Hunter Group Asa · OSL:HUNT
Hunter Group Asa — Pareto Oil & Offshore Conference 2019
25 slides from Hunter Group Asa's conference presentation, Sep 11, 2019
Slide 1: Hunter Group ASA - Pareto Oil & Offshore Conference
Hunter Group ASA - Pareto Oil & Offshore Conference 11 September 2019
Slide 2: Forward Looking Statements
Forward Looking Statements CERTAIN STATEMENTS INCLUDED IN THIS DOCUMENT CONTAIN FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING PLANS, OBJECTIVES, GOALS, STRATEGIES, FUTURE EVENTS OR PERFORMANCE, AND UNDERLYING ASSUMPTIONS AND OTHER STATEMENTS, WHICH ARE OTHER TH
Slide 3: Shareholder friendly scrubber-fitted VLCC pure play
Shareholder friendly scrubber-fitted VLCC pure play • World’s only listed scrubber-fitted newbuild VLCC pure play 7x ECO scrubber-fitted VLCCs for delivery in 2019-20 • Orders placed at historically low levels • Scrubbers delivered by Wärtsilä, with robust warranties in place • Dynamic and opportuni
Slide 4: Hunter Group ASA – A publicly traded investment company
Hunter Group ASA – A publicly traded investment company Company overview Top 10 shareholders (as of 27 August 2019) Investor Shares (m) Ownership 1 APOLLO ASSET LIMITED 168 29.1% Apollo Asset Ltd. Other shareholders 2 SUNDT AS 41 7.1% 3 SONGA TRADING INC 29 5.0% ~29% ~71% 4 SONGA AS 20 3.5% 5 SWAP I
Slide 5: Scrubber-fitted VLCC pure play with near-term deliveries
Scrubber-fitted VLCC pure play with near-term deliveries Delivery schedule Q3 ‘19 Q4 ‘19 Q1 ‘20 Q2 ‘20 Q3 ‘20 • Avg all-in yard cost per vessel of USD ~86m, Hunter Atla Sep ‘19 including Wärtsilä scrubbers Hunter Saga Sep ‘19 H.No 5457 Oct ‘19 Sold @ $98m • Newbuild scrubber vs. retrofit ensuring Hu
Slide 6: Capital structure in line with opportunistic strategy
Capital structure in line with opportunistic strategy Financing strategy Hunter Atla: Illustrative cash breakeven first 6 months Savings vs. 2010 built VLCC w/o scrubber • First class financing offer from the four largest USD/day 20,000 Nordic banks secured, however sale-and-leaseback more appropria
Slide 7: Seaborne US crude to supply Asia driven demand growth
Seaborne US crude to supply Asia driven demand growth 2017-25 oil production growth 2017-25 oil consumption growth Mbpd Mbpd 9 9 7 7 5 5 3 3 1 1 (1) (1) (3) (3) Asia Europe Africa S. & Cent. Middle CIS North Asia Africa Middle S. & Cent. CIS North Europe Pacific America East America Pacific East Ame
Slide 8: US export growth next ~3 years to require ~170 VLCCs
US export growth next ~3 years to require ~170 VLCCs US/MEG oil export growth and VLCCs required YOY growth US oil exports YOY growth MEG oil exports 0.2 0.0 1.3 1.0 0.8 -1.4 2019 2020 2021 2019 2020 2021 US oil exports ~165% 5.0 4.2 2.9 1.9 ~25 less VLs needed ’19-’21 0.9 0.3 0.5 0.5 (~20 VLs per +
Slide 9: VLCC supply growth will slow from H2 ‘19
VLCC supply growth will slow from H2 ‘19 # VLCCs Scrapped Delivered Orderbook 20yrs or older 80 60 27 40 58 65 53 49 47 50 20 38 39 39 45 45 36 36 29 31 31 27 28 23 21 19 11 - -9 -13 -6 -7 -10 -16 -18 -28 -26 -34 -28 -31 (20) -33 -61 (40) -84 (60) (80) (100) 2000 2001 2002 2003 2004 2005 2006 2007 2
Slide 10: Market balance will tighten in H2 2019 and 2020
Market balance will tighten in H2 2019 and 2020 2019-20 crude tanker balance, adj. for scrapping (VLCC equivalents) VLCC equivalents 2019 2020 70 15 10 50 74 20 40 30 (50) 15 10 14 (10) (20) (45) (30) (25) (50) Est. fleet Oil OPEC Iran Scrubber Net supply Est. fleet Oil OPEC IMO 2020 HFO Net supply
Slide 11: Current market - Clarksons Tanker FFA Report
Current market - Clarksons Tanker FFA Report Source: Clarksons 11
Slide 12: The MGO vs. HSFO spread starting to widen
