DOF Subsea Group Sub/IR/2013/DOF Subsea...• The market value of owned vessels in operation is...
Transcript of DOF Subsea Group Sub/IR/2013/DOF Subsea...• The market value of owned vessels in operation is...
Q2 2013 Presentation
DOF Subsea Group
DOF Subsea
Agenda
In brief
Recent events
Group overview
Contract status
Financials
Outlook
Appendix
DOF Subsea Group – In brief
DOF Subsea 3
Fleet
• One of the largest subsea vessel owners in the world
• Owns and operates a fleet of 24 vessels, plus 5 newbuilds on order
• In addition 2 vessels on long-term charter
• The market value of owned vessels in operation is NOK17 167 million, with a value
adjusted age of 4.5 years
• Operates 52 ROVs
Global organization
• Head office in Bergen
• Regional offices in Australia, Singapore, Norway, UK, Angola, US, Canada and
Brazil
Total of 2 642 employees
• Subsea employees: 1 642
• Of which offshore engineers and project staff: 1 260
• Marine crew: 1 000
Norway Brazil Canada US UK Asia Pacific Angola
365 325 48 88 468 330 18
DOF Subsea Group – In brief
DOF Subsea 4
Key figures
Back-log incl. options NOK 29 627 million
Market value of fleet NOK 17 167 million
Number of shares 119 733 714
Total Per share
Book equity NOK 4 996 million NOK 41.73
Value adj. equity NOK 8 057 million NOK 67.30
Book equity ratio 25.4 %
Value adj. equity ratio 35.5 %
15.5 %
CAGR
21.2 %
CAGR
Quarterly figures
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
200
400
600
800
1 000
1 200
1 400
1 600
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Q2 2010 Q2 2011 Q2 2012 Q2 2013
NO
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Operating revenue EBITDA EBITDA margin
Recent events
DOF Subsea 5
Operational
• Utilization of the subsea project vessels has been 76 % in April, 86 % in May and 92 % in June
• Utilization of the time charter vessels has been 100 % in April, 96 % in May and 100 % in June
• Skandi Bergen started on the Banff project end June
• Skandi Constructor started a long-term charter with Helix
• During the quarter two vessels have been in transit to and from the Gulf of Mexico
• One vessel has been dry-docked while two vessels have had yard stay for repair/upgrade
Fleet
• Ordered 4 new PLSVs from VARD Norway and Brazil together with Technip (see separate
slides)
• Took delivery of Skandi Bergen in June
• Geobay delivered to new owners
Recent events
DOF Subsea 6
Contracts
• Several subsea contracts in the Atlantic region, including increased work scope on the Banff
project, increasing the utilization of the vessels Geosund, Geoholm, Skandi Skolten and Skandi
Bergen
• Several subsea contracts in the Asia Pacific region, increasing the utilization of the vessels
Skandi Singapore, Skandi Hawk and Skandi Hercules
• Chevron extended the charter on Skandi Salvador, firm until year end 2014
• Petrobras extended the charter for Skandi Vitória with two years, firm until September 2015.
The extension was done at market terms
• Subsea 7 extended the charters on Skandi Neptune and Skandi Seven with one year
• Total value of contracts listed is above USD 300 million.
• Petrobras awarded DOF Subsea/Technip JV contract for 4xPLSVs (see separate slides)
Finance
• Financing secured on Skandi Bergen at market terms with standard DOF Subsea covenants
State-of-the-art PLSVs
DOF Subsea 7
DOF Subsea 8
PLSV contracts
Mons S. Aase, DOF Subsea’s Chief Executive Officer, declared: “The contracts confirm that our co-operation
with Technip on the Skandi Vitória and Skandi Niterói have been successful, and reinforces our position as a
leading provider of offshore vessels to the Brazilian O&G industry. It comes as a result of our long-term focus
on the Brazilian market and is an acknowledgment of the expertise of our employees.”
Frédéric Delormel, Technip’s Executive Vice President and Chief Operating Officer Subsea, added: “This
strategic contract reinforces our subsea leadership in Brazil and our long-term relationship with Petrobras.
We are confident that these new state-of-the-art PLSVs, including two with the most important flexible
pipelay tension capacity in the world - 650 tons - will be key assets for our client to successfully achieve its
projects offshore Brazil.”
