Awilco Lng Asa · OSL:ALNG
Awilco Lng Asa — Q4 2019 Earnings Presentation
24 slides from Awilco Lng Asa's earnings presentation, Feb 28, 2020
Slide 1: Q4 2019
Q4 2019 28 February 2020 CEO Jon Skule Storheill CFO Øyvind Ryssdal www.awilcolng.no -1-
Slide 2: Disclaimer
Disclaimer This presentation may include certain forward-looking statements, forecasts, estimates, predictions, influences and projections regarding the intent, opinion, belief, various assumptions or current expectations of Awilco LNG (the “Company”) and it’s management with respect to, among other
Slide 3: Company overview
Company overview Awilco LNG is a fully integrated pure play LNG transportation provider, owning and operating LNG vessels. The Company currently owns two 2013-built 156,000 cbm TFDE membrane LNG vessels, WilForce and WilPride. Awilco LNG is listed on Oslo Axess under the ticker code ALNG. www.awilco
Slide 4: Agenda
Agenda 28/02 2020 1. Highlights 2. Financials Q4 3. Market update 4. Summary www.awilcolng.no -4-
Slide 5: 4th quarter and full year highlights
4th quarter and full year highlights 4th quarter 2019 Net freight income MUSD 16.3 6.3 in Q3 2019 EBITDA MUSD 13.0 7.4 in Q3 2019 Net profit/(loss) MUSD 4.7 (1.1) in Q3 2019 • All-time high EBITDA • TCE* USD 88,200 pd (USD 60,400 pd in Q3 2019) Full year 2019 Net freight income MUSD 33.7 MUSD 34.8 i
Slide 6: Excellent commercial track record
Excellent commercial track record TCE USD pd 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2020 Q1 (F) ALNG 46,200 31,100 60,400 88,200 58,900 70,000 TFDE # 1 38,400 26,500 36,000 66,400 41,800 55,000 TFDE # 2 39,300 24,400 35,200 77,000 44,400 60,000 MEGI 42,600 46,300 58,200 94,000 62,400 70,000 • Earnings
Slide 7: Refinancing completed
Refinancing completed ✓ Sale/leaseback facility fully executed early January 2020 with CCB Financial Leasing ✓ Full take out of previous sale/leaseback facilities – net negative cash effect abt MUSD 3.6 after costs ✓ Annual finance cost expected reduced by abt MUSD 7.0 at current forward Libor ✓ Att
Slide 8: Agenda
Agenda 28/02 2020 1. Highlights 2. Financials Q4 3. Market update 4. Summary www.awilcolng.no -8-
Slide 9: Q4 2019 income statement
Q4 2019 income statement USD million Q4’19 Q3’19 2019 2018 Freight income 17.2 6.7 37.1 40.0 Voyage related expenses (0.9) (0.4) (3.4) (5.1) Net freight income 16.3 6.3 33.7 34.8 Other income (0.1) 4.8 11.6 4.0 Operating expenses (1.9) (2.9) (16.4) (12.5) Administration expenses (1.2) (0.8) (3.7) (3
Slide 10: Q4 2019 financial position
Q4 2019 financial position USD million 31.12.19 30.09.19 31.12.18 Vessels (right-of-use assets) 350.0 353.3 362.1 Total non-current assets 350.0 353.3 362.1 Trade receivables 0.1 0.1 2.7 Other short term assets 3.7 9.7 6.1 Cash and cash equivalents 23.5 14.0 22.5 Total current assets 27.3 23.8 31.4
Slide 11: Q4 2019 cash flow
Q4 2019 cash flow USD million Q4’19 Q3’19 2019 2018 Cash Flows from Operating Activities: Profit/(loss) before taxes 4.7 (1.1) (8.3) (11.4) Income taxes paid - - - - Interest and borrowing costs expensed 5.1 5.2 20.7 21.5 Depreciation, amortisation and impairment 3.3 3.3 13.0 13.0 Trade receivables,
Slide 12: Agenda
Agenda 28/02 2020 1. Highlights 2. Financials Q4 3. Market update 4. Summary www.awilcolng.no - 12 -
Slide 13: Spot rates
Spot rates USD/DAY 200 000 180 000 160 000 140 000 120 000 100 000 80 000 60 000 40 000 20 000 - Avg. spot rate 138-145k ST Avg. spot rate 155-165k TFDE Historic ave. spot rate 138-145k ST Historic ave. spot rate 155-165k TFDE • Mild weather and well stocked inventories reducing LNG- and shipping de
Slide 14: What's going on?
