GasLog Q2 2013 earnings presentation
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Transcript of GasLog Q2 2013 earnings presentation
GASLOG LTD. Second Quarter Earnings Presenta9on 2013
20 August 2013
Forward Looking Statements
2
This presenta6on contains “forward-‐looking statements” as defined in the Private Securi6es Li6ga6on Reform Act of 1995. The reader is cau6oned not to rely on these forward-‐looking statements. All statements, other than statements of historical facts, that address ac6vi6es, events or developments that the Company expects, projects, believes or an6cipates will or may occur in the future, including, without limita6on, future opera6ng or financial results and future revenues and expenses, future, pending or recent acquisi6ons, general market condi6ons and shipping industry trends, the financial condi6on and liquidity of the Company, cash available for dividend payments, future capital expenditures and drydocking costs and newbuild vessels and expected delivery dates, are forward-‐looking statements. These statements are based on current expecta6ons of future events. If underlying assump6ons prove inaccurate or unknown risks or uncertain6es materialize, actual results could vary materially from our expecta6ons and projec6ons. Risks and uncertain6es include, but are not limited to, general LNG and LNG shipping market condi6ons and trends; our con6nued ability to enter into mul6-‐year 6me charters with our customers; our contracted charter revenue; our customers’ performance of their obliga6ons under our 6me charters and other contracts; the effect of the worldwide economic slowdown; our ability to obtain financing to fund capital expenditures, and funding by banks of their financial commitments; business strategy, areas of possible expansion and expected capital spending or opera6ng expenses; our ability to enter into shipbuilding contracts for newbuildings and our expecta6ons about the availability of exis6ng LNG carriers to purchase, as well as our ability to consummate any such acquisi6ons; our expecta6ons about the 6me that it may take to construct and deliver newbuildings and the useful lives of our ships; number of off-‐hire days and insurance costs; our an6cipated general and administra6ve expenses; fluctua6ons in currencies and interest rates; our ability to maintain long-‐term rela6onships with major energy companies; our ability to maximize the use of our ships; environmental and regulatory condi6ons, including changes in laws and regula6ons or ac6ons taken by regulatory authori6es; risks inherent in ship opera6on, including the discharge of pollutants; availability of skilled labor, ship crews and management; poten6al disrup6on of shipping routes due to accidents, poli6cal events, piracy or acts by terrorists; and poten6al liability from future li6ga6on. A further list and descrip6on of these risks, uncertain6es and other factors can be found in our Annual Report filed with the SEC on March 28, 2013. Copies of the Annual Report, as well as subsequent filings, are available online at www.sec.gov or upon request from us. We do not undertake to update any forward-‐looking statements as a result of new informa6on or future events or developments except as may be required by law. The declara6on and payment of dividends is at all 6mes subject to the discre6on of our Board of Directors and will depend on, among other things, risks and uncertain6es described above, restric6ons in our credit facili6es and the provisions of Bermuda law and such other factors as the Board of Directors may deem relevant.
Agenda
3
• Highlights
• Financial Highlights
• Market Update
• Business Overview
• Summary
Highlights
4 (1) See Annex 1 for reconcilia6on of EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS.
• Contracted 2 LNG newbuildings at Samsung Heavy Industries for delivery in 2016. Vessels chartered out to BG Group for minimum 7 years with charterer’s op6on to extend.
• Delivery of GasLog Sydney in May and GasLog Skagen in July ahead of schedule with concurrent delivery to the charterer.
• For the second quarter, GasLog reports Profit of $20.4 million, EBITDA(1) of $33.8 million and EPS of $0.32.
• Adjusted Profit of $7.1 million, Adjusted EBITDA of $20.4 million and Adjusted EPS was $0.11 for the second quarter.
• Quarterly dividend of $0.11 per common share is payable on September 13, 2013.
• GasLog issued a senior unsecured bond of NOK 500,000,000 ($83.2 million) that will mature on June 27, 2018.
