Bumi Armada Bhd. · MYX:ARMADA
Bumi Armada Bhd — Q1 2014 Earnings Presentation
37 slides from Bumi Armada Bhd's earnings presentation, May 23, 2014
Slide 1: Analyst Briefing
BUMI ARMADA BERHAD Analyst Briefing 23rd May 2014 “Knots Ahead of the Rest”
Slide 2: Disclaimer
Disclaimer This document is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may not be offered or sold in the United States, except pursuant to an
Slide 3: Safety and Operational Excellence
Safety and Operational Excellence “Safety is everyone's business” Source: The Telegraph Media Group Ltd Source: Upstreamonline.com The Macondo blowout knots ahead of the 2 2 rest
Slide 4: Table of contents
Table of contents 1) Transaction overview 2) Financial highlights 3) Company overview 4) Strategy in motion 5) Appendix: Sector outlook 3
Slide 5: 1. Transaction overview
1. Transaction overview “Knots Ahead of the Rest”
Slide 6: Overview of transaction
Overview of transaction Transaction parameters for the Proposed Bonus Issue and Proposed Rights Issue Issuer Bumi Armada Berhad (“BAB”, ”Company” or the “Issuer”) Bonus issue of 1 new share for every 2 existing shares held Rights issue of 1 new share for every 2 existing shares held (calculated base
Slide 7: Transaction rationale
Transaction rationale Proposed Rights Issue Raise equity capital for Bumi Armada and strengthen its capital base Raise funds without incurring interest expenses as compared to bank borrowings Improve liquidity and financial flexibility as well as optimise capital structure by strengthening its finan
Slide 8: Use of Proceeds
Use of Proceeds BAB’s expected capital expenditure of RM6.0 billion over the next 12 – 18 months will be funded via a combination of cashflow from operations, existing cash balances, contractual down payments, proceeds from the Proposed Rights Issue and new debt Use of Proceeds Estimated timeframe R
Slide 9: 2. Financial highlights
2. Financial highlights “Knots Ahead of the Rest”
Slide 10: Key takeaways
Key takeaways Historical record order book at RM22.2 billion with good profitability (comprising RM13.3 billion on firm and RM8.9 billion on extensions) − Including Eni Angola Block 15/06 LOI contract indicative value of RM9.5bn (US$2.9bn), order book increases to RM31.7 billion − Angola Eni 15/06 L
Slide 11: Order book as at 31 March 2014
Order book as at 31 March 2014 Quality firm backlog of RM13.3 bn Including Eni Angola Block 15/06 LOI contract indicative value of RM9.5bn (US$2.9bn), total order book increases to RM31.7 billion Firm contract period Optional extension period The breakdown of order book with firm contract The breakd
Slide 12: Strong order book growth since IPO
Strong order book growth since IPO (in RM’mil) 35 31.7 30 25 22.1 22.2 1.6 1.5 20 3.4 3.9 15 12.2 12.7 11.8 10.3 10 10.1 10.6 10.5 10.7 1.4 1.8 1.3 10 1.3 1.1 1.7 1.6 1.5 2.2 2 2.2 1.3 1.5 1.4 1.9 1.8 2.1 2 17.1 16.8 5 7.5 7.3 7.2 8.6 8.5 8.7 7.1 7.1 6.8 0 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q
Slide 13: Results Overview – Q1 2014 vs. Q1 2013
Results Overview – Q1 2014 vs. Q1 2013 (in RM’mil) Revenue EBITDA 488.8 -4.1% 468.9 -12.1% Net Profit* 253.8 223.1 109.7 -40.9% 64.8 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Lower revenue from: • FPSO tankers Lower EBITDA in line with: • T&I activities in the Caspian & • Lower utilisation sustained by Hawk Q
Slide 14: Revenue composition by business units
Revenue composition by business units (in RM’mil) Performance in established segments driven by the underlying activities FPSO OSV +1.8% +9.7% 192.3 195.7 156.2 142.4 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Additional contribution from Kraken FPSO New OSV vessels (Armada Tuah contract, offset by lower FPSO
Slide 15: Revenue composition by geographical %
Revenue composition by geographical % Malaysia based international company continued expansion across key regions Q1 2013 Q1 2014 5% 16% 5% 12% 31% 34% 48% 49% 14
Slide 16: Leverage and capitalization
Leverage and capitalization Financial capacity intact to undertake more projects Net Debt / EBITDA(1) Gearing ratio(2) 4.0x 5.1x 3.9x 4.9x 4.8x 3.4x 4.0x 3.2x 2.3x 1.9x 1.6x 1.0x 0.9x 0.9x 0.7x 0.7x 2008 2009 2010 2011 2012 2013 Q1 2014 Pro (3) 2008 2009 2010 2011 2012 2013 Q1 Pro (3) forma 2014 for
Slide 17: 3. Company overview
3. Company overview “Knots Ahead of the Rest”
Slide 18: Integrated Offshore Oilfield Services Provider
Integrated Offshore Oilfield Services Provider BUSINESS STREAMS Floaters Floating Production, FPSO Storage and Offloading GDT Gas Development and Technology Services OSV Offshore Support Vessels OFS Oilfield Services T&I Transport and Installation ENABLERS E&T Engineering and Technology Major AMO As
Slide 19: Global Execution Local Delivery
Global Execution Local Delivery Integrated Offshore Oilfield Services Provider Kraken Field - FPSO Under Conversion Armada Installer, DLB FPSO Armada Sterling FPSO Armada TGT1 Armada Hawk RUSSIA Aberdeen UNITED KINGDOM London Astrakhan TURKMENISTAN Turkmenbashi UNITED STATES Ashgabat SAUDI Houston A