The MGO vs. HSFO spread starting to widen ICE Gasoil vs. 3.5% Rotterdam fuel oil – December 2019 delivery Source: Bloomberg 12
Slide 13: Significant savings potential vs. 2010 built non-eco VLCC
Significant savings potential vs. 2010 built non-eco VLCC USD/day 45,000 ECO vs. 2010 built ECO w. scrubber vs. 2010 built 40,000 35,000 30,000 25,000 20,000 41,630 34,830 15,000 28,030 10,000 21,230 20,860 15,260 18,060 5,000 12,460 - Spread: 230 330 430 530 MGO (USD/t): 215 215 215 215 HSFO (USD/t
Slide 14: VLCC prices were at an “all time low”
VLCC prices were at an “all time low” Historical VLCC newbuilding prices adjusted for US CPI (Excl. scrubber) Asset value upside USDm 250 63% 25% 200 15% Current 10yr avg 40yr avg ~$95m ~$103m ~$135m 150 100 50 $82.8m - 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
Slide 15: Scrubbers have been misunderstood
Scrubbers have been misunderstood • If the total global shipping fleet ran on scrubbers and consumed 300 million tonnes HSFO p.a., it would take 150 years for the oceans’ Sulphur content to increase from 2,700ppm to 2,701ppm • If all the sulphur in the world’s oceans were to be removed, it would for
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix 17
Slide 18: US export capacity could reach ~8mbpd by 2021 (IEA)
US export capacity could reach ~8mbpd by 2021 (IEA) Mbpd 9 7.8 8 ~215% 7.2 7 3.3 6 2.9 5 4.2 4 0.3 1.0 3 2.5 5.0 2 0.6 4.2 2.9 1 1.9 0.5 0.5 0.9 - 0.3 2014 2015 2016 2017 2018 2019 2020 2021 Crude oil exports Addtl. existing export capacity Addtl. capacity from proposed pipelines Source: DNB, IEA, K
Slide 19: Going forward, the marginal barrel is 2-3x farther away…
Going forward, the marginal barrel is 2-3x farther away… Nautical miles 15,000 6,500 5,055 Global 10yr avg. laden MEG - Far East US - Far East distance Source: Kepler Cheuvreux 19
Slide 20: Asia adding ~1.9mbpd refinery capacity 2019-20
Asia adding ~1.9mbpd refinery capacity 2019-20 Refinery capacity additions Mbpd Latin America Europe Africa FSU North America Asia Middle East 2.5 2.0 1.5 1.0 0.5 - 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 (0.5) Source: DNB, McKinsey 20
Slide 21: Near term demand boost from IMO 2020 preparations
Near term demand boost from IMO 2020 preparations IMO adding to strong diesel demand… …expected to increase refinery runs (IEA) Mbpd 7 Mbpd 84 6 83 5 1.7 82 4 3.8 0.15 81 3 80 2 3.5 1.1 1 79 0.9 - 78 2016 2020 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec HSFO LSFO/Blends MGO 5yr avg 2017 2018 201
Slide 22: Oil production growth next 3-4 years to require ~115 VLCCs
Oil production growth next 3-4 years to require ~115 VLCCs 2019-22 incremental world oil supply Mbpd ~30 VLCC 105 Assumptions: equivalents % seaborne trade: ~65% ~30 VLCC 104 Avg VL roundtrips p.a.: ~5x equivalents 1.1 104.4 VL capacity: ~2mbls 103 ~40 VLCC 1.3 equivalents 102 1.6 ~15 VLCC 101 equiv
Slide 23: VLCC orderbook as % of fleet at historic low
VLCC orderbook as % of fleet at historic low % of delivered fleet 50% Owners of older tonnage facing costs 45% of up to USD ~8m* 40% 35% 30% Share of fleet 15yrs or older 25% 20% 15% 9.4% 10% 5% Share of fleet 20yrs or older 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 So
Slide 24: VLCCs scheduled for scrubber installation remaining ‘19
74 VLCCs scheduled for scrubber installation remaining ‘19 VLCC scrubber installation schedule Illustrative supply impact: # VLCC for Completed 2019 Remaining 2019 Scheduled 2020 scrubber installation • Remaining 2019 scrubber installations: 35 74x − 74x VLCCs 30 • Scrubber installation off-hire − 3
Slide 25: Hunter Group ASA
Hunter Group ASA Org. nr. 985 955 107 Dronningen 1 0287 Oslo, Norway +47 975 31 227 info@huntergroup.no