Ocean Yield ASA — Debt Investor Presentation (November 2019)
28 slides from Ocean Yield ASA's debt investor presentation, Nov 26, 2019
Slide 1: Company Presentation
COMPANY PRESENTATION 26th November 2019
Slide 2: Important Information and Disclaimer
IMPORTANT INFORMATION AND DISCLAIMER This general company presentation (together with its appendices the “Presentation”) has been prepared by Ocean Yield ASA (“Ocean Yield” or the “Company”) solely for information purposes. The information contained in this Presentation has been prepared solely to p
Slide 3: Important Information and Disclaimer
IMPORTANT INFORMATION AND DISCLAIMER The contents of this Presentation are not to be construed as legal, credit, business or tax advice. Any recipient should therefore consult with its own legal, credit, business or tax advisor as to any investment decision and legal, credit, business and tax advice
Slide 4: Key Investor Highlights
KEY INVESTOR HIGHLIGHTS 1 Large and well- • Ship-owning company with a modern fleet of 69 vessels, 65 of which are on long-term charter diversified fleet • Tankers, Dry bulk, Container vessels, Car carriers, Gas carriers and Oil-Service 2 • Average remaining charter duration of 10.7 years provides e
Slide 5: Ocean Yield ASA
OCEAN YIELD ASA 69 $2.9 BN $3.7 BN 10.7 YR VESSELS TOTAL ASSETS EBITDA BACKLOG CHARTER TENOR
Slide 6: The Second Largest Investment in Aker ASA
THE SECOND LARGEST INVESTMENT IN AKER ASA Strong industrial owner with continued commitment Leading energy company in Northern Europe Significant ESG commitment 1) Owned partly through Aker Kvaerner Holding, in which Aker has a 70% ownership interest. Additionally, Aker has a direct ownership intere
Slide 7: Investment Strategy
INVESTMENT STRATEGY Modern Long-term Acceptable Multi Growth VESSELS CHARTERS COUNTERPARTIES SEGMENT STRATEGY
Slide 8: Attractive Market for New Leasing Transactions
ATTRACTIVE MARKET FOR NEW LEASING TRANSACTIONS • Banks are reducing shipping exposure - Focus on larger and more diversified companies - Focus on ancillary business • Bond market is increasingly selective - Only open for the large companies • Equity capital is expensive - Challenging market to raise
Slide 9: Lease Case Study: Significant Buffer to Market Values
LEASE CASE STUDY: SIGNIFICANT BUFFER TO MARKET VALUES SALE-LEASE-BACK TRANSACTION 100 90 Asset market value 80 Ocean Yield’s lease outstanding 70 60 50 40 30 Ocean Yield’s bank debt 20 10 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Slide 10: Attractive Market Fundamentals for Leasing
ATTRACTIVE MARKET FUNDAMENTALS FOR LEASING NET INVESTMENTS OF USD 1.0 BILLION SINCE 2018 3,553 132 84 70 40 18 45 49 51 120 75 36 297 2,537 Investments 2012-2017 Total investments
Slide 11: Increased Diversification is Reducing the Risk
INCREASED DIVERSIFICATION IS REDUCING THE RISK 69 57 34 40 # FLEET SIZE 14 26 3 10 20 14 16 9 11 # CLIENTS 6 7 3 7 8 8 5 6 4 # SEGMENTS 2 3 Start-up 2013 2014 2015 2016 2017 2018 Nov ’19 EBITDA BACKLOG Container Product / chemical Oil-service Crude tankers 2013 2016 Q3 2019* Car carriers Dry bulk US
Slide 12: Vessels with Long-Term Charters
VESSELS WITH LONG-TERM CHARTERS EBITDA1 BACKLOG OF USD 3.7 BILLION, INCLUDING RECENT TRANSACTIONS FLEET2 Product / chemical 20 16 % 7% 3% Dry bulk 13 3% 7% Container vessels 10 4% 2% Avg. remaining 4% 3% 1% charter tenor of 3% Crude 9 3% 10.7 years 2% 6 1% 9% Car carriers 5% 3% 7% 12 % 5% Oil-servic
Slide 13: Vessels without Long-Term Charter
VESSELS WITHOUT LONG-TERM CHARTER Employment opportunities • The FPSO Dhirubai-1 is being evaluated for several employment opportunities • Final investment decisions on relevant prospects are not expected before H2 2020 FPSO DHIRUBHAI-1 Q3 2019 • Impairment of USD 68.4m reflects new estimates for fu
Slide 14: Adjusted EBITDA and Net Profit
ADJUSTED EBITDA AND NET PROFIT EBITDA ADJUSTED FOR FINANCE LEASES (USDM) 95,1 100,4 83,1 89,3 89,3 86,8 79,1 74,5 80,8 67,8 51,3 ADJ. NET PROFIT Q3 2019 From vessels with long-term charter of Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 USD 22.5m 2017 2018 2019 From vessels without ADJUSTED NET PROFIT (USDM) lo