Roy Reite, VARD’s Chief Executive Officer and Executive Director commented: “I look forward to working
with Technip and DOF on these milestone projects. VARD yards both in Europe and Brazil being chosen to
build these vessels illustrates the value of having a global presence when working with international clients,
and bringing leading edge technology to new markets.”
DOF Subsea 9
PLSV key information
PLSV 1+2
• To be built in Brazil
• Delivered Q4 2016 and Q2 2017
• Design 316
• Type Pipe Lay support
• LOA 140 m
• Breadth 28 m
• VLS 340 t
• 2 ROVs
• DWT 10 800 t
PLSV 3+4
• To be built in Norway, Søviknes
• Delivered Q2 2016 and Q4 2016
• Design 305
• Type Pipe Lay support
• LOA 150 m
• Breadth 30 m
• VLS 650 t
• 2 ROVs
• DWT 13 200 t
DOF Subsea 10
PLSV financial information
• Contract 8+8 years
• Norskan will provide Marine Services
• Approx. USD 110 million in annual EBITDA contribution for DOF Subsea when all vessels
are in operations
• DOF Subsea part of CAPEX approx. USD 625 million
DOF Subsea
Group overview
Ownership structure
DOF Subsea 12
Modern high-end fleet and equipment
A workforce of 2 642 highly skilled employees
24 owned subsea vessels in operation
5 vessels on order
2 vessels on charter
50 ROVs, 1 ROTV and 1 AUV in operation
Leading subsea contractor
51% 49%
100%
DOF ASAFIRST RESERVE
CORPORATION
DOF SUBSEA
HOLDING AS
DOF SUBSEA AS
DOF Subsea AS
DOF Subsea Asia Pacific
Singapore
Australia
Indonesia
Malaysia
Mashhor DOF Subsea (50%)
Brunei
DOF Subsea Atlantic
UK
Angola
Norway
Arctic
Russia
DOF Subsea North America
US
Canada
DOF Subsea Brazil
Survey & Positioning
UK
US
Management companies
DOF Management
(34 %)
Marin IT
(35 %)
Engineering companies
CSL
Semar (50%)
Ship/asset owning
companies
DOF Subsea Rederi
DOF Subsea Rederi II
DOF Installer (83.66 %)
DOFTECH
(50 %)
TECHDOF
(50 %)
DOF Subsea ROV
DOF Subsea 13
DOF Subsea Group structure
• DOF Subsea divided into regions, engineering
companies and asset-owning companies
• Regions, engineering companies and asset-owning
companies are profit centers
• Head office in Bergen
GEOGRAPHICAL FOCUS AREAS
PerthRio de Janeiro
Buenos Aires
Singapore
Houston
St. Johns
Aberdeen
Cairo
Brunei
Macaé
Jakarta
Manila
(5)
Angola
Moscow
Bergen
(88)
(325)
(18)
(264)
(61)
(365)
(468)
(48)
DOF Subsea - A global subsea player
14DOF Subsea
Malaysia
• Incorporated on 24th of May 2005 after DOF ASA acquired
GEO Group AS and its subsidiary Geoconsult AS
• DOF Subsea was established by DOF ASA in order to create a
more effective organization with the aim of establishing a
leading subsea services company
• DOF ASA transferred its multipurpose/ROV vessels to
DOF Subsea, constituting four vessels and one
newbuild
• DOF Subsea is headquartered in Bergen, Norway
DOF Subsea fleet evolution
-
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
0
4
8
12
16
20
24
28
2005 2006 2007 2008 2009 2010 2011 2012 2013
NO
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Nu
mb
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of o
pe
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d v
essels
Owned vessels Chartered vessels MV of owned fleet (r.a.)