• Strong industry fundamentals, supported by recent posi6ve developments for LNG exports from USA.
Financial Highlights
5
1. See Annex 1 for reconcilia6on of EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS. In 2013, Adjusted EBITDA, Adjusted Profit and Adjusted EPS exclude the non-‐cash gain primarily caused by mark-‐to-‐market valua6on of interest rate swaps ($16.1 million and $12.9 million for the 6 and 3 months, respec6vely).
2. Net Financials represents financial costs, financial income, and gain/(loss) on interest rate swaps, net.
1
1
1
1
2
(USD%'000) Q2%2013 Q2%2012 Q2%2013 Q2%2012
Revenues 54,725 33,309 32,948 16,707
EBITDA 47,719 10,614 33,806 2,199
Adjusted%EBITDA 31,711 16,651 20,447 8,321
Share%of%Profit%of%Associate 743 758 355 375
Net%Financials% 5,358 (10,757) 5,897 (7,850)
Profit/(loss) 26,323 (1,381) 20,429 (3,552)
Adjusted%Profit% 10,315 4,657 7,070 2,570
EPS,%diluted%($/share) 0.42 (0.03) 0.32 (0.06)
Adjusted%EPS,%diluted%($/share) 0.16 0.09 0.11 0.04
Average%Number%of%Vessels:Owned 3.6 2.0 4.3 2.0Managed 15.6 14.0 16.3 14.0
Ownership%Segment:Time%Charter%Equivalent%rates%pr.%day%($/day)
76,729 76,885 76,596 76,890
Utilisation 100% 100% 100% 100%
6 months 3 months
Financial Highlights
6 (!) See Annex 1 for reconcilia6on of EBITDA
1
!"!!!!!5,000!!
!10,000!!!15,000!!!20,000!!!25,000!!!30,000!!!35,000!!
Q2!2012! Q2!2013!
Revenues!(USD!'000)!
!"!!!!!5,000!!
!10,000!!!15,000!!!20,000!!!25,000!!!30,000!!!35,000!!!40,000!!
Q2!2012! Q2!2013!
EBITDA!(USD!'000)!
!"!!!!!200,000!!!400,000!!!600,000!!!800,000!!
!1,000,000!!!1,200,000!!!1,400,000!!!1,600,000!!
Q2!2012! Q2!2013!
Total!Assets!(USD!'000)!
0!
2!
4!
6!
8!
10!
12!
Q2!2012! Q2!2013!
Average!Number!of!Ships!
Financial Highlights
7
(USD%'000) 30*Jun*13 31*Dec*12Assets
Non*current%assetsGoodwill 9,511 9,511Investment2in2associate 6,349 6,856Tangible2fixed2assets 988,226 426,880Deferred2financing2costs 18,718 24,279Other2nonEcurrent2assets 2,090 4,071Derivative2financial2instruments 4,923 EVessels2under2construction 141,745 217,322
Total%non*current%assets 1,171,562 688,919
Current%assetsTrade2and2other2receivables 2,397 2,432Dividends2receivable2and2due2from2related2parties 605 859Inventories 1,200 481Prepayments2and2other2current2assets 1,147 425ShortEterm2investments E 104,674Cash2and2cash2equivalents 211,753 110,978
Total%current%assets 217,102 219,849
Total%assets 1,388,664 908,768
Financial Highlights
8
(USD%'000) 30*Jun*13 31*Dec*12Equity%&%Liabilities
EquityShare&capital 629 629Contributed&surplus 614,964 621,879Reserves (3,856) (11,049)Retained&earnings/&(accumulated&deficit) 11,220 (8,188)Total%equity 622,957 603,271
Current%liabilitiesTrade&accounts&payable 6,617 1,794Ship&management&creditors 4,643 851Amounts&due&to&related&parties 89 122Derivative&financial&instruments 10,280 7,145Other&payables&and&accruals 15,649 15,094Loans&L¤t&portion 39,661 25,753
Total%current%liabilities 76,939 50,759
Non*current%liabilitiesDerivative&financial&instruments 3,529 24,184Loans&L&nonLcurrent&portion 684,613 228,515Other&nonLcurrent&liabilities 626 2,039Total%non*current%liabilities 688,768 254,738
Total%equity%&%liabilities 1,388,664 908,768
Financial Highlights – Debt Facili6es
9
1. Outstanding balance as of June 30, 2013. 2. Lenders have a put option that gives them the right to request repayment of the facility in full on the fifth anniversary of the delivery of the first ship serving as collateral under the facility. 3. Represents the portion of the loan bearing interest at a floating rate that has been hedged to a fixed rate by way of an interest rate swap. 4. The loan facility is split in two tranches, a) a $110 Mill. fully drawn term loan and b) a revolving credit facility of up to $50 Mill. which is currently undrawn. 5. USD value of the NOK 500 Mill. unsecured bond at the balance sheet date is $82.5 Mill.
