Transportadora De Gas Del Sur Sa Class B · BCBA:TGSU2
Transportadora De Gas Del Sur Sa Class B — TGS-NOPEC Geophysical Company — Q1 2020 Earnings Presentation
29 slides from Transportadora De Gas Del Sur Sa Class B's earnings presentation, May 13, 2020
Slide 1: Q1 2020 Earnings Release
Q1 2020 Earnings Release Kristian Johansen Fredrik Amundsen CEO CFO Oslo, 13 May 2020
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 no
Slide 3: Q1 2020 Highlights
Q1 2020 Highlights Market • COVID-19 leading to unprecedented drop in global oil demand - 70-75 mbpd expected for April • OPEC+ countries failing to agree on production quotas • Historical weak oil price with extreme volatility TGS Q1 2020 • Revenues of USD 152 million for Q1 mainly driven by high p
Slide 4: Q1 2020 Operational highlights
Q1 2020 Operational highlights Western Hemisphere Eastern Hemisphere Alaska Crew Edson Crew Motney Crew Permian Crew BGP Prospector JV TDI Proteus Coring BGP Pioneer JV Gyre JV Ivan Gubkin HYSY 720 HYSY 760 Polar Empress Amazon Warrior ©2018 TGS-NOPEC Geophysical Company ASA. All rights reserved 4
Slide 5: Financials
FINANCIALS
Slide 6: IFRS 15
IFRS 15 • The accounting standard IFRS 15 regarding revenue recognition implemented from 1 January 2018 • Implications for TGS • Recognition of revenues related to multi-client projects postponed until projects are delivered to customers • No amortization until completion of the project • No impact
Slide 7: Net Revenues
Net Revenues TGS/SPU Consolidated (Q1 2018 – Q4 2019) Late sales Prefunding revenues 250 +208% Y/Y 90 80 200 70 150 60 MUSD MUSD 50 100 203 213 40 83 201 157 167 -50% Y/Y 30 61 138 136 125 50 20 43 34 36 63 22 23 27 26 10 0 0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q1
Slide 8: Operating Expenses, EBIT and Multi-Client Library
Operating Expenses, EBIT and Multi-Client Library TGS/SPU Consolidated (Q1 2018 – Q4 2019) Operating costs Amortization and impairments 50 160 45 140 40 35 120 30 100 MUSD 25 80 MUSD 43 47 46 142 20 60 120 131 120 33 36 108 15 32 29 30 102 90 102 90 27 40 10 5 20 0 0 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Slide 9: Income Statement - Segment reporting
Income Statement -Segment reporting TGS/SPU Consolidated (Q1 2018 – Q4 2019) (MUSD) Q1 2020 Q1 2019 Change Net operating revenues 152.1 156.4 -3% Cost of goods sold 2.3 1.1 110% Personnel cost 13.5 20.2 -33% Other operational costs 10.7 9.2 16% Cost of stock options 0.0 1.3 -100% EBITDA 83% 125.5 12
Slide 10: Balance Sheet - Segment reporting
Balance Sheet - Segment reporting TGS/SPU Consolidated (Q1 2018 – Q4 2019) Balance sheet Q1 2020 Q1 2019 Change Goodwill 284.8 79.5 258% Multi-client library 841.9 859.5 -2% Deferred tax asset 15.9 14.8 7% Other non-current assets 96.9 88.9 9% Total non-current assets 1,239.4 1,042.6 19% Cash and ca
Slide 11: Cash Flow Statement
Cash Flow Statement TGS/SPU Consolidated (Q1 2018 – Q4 2019) Cash flow statement 2020 2019 Change Received payments 219.1 251.5 -13% Payments for operational expenses -52.1 -38.8 34% Paid taxes -20.6 -4.1 400% Net cash flow from operating activities 146.4 208.6 -30% Investment in tangible fixed asse
Slide 12: Liquidity Reserve & Cash Flow
Liquidity Reserve & Cash Flow USD 100 million undrawn Revolving Credit Facility 450 100.0 400 100.0 350 323.4 300 USD - 75 million 40.9 6.6 167.0 248.4 250 6.5 7.2 USD 47.5 million 20.6 returned to shareholders 15.0 200 150 100 145.3 50 42% of annual guided investments completed in Q1 0 Opening Cash
Slide 13: Dividends
Dividends Dividend payments1 1.6 NOK 8.5 NOK 8.0 1.4 NOK 8.5 1.2 USD 1.08 NOK 6.0 1.0 NOK 5.0 USD per share USD 0.8 0.8 NOK 4.0 USD 0.6 USD 0.6 0.6 0.125 0.4 0.2 0.375 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Year of payment • Board has resolved to pay a dividend of USD 0.125 pe
Slide 14: Management Perspectives
iy MANAGEMENT PERSPECTIVES On
Slide 15: Key messages
Key messages Very challenging short-term market conditions, but long-term fundamentals remain strong Conserving cash while preserving value – cost base reduced by 35% Y/Y Financial priorities remain firm Selective investments in proven areas – technology and risk share remain key Track-record of cap