MV of fleet
DOF Subsea – Company history
DOF Subsea 15
2005 2006 2007
Fleet: 11 vessels
May: DOF acquired Geoconsult and established GEO (now DOF Subsea)
May: Private placement of shares of NOK 715 mill
Nov: Listed on Oslo Stock Exchange
Nov: Acquisition of Century Subsea
Fleet: 11 vessels
Feb: Acquisition of Covus Corp
May: Set up of Geo do Brazil
Aug: Established 50/50 JV in Brunei
Fleet: 13 vessels
Jan: Acquired 50% of SEMAR
Jan: Acquired 100% of DOFCON
Mar: Establishment of Aker Oilfield Services
Mar: Name change to DOF Subsea
Apr: Acquisition of CSL
Aug: Merger of Mgmt company with DOF Management AS
2008
Fleet: 16 vessels
Feb: Delivery of Geograph
Jul: Delivery of Skandi Acergy
Nov: Delivery of Skandi Seven and sale of Geofjord
Dec: DOF Subsea acquired by DOF ASA and First Reserve
JV with Technip
2009 2010
Fleet: 18 vessels
Feb: Delivery of Skandi Salvador
Mar: Delivery of Skandi Arctic
Dec: Delivery of Skandi Santos
Fleet: 21 vessels
Jan: Delivery of Skandi Aker
Feb: Sale of GeoChallenger
Jun: Acquisition of SWG
Jul: Delivery of Skandi Vitoria and Skandi Skolten
Dec: Delivery of Skandi Hercules
JV with Technip
2011
Fleet: 24 vessels
Feb: Delivery of Skandi Niteroi
May: Sale of Geosounder
Jun: Acquisition Skandi Constructor
Jul: Delivery of Skandi Skansen
Sep: Delivery of Skandi Singapore
2012
Fleet: 25 vessels
Mar: Sale of OSCV newbuild.
Mar: Signed OSCV newbuildcontract
2013
Fleet: 26 vessels
Feb: Signed OSCV newbuildcontract
Feb: Chartered Harvey Deep-Sea
Mar: Sale ofGeobay
Jun: Delivery of Skandi Bergen
Aug: Signed newbuild contracts for 4 x PLSVs
• DOF Subsea’s main presence is in segments with medium to high
barriers to entry and high complexity of operations
• Higher margins and earnings beyond the time charter rates
• DOF Subsea is gradually building engineering capabilities
16DOF Subsea
Le
ve
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arr
iers
to
en
try
Incre
ase
d e
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ine
ering
re
qu
ire
me
nt
Complex
subsea operations
Marine transport/
services
Co
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lexity a
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siz
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f o
pe
ratio
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Incre
ase
d s
yste
m r
eq
uire
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nt
Level of industry barriers to entry
New high-end fleet
DOF Subsea 17
• Majority of the fleet delivered after 2007
• Industry leading value adjusted average fleet age of 4.5 years
• High-end vessels capable of a wide scope of operations, world wide
Newbuild17 %
2007 - 201359 %
2000 - 200621 %
Before 20003 %
Building year DOF Subsea fleet
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1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
Average fleet age
Value adjusted
2009
Business management
Global business management system accredited by DNV to:
• Business Management System ISO 9001: 2008
• Health and Safety System OHSAS 18001:2007
• Environmental Management System ISO 14001:2004
DOF Subsea 18
• LTI frequencies for 2011 was 0.9 and for 2012 it has been 0.3
• High number of safety observations reported shows commitment to HSEQ
HSEQ key statistcs
DOF Subsea 19
Safety Observations 2012
0,00
2,00
4,00
6,00
8,00
10,00
12,00
2005 2006 2007 2008 2009 2010 2011 2012 2013
DOF Subsea LTI frequency
IMCA - LTI frequency
DOF Subsea - recordable incidentfrequency
IMCA - recordable incident frequency
0
200
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800
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1200
1400
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
DOF Subsea
Projects
DOF Subsea – Life-of-field services
DOF Subsea 21
• DOF Subsea offers integrated subsea solutions across life-of-field
• Field development
• Production phase
• Field abandonment / decommissioning
DOF Subsea – Projects
• DOF Subsea has built a global organization over the last 8 years
• Presence in all major Oil Hubs
• Standardization of routines and systems
• Training of personnel
• DOF Subsea are growing the project business gradually within
• Survey
• IRM
• SURF
• Project business going forward
• Establish MSA with all major players (Asia, Atlantic and GOM)
• Hire more engineers (Asia, Atlantic, GOM and Brazil)
• Increase the activity within Survey and Positioning (Global player)
• Gradually increase the complexity of work done (Step by Step)
• Build a project back-log
DOF Subsea 22
DOF Subsea
Contract status
Contract coverage vessels
DOF Subsea 24
FIRM CONTRACTS
OPTIONAL PERIOD
Contract coverage vessels
DOF Subsea 25
• DOF Subsea Group has solid cash flow visibility over the next 3-5 years
• By August 2013 the total back-log (incl. options) was approx. NOK 29 627 million
• Firm contracts counts for NOK 14 586 million
• Options counts for NOK 15 041 million
Note: includes options on long-term contracts
* As per August 2013
29 627
27 084
24 285
22 299
20 405
18 229
16 127
14 222
-
5 000
10 000
15 000
20 000
25 000
30 000
35 000
2013 2014 2015 2016 2017 2018 2019 2020
DOF Subsea
Financials
Condensed profit & loss
• Operating income increased from NOK 1 384 million in Q2 2012 to NOK 1 679 million in Q2 2013.