Slide 20: Target to be 4th largest FPSO player
Target to be 4th largest FPSO player Expanding FPSO operator with target to be the 4th largest by fleet size 18 16 14 5 12 4 10 1 8 14 3 6 12 4 9 9 1 1 2 5 5 4 3 3 3 1 0 1 Existing vessels Expected new vessels Number of operational FPSO by selected FPSO lease owners Note: Bumi Armada figure includes
Slide 21: 4. Strategy in motion
4. Strategy in motion “Knots Ahead of the Rest”
Slide 22: Bumi Armada's success story
Bumi Armada's success story Bumi Armada success story Malaysian league Premier league Champions league ~10 years ago ~5 years ago Today • Predominantly • Dramatic change of • Expansion in new focused on the route to achieve business segments and domestic market profitable growth geographies
Slide 23: BAB has evolved its business to offer an integrated suite of oil field services
BAB has evolved its business to offer an integrate suite of oil field services BA core business: Today FPSO Pre-2000: Pre-IPO • Local Malaysian OSV player Pre-2000 >100kboe/d • ~10 light vessels ≥75kboe/d • No FPSOs OSV T&I ≥50kboe/d Other services Premium (well interv.) Pre-IPO: <50kboe/d SURF/Subs
Slide 24: BAB's success can be attributed to its unique competitive advantage
But BAB’s success can be attributed to its unique competitive advantage CAPITAL PROJECT REPUTATION AND MANAGEMENT RELATIONS • Strong execution planning • Strong reputation • Project management skills • Know-who in the industry INTEGRATED APPROACH BIDDING SKILLS Sell • Collaboration with contract Bui
Slide 25: BAB's 2020: From Volume to Value
BAB’s 2020: From Volume to Value FUEL “GROWTH” ENGINE SYNERGIC EXPANSION SUSTAIN THE GROWTH Floaters OSV T&I OFS “Further, Deeper, Harsher” “Infrastructure” “Well lifecycle support” • FPSO • Focus on • Maintain position • Prioritize light, ‘riserless’ intervention - Selectively protect small & premi
Slide 26: An integrated model also reinforces synergies and competitive advantage
An integrated model also reinforces Synergy legend synergies and BAB’s competitive advantage Fully captured today Partially captured today DIVISIONAL SYNERGIES COMPETITIVE ADVANTAGES FLOATERS/OSV FLOATERS/OFS • OSVs provides intelligence • OFS needed in BAB’s before FPSO’s bid in newer FPSOs (partic
Slide 27: Executing on this strategy will improve the overall positioning of Bumi Armada
Executing on this strategy will improve the overall positioning of Bumi Armada BA core business: Pre-2000: BAB 2020? • Local Malaysian OSV player Floaters Today • ~10 light vessels Pre-IPO • No FPSOs FLNG & FSRU Pre-2000 OFS & Construction Pre-IPO: >100Kboe Services OSV FPSO • Regional expansion in
Slide 28: Appendix: Sector outlook
Appendix: Sector outlook “Knots Ahead of the Rest”
Slide 29: In The News
CS Email oa ~ oe US. Shale Whe Boom a Bubble? Commen ts 5 Email © Print KT O gatiow © 0" By Eric Roston May 21, 201 44:48 AM GMT+0900 | 8 28
Slide 30: Leading Indicators – Oil Price
Leading Indicators – Oil Price Traded between US$ 90-120/bbl with 3 year average around US$ 100/bbl Source: Bloomberg 29
Slide 31: Leading Indicators - Steel price
Leading Indicators - Steel price Prices have remained steady Conducive for conversion projects and newbuilds Source: Bloomberg 30
Slide 32: Second-hand tanker prices
Second-hand tanker prices Second-hand tanker prices have started to creep up Close monitoring needed to control capex and inflation Second-hand tanker price index Index (Jan'00 = 100) 270 250 230 210 190 170 150 130 110 90 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11
Slide 33: Costs control will be critical
Costs control will be critical Capex and opex costs have effectively more than doubled over the last 10 years Uptrend will continue HIS CERA Upstream Capital Cost Index HIS CERA Upstream Operating Cost Index Index Index Q3 2012 240 240 230 220 220 200 200 Q3 2012 190 180 180 160 160 140 140 120 120
Slide 34: E&P Spending By Company Type
E&P Spending By Company Type • Independents and NOC have the highest spending growth in 2013 • Over the last 5 years Independents have increased spending at the highest rate 33
Slide 35: Conventional Exploration by Company Type & Water Depth
Conventional Exploration by Company Type & Water Depth 2013 new field resources by company type Percentage of annual volumes by water depth and average deepwater discovery size 100% 400 NOC 90% 360 Percentage of discovered volumes 80% 320 Others 25% Average discovery size 33% 70% 280 60% 240 50% 200
Slide 36: FPSO Generations
FPSO Generations Vessel Name Generation Vessel Size Topsides Turret / Spread Weight Armada Perkasa Panamax <2,500 Spread 1 Armada Perdana Suezmax <5,000 Spread 2 Armada Sterling Aframax <7,500 Internal Armada Clair Suezmax <7,500 External Dis- 3 connectable Armada Sterling II Aframax <7,500 Internal
Slide 37: Thank you
Thank you “Knots Ahead of the Rest”