What’s going on? GLOBAL LNG TRADE JANUARY 2020 vs HISTORY MT LNG 95 90 85 80 75 70 2017 2018 2019 • LNG trade up 11 % / 36 MT in 2019 to 361 MT • Warmest January the last 40 years* • Doubling since 2009 • Cherry blossom in Tokyo expected to start 16 March – 2.5 • 28 MTPA new liquefaction capacity ad
Slide 15: Black swan
Black swan COVID-19 CASES AS OF 27 FEB 2020 • 82,168 confirmed cases - 96 % in China • 2,801 fatalities - 57 outside China • Jan 2020: China’s natural gas consumption down 1 % and gas imports down 3.2 % • Industrial demand down 14 % • Power demand down 10 % • Force majeures? • Cargo diversions? • Op
Slide 16: Sticky prices reducing demand
Sticky prices reducing demand GAS PRICES PLUMMETING SECURITY OF SUPPLY EXPENSIVE USD/MMBTU USD/MMBTU 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 - US (HH) Asia (JKM) Japan LNG import price Europe (TTF) US (HH) fwd Asia (JKM) fwd Europe (TTF) fwd • All-time low gas prices • Far East consumers not benefitting
Slide 17: And now for something completely different..
And now for something completely different.. THE ART OF THE DEAL SO GREAT! 3 2 2,41 1 2,14 1,09 0,87 - Australia - China US - Europe US - India US - China Vessels needed to transport 1 MTPA of LNG • US – China phase 1 trade deal signed 15 Jan 2020, tariff cut on US goods incl LNG from 2 March • Chin
Slide 18: Win-Win-Win
Win-Win-Win GLOBAL CO2 EMISSIONS (ENERGY) LIFECYCLE GHG EMISSIONS COAL VS GAS CO2 bn tons 35 30 25 20 15 10 5 0 Advanced economies Rest of world • Emissions from advanced economies fell by 3.2 % in 2019 • 98 % of gas consumed has lower lifecycle GHG • Of which 1/3rd from coal to gas switching emissi
Slide 19: LNG fleet and orderbook
LNG fleet and orderbook NO. VESSELS TOTAL FLEET 50 700 45 600 40 35 500 30 400 25 20 300 15 200 10 100 5 0 0 Available (LHS) Fixed (LHS) Delivered (LHS) Total fleet (RHS) • Total fleet 514 vessels > 125’ cbm • 38 vessels delivered in 2019 – 22 % less than all-time high in 2018 • Current orderbook of
Slide 20: The dash for gas
The dash for gas MTPA LNG TRAINS UNDER CONSTRUCTION MTPA 12 140 120 10 100 8 80 6 60 4 40 2 20 0 0 2020 2021 2022 2023 2024 2026 Total (RHS) FID in 2019 • 121 MTPA new capacity starting up 2020 – 2026 of which 53 MTPA in the US (44 %) • ~33 % of total trade in 2019 at 361 MT • All-time high 71 MTPA
Slide 21: Agenda
Agenda 28/02 2020 1. Highlights 2. Financials Q4 3. Market update 4. Summary www.awilcolng.no - 21 -
Slide 22: Summary
Summary ➢ Massive supply growth not matched by demand in the short term ─ Mild winter / seasonality ─ Exacerbated by Covid-19 ─ Sticky prices ➢ Mid- and long-term demand for LNG transportation remains strong ─ 33 % growth in LNG production vs 21 % fleet growth ─ US – China Phase 1 trade deal promisi
Slide 23: Q&A: A Fully Integrated Pure Play LNG Transportation Provider
Q&A A Fully Integrated Pure Play LNG Transportation Provider Two 2013 built TFDEs Attractive debt financing Tier 1 customers Solid owners Experienced Opportunistic strategy management team www.awilcolng.no - 23 -
Slide 24: Jon Skule Storheill, CEO
Jon Skule Storheill CEO Mobile: +47-9134 4356 E-mail: jss@awilcolng.no Øyvind Ryssdal CFO Mobile: +47-920 14 029 E-mail: or@awilcolng.no www.awilcolng.no - 24 -