Ship Built Bank Loan (USD millions)
Expected Drawdown
Date Maturity
GasLog Savannah 2010 DSF $140¹ N / A 2020
GasLog Singapore 2010 DnB, NBG, UBS, CBA, SEB $160¹,4 N / A 2018
GasLog Shanghai 2013 DnB, KEXIM $1341 N / A 20252
GasLog Santiago 2013 DnB, KEXIM $1341 N / A 20252
GasLog Sydney 2013 Nordea, ABN, Citi $139 2019
GasLog Skagen 2013 Nordea, ABN, Citi $139 Q3 2013 2019
Hull 2041 2013 Credit Suisse $144 Q4 2013 2020
Hull 2042 2014 DnB, SEB, CBA, ING, DSF $143 Q2 2014 2021 / 2022
Hedged pct.3
100%
Hull 2043 2014 DnB, SEB, CBA, ING, DSF $146 Q4 2014 2021 / 2022
Hull 2044 2015 DnB, SEB, CBA, ING, DSF $146 Q1 2015 2021 / 2022
75.0%
98.7%
32.9%
In total ~62.1% covered at 4.6%
all-in fixed interest
70.2%
70.2%
3
N/A
N / A
NOK 500 Mill. Bond N / A N / A $835 N / A 2018 100%
Financial Highlights – Looking Forward
10
The following table summarizes GasLog’s contracted full year revenues and vessel u6liza6on within the Vessel Ownership segment un6l the end of 2026. These include the recently announced 2 newbuildings and charter party agreements, signed in Q3-‐2013.
1 Revenue calcula6ons assume 365 revenue days per annum, with 30 off-‐hire days when the ship undergoes scheduled drydocking. Two of our ships are scheduled to be drydocked in 2015, none are scheduled to be drydocked in 2016, and thereaner each ship is expected to con6nue their 5 year drydocking cycle.
1
PROJECTED REVENUE
2 Contracted revenue for the full year ending December 31, 2013 is $ 133 million.
2
On#and#after#July#1st
2013 2014 2015 2016 2017)2026 Total
Percentage)of)total)contracted)days/total)available)days)for)the)twelve)ships 100% 100% 78% 73% 34% 43%Total)contracted)days (days) 1,106 2,740 2,768 3,141 17,119 26,874Total)available)days (days) 1,106 2,741 3,532 4,331 50,279 61,989Total)unfixed)days (days) F 1 764 1,190 33,160 35,115
Contracted5time5charter5revenues (USD%mill.) 555555555555555555845 555555555555555552085 555555555555555552115 555555555555555552475 555555555555551,4085 555555555555552,1585
For#the#years
Market Update
11
USA Canada
Strong LNG industry fundamentals con6nue to support op6mism for mul6-‐year forward-‐rates.
Spot market rates increased and remain high compared to historical levels.
Further developments in Q2-‐2013 support the growth in liquefac6on capacity in this decade:
• Cheniere took FID on liquefac6on trains 3&4 at its Sabine Pass facility. • Freeport LNG became the second project to receive US Dept. of Energy approval to export to non-‐FTA countries.
