29 slides from Transportadora De Gas Del Sur Sa Class B's earnings presentation, Oct 26, 2023
Slide 1: Q3 2023 Results
OCTOBER 26, 2023 EARNINGS RELEASE Q3 2023 Results Kristian Johansen, CEO / Sven Børre Larsen, CFO O S L O , N O R WAY TGS.com
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 not
Slide 3: Q3 2023 - Delivering on all parameters
Q3 2023 - Delivering on all parameters Continued strong Late sales recovery Acquisition best Early Sales momentum quarter ever 129% y/y 11% y/y 27% y/y DES continuing progress Strong operational Solid cash flow performance and cost control 41% y/y EBIT 23% FCF $45 million
Slide 4: Financial Highlights
Q3 2023 Financial Highlights Total POC revenues of USD 293 million compared to USD 119 million in Q3 2022 • Late sales of USD 72 million in Q3 2023 vs. USD 65 million in Q3 2022 • POC Early sales of USD 88 million compared to USD 39 million in Q3 2022 • Proprietary revenues of USD 133 million where
Slide 5: Q3 YTD - POC revenues (pro-forma)
Q3 YTD - POC revenues (pro-forma*) 800 +27% 700 600 500 MUSD 400 747 300 589 473 200 347 100 0 YTD 2020 YTD 2021 YTD 2022 YTD 2023 * Including Magseis Fairfield 5
Slide 6: Operational Highlights
EARNINGS RELEASE Operational Highlights Q3 2023
Slide 7: Gulf of Mexico OBN Contracts Secured
Gulf of Mexico OBN Contracts Secured • Muli-year contract with super-major • TGS secures a 3-year frame agreement with a major producer for OBN in the Gulf of Mexico • First OBN survey commencing in Q2 2024 • Enabler for innovation, service quality, and technology deployment • Anticipating continued
Slide 8: High data acquisition activity level during Q3 2023
Multi-client project OBN operation DES operation High data acquisition activity level during Q3 2023 8
Slide 9: PGS transaction update
PGS transaction update • Merger agreement and merger plan signed • Extra-ordinary General Meetings late November in both companies • Six weeks creditor notice period following EGM approvals • Regulatory approvals pending • Estimated closing first half of 2024 9
Slide 10: Substantial synergy potential in PGS transaction
Substantial synergy potential in PGS transaction Preliminary synergy estimate • Preliminary synergy estimate of approximately USD 100 million (ex. tax) • Operating costs • Updated estimate of USD 60-70 million • Previous indication of “above USD 50 million” • Fleet utilization • Analysis of combined
Slide 11: Financials
EARNINGS RELEASE Financials Q3 2023
Slide 12: POC revenues by type
POC revenues by type Early Sales Revenue Late Sales Revenue 120 160 140 100 120 80 100 MUSD MUSD 60 80 98 137 60 40 88 66 97 40 76 55 65 62 72 20 34 33 39 53 46 25 31 20 31 0 0 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1
Slide 13: POC revenues by business unit
POC revenues by business unit Multi-Client & Imaging Digital Energy Solutions 180 14 160 12 140 10 120 MUSD 100 8 MUSD 80 164 156 6 12 11 128 138 60 112 124 10 107 110 9 4 7 7 7 7 8 40 20 53 2 0 0 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2021 Q4 2021 Q1 2022 Q2 2022
Slide 14: Operating costs and POC EBITDA
Operating costs and POC EBITDA Cost of Goods Sold Personnel Costs 80 40 70 35 60 30 50 25 MUSD MUSD 40 20 72 34 34 30 63 15 30 31 58 20 10 21 18 18 27 15 14 10 5 8 8 0 0 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2
Slide 15: Amortization, depreciation and POC EBIT
Amortization, depreciation and POC EBIT POC Amortization Depreciation 160 25 140 20 120 100 71 15 MUSD MUSD 80 9 2 5 10 19 21 60 27 1 33 9 36 32 35 17 19 9 22 15 13 40 5 20 43 43 36 39 39 39 40 40 41 5 6 5 5 5 0 0 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2021 Q4 202
Slide 16: Bridge POC revenues to IFRS revenues
Bridge POC revenues to IFRS revenues POC revenues Revenues Revenues IFRS revenues recognized from recognized performance according to POC obligations met in during Q3 23 16 Q3 23
Slide 17: IFRS - profit & loss
IFRS - profit & loss (MUSD) Q3 2023 Q3 2022 Change YTD 2023 YTD 2022 Change Early Sales 21.0 55.3 -62% 94.1 234.4 -60% Late Sales 71.9 64.5 11% 179.9 237.5 -24% Proprietary Sales 132.5 15.5 755% 330.9 25.7 1190% Total revenues 225.4 135.3 67% 604.9 497.6 22% Cost of goods sold 71.5 7.7 826% 192.8 10
Slide 18: IFRS - balance sheet
IFRS - balance sheet Change from (MUSD) Q3 2023 Q2 2023 Q2 2023 Q4 2022 Goodwill 384.6 384.6 0% 384.6 Multi-client library 745.0 687.3 8% 575.3 Deferred tax asset 90.1 92.7 -3% 82.2 Right-of-use assets 54.7 66.7 -18% 59.6 Other non-current assets 226.9 229.5 -1% 223.3 Total non-current assets 1,501.
