2Q18 vs. 2Q19 2018 YTD vs. 2019 YTD Northern Supply Northern Supply Standard vessels vessels, pro-rata Standard vessels vessels, pro

  25. Slide 25: Explanation of the fair value accounting gain in 2Q19

    Explanation of the fair value accounting gain in 2Q19 • 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

  26. Slide 26: Agenda

    Agenda I. Highlights II. Fleet update III. Financial information 26

  27. Slide 27: Income statement

    Income statement S.D. Standard Drilling – Income statement for 2Q19 Three Months Ended Six Months Ended 2019 2018 2019 2018 (Amounts in USD 000) Q2 Q2 Q2 Q2 Unaudited Unaudited Income Changes in fair value on financial assets at fair value through profit or loss 4 674 (2 250) 7 622 (2 862) Changes i

  28. Slide 28: Balance sheet

    Balance sheet S.D. Standard Drilling – Balance sheet for 2Q19 (Amounts in USD 000) 30.06.2019 31.12.2018 ASSETS Unaudited Audited Equipment and machinery 2 1 Financial assets at fair value through profit or loss 112 206 94 966 Total non-current assets 112 208 94 967 Trade and other receivables 35 25

  29. Slide 29: Cash flow statement

    Cash flow statement S.D. Standard Drilling – Cash flow statement for 2Q19 Six Months Ended 2019 2018 Q2 Q2 (Amounts in USD 000) Unaudited Unaudited CASH FLOWS FROM OPERATING ACTIVITIES Profit/(Loss) for the period before income tax 7 547 (2 558) Unrealised exchange (gain)/loss (109) 60 Payments to f

  30. Slide 30: Gd) stanvaro DRILLING

    Gd) stanvaro DRILLING

S.D. Standard Drilling — Q2 2019 Earnings Presentation on 6ix