• Dominion announced the sale of their full 5.25mtpa planned export capacity from Cove Point, to buyers Sumitomo of Japan and GAIL of India.
• E.ON signed an agreement with Pieridae Energy to acquire 5mtpa for 20 years from a planned liquefac6on facility on the Canadian East Coast.
• BG and ExxonMobil have filed applica6ons for large projects on the west coast.
• Rosnen has signed Heads of Agreement with Marubeni, Vitol and SODECO for a total of 4mtpa.
Russia
Business Overview -‐ GasLog’s recently announced orders & charters
12
On August 15th 2013, GasLog announced:
• 2 firm orders for LNG carriers to be built by Samsung Heavy Industries Co. Ltd., South Korea.
• On delivery in H2-‐2016 each ship will commence 7 year 6me charters to a subsidiary of BG.
• Lower delivered cost per vessel than for the 2 ships ordered earlier this year – the advantage of building a series.
• EBITDA of $46-‐47 million expected in the first twelve months of opera6on.
• GasLog subsequently holds op6ons for 6 LNG carriers at Samsung, 4 of which are priced.
• Given the very aqrac6ve terms with shipyard, and given also our recent Norwegian Bond, we do not see the need to raise new equity within the next couple of years.
• The LNG carriers are state of the art, with a low cargo boil-‐off and fuel saving devices, and with the proven efficiency of tri-‐fuel diesel electric propulsion.
Owned BuiltCapacity (mcbm) Propulsion Charterer
Methane Nile Eagle 25% 2007 145,000 Steam
GasLog Savannah 100% 2010 155,000 TFDE1
GasLog Singapore 100% 2010 155,000 TFDE
GasLog Shanghai 100% 2013 155,000 TFDE
GasLog Santiago 100% 2013 155,000 TFDE
GasLog Sydney 100% 2013 155,000 TFDE
GasLog Skagen2 100% 2013 155,000 TFDE
Hull 2041 100% 2013 155,000 TFDE
Hull 2042 100% 2014 155,000 TFDE
Hull 2043 100% 2014 155,000 TFDE
Hull 2044 100% 2015 155,000 TFDE
Hull 2072 100% 2016 174,000 TFDE
Hull 2073 100% 2016 174,000 TFDE
Hull 2102 100% 2016 174,000 TFDE
Hull 2103 100% 2016 174,000 TFDE
Firm Charter Charterer Optional Period Under Discussions/Available
2021 2022 2023 2024 20252018 2019 2020Ship 2013 2014 2015 2016 2017
Business Overview – incl. the 2 vessels announced in August 2013
13
n In addition, GasLog has options for 6 additional LNG carrier newbuildings, 4 of which are priced, with expiration Q4-2013.
1. Tri -fuel Diesel Electric. 2. GasLog Skagen has a seasonal charter for the last 5 years of its firm period
(each year: 7 months on hire, and 5 months opportunity for GasLog to employ)
Summary
14
• GasLog is paying a quarterly dividend of $0.11 per share on September 13, 2013.
• Our performance in Q2-‐2013 reflects the ongoing execu6on of the growth model that is expected to con6nue through 2013 and beyond.
o GasLog Sydney delivered in Q2-‐2013, and subsequent delivery of GasLog Skagen in Q3-‐2013: 4 ships successfully delivered so far in 2013 with one more to come.
o 2 newbuildings at Samsung Heavy Industries, with 7 year charters to BG group, announced in August 2013.
• Con6nued strong fundamentals for the LNG industry.
• GasLog has the proven ability to leverage our plasorm to deliver growth for our shareholders.