• EBITDA (excl. gain on sale of assets) increased from NOK 470 million in Q2 2012 to NOK 471 million in Q2 2013.
• EBIT (excl. gain on sale of assets) decreased from NOK 292 million in Q2 2012 to NOK 276 million in Q2 2013.
DOF Subsea 27
Condensed balance sheet
• From year end 2012 total fixed assets has increased from NOK 16 012 million to NOK 16 344 million
• From year end 2012 cash and cash equivalents has increased from NOK 1 478 million to NOK 1 674 million
• Total liabilities as per 30th of June 2013 was NOK 14 667 million
• Net interest bearing debt of NOK 11 340 million as per 30th June 2013
• Book equity of NOK 4 996 million giving a ratio of 25.4 % to total assets as per 30th June 2013
• Value adjusted equity of NOK 8 057 million giving a ratio of 35.5 % as per 30th June 2013
DOF Subsea 28
Quarterly performance (excl. asset sales)
DOF Subsea 29
22.9 %
CAGR
21.7 %
CAGR
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
NO
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Operating income EBITDA EBITDA margin
NOK million Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
Operating income 735 743 754 730 944 851 1 080 900 1 028 1 152 1 246 1 223 1 384 1 354 1 288 1 225 1 679
EBITDA 215 234 171 186 306 282 320 241 325 370 406 411 470 489 417 329 471
EBITDA margin 29,2% 31,4% 22,6% 25,4% 32,4% 33,2% 29,7% 26,8% 31,6% 32,1% 32,6% 33,6% 34,0% 36,1% 32,4% 26,9% 28,1%
Current assets 2 492 2 380 2 670 2 467 2 919 3 192 3 366 2 829 3 003 2 938 2 923 2 782 2 962 2 704 2 612 3 077 3 319
Fixed assets 10 106 10 149 10 933 11 738 12 499 13 325 14 179 14 520 15 089 16 178 16 305 16 455 16 230 16 056 16 012 16 043 16 344
Total assets 12 598 12 530 13 603 14 205 15 418 16 517 17 545 17 349 18 092 19 117 19 228 19 238 19 192 18 760 18 624 19 120 19 663
Current liabilities 1 618 1 286 1 489 2 035 2 496 2 942 2 167 2 311 2 458 2 640 2 637 2 543 2 495 2 260 1 989 2 000 2 805
Non-current liabilities 7 251 7 383 8 279 8 350 8 867 9 109 10 154 9 946 10 542 11 694 11 759 11 723 11 735 11 439 11 534 12 051 11 524
Equity 3 728 3 860 3 833 3 819 4 054 4 466 5 224 5 091 5 092 4 782 4 832 4 970 4 963 5 061 5 102 5 069 4 996
Debt maturity profile
DOF Subsea 30
DOFSUB04
- NOK 750 million
- Maturity April 2014
- Net NOK 517.5 million
DOFSUB05
- NOK 750 million
- Maturity April 2016
- Net NOK 668 million
DOFSUB06
- NOK 700 million
- Maturity Oct 2015
- Net NOK 482 million
DOFSUB07
- NOK 1 300 million
- Maturity May 2018
• The figures reflects amortization and balloon payments on debt drawn as per 30th June 2013.
• Debt maturity profile excludes approx. NOK 0.6 billion in payments to Eksportfinans which is serviced by corresponding
amount of restricted cash.