Slide 16: Handling of COVID-19
Handling of COVID-19 Safeguarding our employees • Strict remote work policy, social distancing, travel restrictions, ongoing internal communication Operational health and safety • Working closely with contractors and service providers, continuously assessing operational risk and response plans, focu
Slide 17: Challenging market conditions
Challenging market conditions World liquid fules stock build/(draw) Brent oil price 14.0 100 12.0 90 10.0 80 Change mbbl/day 8.0 70 6.0 60 USD/bbl 4.0 50 2.0 40 0.0 30 -2.0 20 -4.0 10 -6.0 0 Source: EIA Short-Term Energy Outlook, 12 May 2020 ©TGS-NOPEC Geophysical Company ASA. All rights reserved 17
Slide 18: Improving supply/demand balance in H2 2020
Improving supply/demand balance in H2 2020 From Goldman Sachs Research note May 2020 • Signs that the peak demand impact may be behind us • Many European countries and US states have started to ease lock-down restrictions • Traffic data suggest increasing activity levels in many larger cities • Chin
Slide 19: Track-record of capturing value throughout the cycle
Track-record of capturing value throughout the cycle 1,000 • Asset light business model – few long-term 900 obligations on balance 800 sheet 700 CAGR +1% • Strong correlation 600 between cash in- and outflow MUSD 500 400 300 • Counter-cyclical investment strategy 200 100 • Flexible and quickly 0 rea
Slide 20: TGS' response to market turmoil
TGS’ response to market turmoil Cash operating costs1 Cost reduction 200 150 • Right-sizing of organization, salary freeze, bonus cuts etc. MUSD 100 • Cash cost below USD 100 million in 2020 – 35% below pro-forma 50 2019 level 0 2018 2019 2020E Investment reduction Multi-client investments1 500 400
Slide 21: TGS' financial priorities remain firm
TGS’ financial priorities remain firm ROACE1 60% 50% 40% Maximize Return on Capital Employed 30% 19% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 FCF conversion rate2 28% 30% 25% 20% Maximize Cash Flow 15% 10% 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Dividend yield3 6.
Slide 22: Multi-client investments reduced to protect cash flow
Multi-client investments reduced to protect cash flow New guidance approximately USD 325 million compared to USD 450 million previously Sales/Investment1 2.5 2.3 2.1 EUR 1.9 1.9 2.0 1.7 1.8 1.6 1.5 1.1 Land 1.0 NA 0.5 0.0 2013 2014 2015 2016 2017 2018 2019 Q1 20 3 AME AP LA 3 1. Multi-client sales /
Slide 23: 2020 Project schedule
2020 Project schedule South Halfway 3D Ravenclaw 3D Land Plains 3D Kuukpik 3D Engagement OBN Malvinas 3D Campos 3D Santos 3D 3D Norway AM 20 Senegal OUP-NORD-20 Senegal SN-UDO-19 Gambito 3D Argentina 111/113 & 102 2D/Seaseep Potiguar 2D Para Maranhao Nigeria Seaseep Jan Feb Mar Apr May Jun Jul Aug S
Slide 24: Backlog
Backlog 200 181 180 160 160 140 130 122 120 112 103 MUSD 100 86 80 74 63 60 40 20 0 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Sales committed by customers but not yet recognized in the Segment Reporting accounts ©TGS-NOPEC Geophysical Company ASA. All rights reserved 24
Slide 25: Summary
Summary Q1 2020 results helped by strong pre-funding revenues Challenging market conditions near-term Several initiatives to protect cash flow implemented TGS has a strong track record in creating values during challenging market conditions ©2018 TGS-NOPEC Geophysical Company ASA. All rights reserve
Slide 26: Appendix
APPENDIX
Slide 27: IFRS Profit & Loss account
IFRS Profit & Loss account (MUSD) Q1 2020 Q1 2019 Change Net operating revenues 52.2 99.8 -48% Cost of goods sold 2.3 1.1 110% Personnel cost 13.5 15.1 -11% Other operational costs 10.7 5.7 87% EBITDA 49% 25.6 77.9 -67% Amortization of multi-client library 80.8 73.2 10% Depreciation 2.7 5.1 -47% Ope
Slide 28: IFRS Balance Sheet
IFRS Balance Sheet Balance sheet Q1 2020 Q1 2019 Change Goodwill 284.8 67.9 319% Multi-client library 1,163.8 835.1 39% Deferred tax asset 20.5 1.2 1637% Other non-current assets 96.9 66.3 46% Total non-current assets 1,565.9 970.5 61% Cash and cash equivalents 248.4 390.0 -36% Other current assets
Slide 29: Thank you
Thank you
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