Annex 1 -‐ Reconcilia6on / Non-‐GAAP Measures
15
Non-‐GAAP Financial Measures EBITDA represents earnings before interest income and expense, taxes, deprecia6on and amor6za6on. Adjusted EBITDA represents EBITDA before unrealized gain/loss on swaps and foreign exchange gains/losses. Adjusted Profit and Adjusted EPS represent earnings and earnings per share, respec6vely, before unrealized gain/loss on swaps and foreign exchange gains/losses. EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS, which are non-‐GAAP financial measures, are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and opera6ng performance. We believe that these non-‐GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. We believe that including EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS assists our management and investors in (i) understanding and analyzing the results of our opera6ng and business performance, (ii) selec6ng between inves6ng in us and other investment alterna6ves and (iii) monitoring our ongoing financial and opera6onal strength in assessing whether to con6nue to hold our common shares. This increased comparability is achieved by excluding the poten6ally disparate effects between periods of, in the case of EBITDA and Adjusted EBITDA, interest, taxes, deprecia6on and amor6za6on and, and in the case of Adjusted EBITDA, Adjusted Profit and Adjusted EPS, unrealized gain/loss on swaps and foreign exchange gains/losses, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect results of opera6ons between periods. EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS have limita6ons as analy6cal tools and should not be considered as alterna6ves to, or as subs6tutes for, profit, profit from opera6ons, earnings per share or any other measure of financial performance presented in accordance with IFRS. These non-‐GAAP financial measures exclude some, but not all, items that affect profit, and these measures may vary among companies. In evalua6ng Adjusted EBITDA, Adjusted Profit and Adjusted EPS, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presenta6on. Our presenta6on of Adjusted EBITDA, Adjusted Profit and Adjusted EPS should not be construed as an inference that our future results will be unaffected by the excluded items. Therefore, the non-‐GAAP financial measures as presented below may not be comparable to similarly 6tled measures of other companies in the shipping or other industries.
Annex 1 -‐ Reconcilia6on (cont.)
16
Reconciliation of EBITDA and Adjusted EBITDA to Profit/(Loss):
(All amounts expressed in U.S. Dollars)
30-Jun-12 30-Jun-13
(Loss)/Profit for the period (3,552,127) 20,429,474
Depreciation of fixed assets 3,249,623 6,383,872
Financial costs excluding gain/(loss) on swaps 2,945,650 7,062,618
Financial income (443,859) (69,511)
EBITDA 2,199,287 33,806,453
Unrealized loss/(gain) on swaps, net 5,348,349 (12,890,391)
Foreign exchange losses/(gains), net 773,545 (468,858)
Adjusted EBITDA 8,321,181 20,447,204
For the three months ended
Annex 1 -‐ Reconcilia6on (cont.)
17
Reconciliation of Adjusted Profit to Profit/(Loss):
(All amounts expressed in U.S. Dollars)
30-Jun-12 30-Jun-13
(Loss)/Profit for the period (3,552,127) 20,429,474
Unrealized loss/(gain) on swaps, net 5,348,349 (12,890,391)
Foreign exchange losses/(gains), net 773,545 (468,858)
Adjusted Profit for the period 2,569,767 7,070,225
For the three months ended
Annex 1 -‐ Reconcilia6on (cont.)
18
Reconciliation of Adjusted Earnings Per Share to Earnings/(Loss) Per Share:
(All amounts expressed in U.S. Dollars)
30-Jun-12 30-Jun-13
(3,552,127) 20,429,474
(5,578) —
(3,546,549) 20,429,474
61,721,614 62,863,166
(0.06) 0.32
2,569,767 7,070,225
4,036 —
2,565,731 7,070,225
61,721,614 62,863,166
0.04 0.11
Adjusted earnings attributable to the owners of common shares used in the calculation of basic EPS
Weighted average number of shares outstanding
Adjusted profit for the period attributable to owners of the Group
Less: Adjusted earnings allocated to manager shares and subsidiary manager shares
EPS
(Loss)/Profit attributable to the owners of common shares used in the calculation of basic EPS
Weighted average number of shares outstanding, basic
(Loss)/Profit for the period attributable to owners of the Group
Less: Loss allocated to manager shares and subsidiary manager shares
For the three months ended
Adjusted EPS