Slide 15: Capex and Financing Overview
CAPEX AND FINANCING OVERVIEW REMAINING CAPEX / FINANCING PER Q3’19 ADJUSTED FOR RECENT TRANSACTIONS (USDM) 315 132 130 70 179 113 5 3x 1 x gas carrier 4 x LR2s Remaining Secured Expected Remaining newcastlemax capex bank funding bank funding cash payments COMMENTS • Remaining obligations per Q3 2019
Slide 16: Successful Placement of Subordinated Debt and Equity
SUCCESSFUL PLACEMENT OF SUBORDINATED DEBT AND EQUITY • Hybrid bond – August 2019 - Amount USD 125 million - Tenor Perpeptual - Coupon LIBOR + 6.50% p.a. - First call After 5 years at par - Step-up 5% p.a. after 5.5 years - Accounting treatment 100% equity - Use of proceeds New investments and genera
Slide 17: Access to Bank Funding at Attractive Terms
ACCESS TO BANK FUNDING AT ATTRACTIVE TERMS BANK GROUP COMMENTARY • Ocean Yield continues to secure bank funding at attractive terms • Large and diversified group of banks • Proactively working to broaden sources of financing • Recent refinancing has lowered costs and increased tenor, as well as high
Slide 18: Commitment to ESG
COMMITMENT TO ESG • Fleet of modern vessels with low climate footprint - Total average fleet age of 3.5 years for all 69 vessels with significantly lower CO2 emissions compared to the global average - Target to invest in modern vessels to reduce average air emissions per vessel - Identification, mon
Slide 19: Commitment to ESG
COMMITMENT TO ESG • Health & Safety - Health and safety training programmes - Emergency preparedness procedures - Target to reduce health and safety incidents - Performance monitoring and measuring • Whistleblower program - Available on https://www.oceanyield.no/Company/Integrity-channel - Handled b
Slide 20: Risk Management
RISK MANAGEMENT % Residual Counterparty Operations Interest cost Financing value
Slide 21: Summary
SUMMARY • Stable earnings from 65 vessels on long-term charters • Strong focus on securing satsifactory earnings from four vessels without long-term charters • Attractive investment opportunities across several segments • The current intention of the Board of Directors is to adjust the dividend from
Slide 22: Income Statement
INCOME STATEMENT INCOME STATEMENT Q2 Q3 Amounts in USD million 2019 2019 Operating revenues 30.1 26.9 Finance lease revenue 26.6 30.4 Income from investments in associates 5.9 5.4 Other revenue 3.9 3.6 Total revenues and other income 66.5 66.3 Vessel operating expenses (4.6) (4.5) Wages and other pe
Slide 23: Balance Sheet
BALANCE SHEET BALANCE SHEET Q2 Q3 Q2 Q3 Amounts in USD million 2019 2019 2019 2019 ASSETS EQUITY AND LIABILITIES Common equity 784 681 Vessels and equipment 1,160 1,067 Hybrid capital 0 123 Investments in associates 178 174 Non-controlling interests 13 13 Finance lease receivables 1,348 1,436 Total
Slide 24: Summary of Certain Risk Factors
SUMMARY OF CERTAIN RISK FACTORS Investing in the Company and its securities involves inherent and significant risk, which, if they were to materialize, may materially and adversely affect the Company's business, results of operations, financial condition and/or prospects. This may in turn result in
Slide 25: Summary of Certain Risk Factors
SUMMARY OF CERTAIN RISK FACTORS - Development and construction of new sophisticated, high-specification vessels could cause the Company's vessels to become less desirable to charterers. - The Company's vessels may be damaged or lost due to events such as marine disasters, environmental accidents, wa
Slide 26: Summary of Certain Risk Factors
SUMMARY OF CERTAIN RISK FACTORS - The market value of the Company's vessels may decrease, which could limit the amount of funds the Company can borrow, trigger financial covenants under the Company's borrowing arrangements or lead to losses in the event of a vessel sale. - The Company will need to r
Slide 27: Notes
NOTES November 19 27
Slide 28: Investor Relations
INVESTOR RELATIONS Marius Magelie, SVP Finance & Investor Relations +47 24 13 01 82 mm@oceanyield.no www.oceanyield.no/IR
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