* As per 30th June 2013
Debt maturity profile DOF Subsea AS level, 2013E – 2017E
-
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2013E 2014E 2015E 2016E 2017E After
NO
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illio
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Bond Loan Bank Debt Balloons
Stable asset values over the last years
DOF Subsea 31
200
300
400
500
600
700
800
900
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NO
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illio
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Skandi Seven Ocean Protector Geoholm Skandi Patagonia
• Fair market values of DOF Subsea fleet have been stable in 2011 and increased by 3.6 % in 2012
* As per 30th June 2013
Market value development
Asset coverage
DOF Subsea 32
• The figures reflects amortization and balloon payments on debt drawn as per 30th June 2013, including newbuilds to be
delivered assuming standard DOF Subsea leverage. Bonds not included.
Gearing forecast – summary Total assets (NOK million) Market value
Vessels 17 167
Other equipment (a) 1 222
Total assets 18 389
• Note: vessel values as per 30th June 2013
(a) Includes ROVs, AUV, diving systems and other equipment
• Combined market value of DOF Subsea’s fleet is NOK 17 167 million
• Vessel level gearing on the existing fleet is estimated to 52 % at year end 2013, decreasing to 45 % at year end 2014
• Provides a significant equity cushion on top of the existing vessel level financing
• Significant gearing reduction on the existing fleet in the years to come
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
2013E 2014E 2015E 2016E 2017E
52%45%
36% 34% 32%
48%55%
64% 66% 68%
Loan to value Market Value Cushion
Improved credit metrics going forward
DOF Subsea 33
Improved credit metrics going forward
Extremely strong back-log
provides stable earnings
Diversified blue-chip customers
reduce counterparty risk
Value added services provide
increased earnings potential
New, high-end fleet provides safe collateral
Strong bank and investor
relationships provide access
to credit
Spare leveraging capacity on existing fleet
Robust liquidity buffer above
25% of annual revenues
Subsea market looks favourable
DOF Subsea
Outlook
Healthy fundamentals for subsea activity
DOF Subsea 35
Demand
• High oil price
• Expected 6-8 % growth in E&P
spending in 2013 and 2014
• Increased deep water spending
• Increased infrastructure spending
• High tendering activity
• Strong growth expected in Brazil,
North Sea, Gulf of Mexico and
Asia Pacific
• Increased focus on newer, larger
and more technologically
advanced vessels and
engineering capabilities
• DOF Subsea owns the world’s
most sophisticated fleet and has a
global project organization
Healthy fundamentals for subsea activity
DOF Subsea 36
Supply
• Increasing number of high-end
newbuilds
• Limited growth in supply of
engineering capabilities
• Qualified personnel will be the
bottleneck for asset utilization
Mixed market
conditions
Increasing demand
Increasing
supply
Thank you
Disclaimer
DOF Subsea 38
This presentation by DOF Subsea AS (“DOF Subsea” or the “Company”) is designed to provide a high level overview of aspects of the
operations of DOF Subsea and the DOF Subsea group.
The material set out in the presentation is current as at 30th June 2013.
This presentation contains forward looking statements relating to operations of DOF Subsea and the DOF Subsea Group that are
based on management’s own current expectations, estimates and projections about matters relevant to DOF Subsea‘s future financial
performance. Words such as “likely”, “aims”, “looking forward”, “potential”, “anticipates”, “expects”, “predicts”, “plans”, “targets”,
“believes” and “estimates” and similar expressions are intended to identify forward looking statements.
References in the presentation to assumptions, estimates and outcomes and forward looking statements about assumptions, estimates
and outcomes, which are based on internal business data and external sources, are uncertain given the nature of the industry,
business risks, and other factors. Also, they may be affected by internal and external factors that may have a material effect on future
business performance and results.
No assurance or guarantee is, or should be taken to be, given in relation to the future business performance or results of DOF Subsea
or the DOF Subsea Group or the likelihood that the assumptions, estimates or outcomes will be achieved.
While management has taken every effort to ensure the accuracy of the material in the presentation, the presentation is provided for
information only. DOF Subsea, its officers and management exclude and disclaim any liability in respect of anything done in reliance on
the presentation.
All forward looking statements made in this presentation are based on information presently available to management and DOF
Subsea assumes no obligation to update any forward looking statements. Nothing in this presentation constitutes investment advice
and this presentation shall not constitute an offer to sell or the solicitation of any offer to buy any securities or otherwise engage in any
investment activity.