Slide 19: IFRS - cash flow
IFRS - cash flow (MUSD) Q3 2023 Q3 2022 Change YTD 2023 YTD 2022 Change Cash flow from operating activities: Profit before taxes 28.5 -2.3 -1331% 36.3 59.5 -39% Depreciation/amortization/impairment 76.4 95.9 -20% 220.8 329.2 -33% Changes in accounts receivable and accrued revenues -9.9 19.1 -152% -1
Slide 20: Dividends
Dividends Dividend Per Share 1 Dividend Yield 2 1.6 6.0% 1.4 NOK 8.5 5.0% 1.2 NOK 8.0 1.0 NOK 8.5 4.0% USD per share NOK 6.0 USD 1.08 0.8 NOK 5.0 3.0% 5.2% 0.6 USD 0.8 USD 0.75 4.9% 4.5% 4.6% USD 0.6 4.3% NOK 4.0 0.14 2.0% 4.0% 3.9% 4.0% USD 0.6 USD 0.56 3.6% 3.7% 3.7% USD 0.56 3.5% 0.4 0.14 2.8% 2.
Slide 21: Outlook
EARNINGS RELEASE Outlook Q3 2023
Slide 22: More oil and gas needed to meet long-term energy demand
More oil and gas needed to meet long-term energy demand Oil and gas supply Estimated 2050 oil and gas share of 250 primary energy demand 60% 54% 54% 200 OPEC 50% 46% Exxon IEA STEPS 150 40% Gap to be filled by new oil and MBOE/day 30% gas fields 100 20% 50 Estimated production from currently 10% pro
Slide 23: Tight oil market in the short-term
23 Change mbbl/day Source: EIA -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 World liquid fules stock build/(draw) Q2 23 Q3 23 Q4 23E Q1 24E Q2 24E Q3 24E Q4 24E Tight oil m
Slide 24: Acquisition activity plan
Acquisition activity plan ZXPLR 1 ZXPLR Crews ZXPLR 2 ZXPLR OBN Crews OBN Z700 Z700 Mass Mass RMSource RM Source 1 and Source Source RMSource RM Source 2 RM and RM RMSource RM Source 3 Renewables crew Renewables Q1 2023 Q1 2023 Q2 2023 Q2 2023 Q3 2023 Q3 2023 Q4 2023 Q4 2023 NSA NSA EUR EUR AMEAP AM
Slide 25: Contract backlog & inflow
Contract backlog & inflow Timing of expected recognition of Early Sales Contract Inflow backlog 400 350 300 9% 250 0.3% MUSD 200 360 355 150 280 283 240 22% 100 184 174 196 131 141 120 117 50 88 0 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Contract Backlog 69% 900
Slide 26: License Round Activity
License Round Activity AFRICA Angola: EUROPE • 2023 round – 8 blocks NORTH AMERICA • 2025 round – 10 blocks Norway: • Out of Round direct awards legally decreed Canada: • 2023 APA Round – Q1 2024 (award) • Newfoundland – Q4 2023 (close) • 2024 APA Round – Q2 2024 (open) Egypt: • Nova Scotia – Q3 202
Slide 27: Increasing multi-client investment guidance
Increasing multi-client investment guidance • 2023 multi-client investments expected to Multi-client investments be approximately USD 400 million 600 120% • Previous guidance “more than USD 350 million” 500 100% 400 80% Early sales rate • 2023 Early sales rate expected to be MUSD above 75% 300 60% •
Slide 28: Summary
Q3 2023 Summary Total POC revenues of USD 293 million compared to USD 119 million in Q3 2022 POC EBITDA of USD 170 million compared to USD 80 million in Q3 2022 Positive momentum in POC revenues driven by strong growth in both multi-client sales and Acquisition contract revenues Merger agreement wit
Slide 29: Thank you
Thank you TGS.com