Q4 Financial Presentation 2014 DOF ASA ASA/IR/2015/DOF_Q4_2014.pdf · - Q4 Presentation 2014 ....

Q4 Financial Presentation 2014

DOF ASA

Highlights

- Q4 Presentation 2014 DOF ASA

Main highlights Q4 2014

Strengthening balance sheet through sale of vessels approximately MNOK 1 350 in liquidity

Improved terms from refinancing activity

Record high backlog for 2015 (approximately 79% overall)

Challenging markets

3


Highlights Q4 2014

Subsea

• Asia Pacific – Decent utilisation, but good project execution

• North Sea - High utilisation and good project execution in October and November, but weak utilisation in December

• US Gulf – Stable utilisation

AHTS/PSV

• North Sea – Reasonable utilization, but low earnings from the spot market

• Brazil – Variable utilisation due to transit and mobilization of vessels, mostly for new contracts

• Asia Pacific – Stable utilisation, but one vessel idle in the period

Operational

4


Highlights Q4 2014

Contract awards

5

Skandi Vega including ROV, first option with Statoil firm until mid-May 2016 Skandi Caledonia, 6 months extension with Maersk UK firm until Apr 2016 Skandi Gamma, 1 yr extension with Statoil applicable from Feb 2015 DOF Subsea awarded LOA for a 7+3 yrs IRM contract (Skandi Hawk) Skandi Møgster and Skandi Saigon, extended 1 yr with Total Argentina firm until end Feb 2016 Skandi Giant and Skandi Atlantic, 150 days + options up to 5 wells for Origin Australia Skandi Barra, 3 yrs (+ up to 2 yrs options) with Total UK firm until Feb 2018 Skandi Buchan, 3 yrs (+ up to 2 yrs options) with Total UK firm until Sept 2018 Skandi Sotra, 1 yr (+ 4 x 6 months options) with Chevron North Sea Ltd firm until Dec 2015 Skandi Marstein, 10 months (+ up to 9 months options) with CNR International (UK) firm until Oct 2015 Skandi Texel, 20 months (+1 yr option) with BP Egypt firm until Aug 2016 Skandi Hav, 4 yrs with Petrobras firm until November 2018

Fleet

Skandi Aker sold and changed name to AKOFS Seafarer, releasing approx. MNOK 200 after redemption of debt

Skandi Skolten delivered to new owner releasing approx. MNOK 650 after redemption of debt Signed contract in Brazil for sale of five vessels, releasing approx. MNOK 500 after redemption of debt

Overview Group


DOF ASA in brief

Vessels

Fleet 72 vessels in operation

• 68 owned vessels • 4 Subsea vessels chartered in • PSV: 24, AHTS: 18 and Subsea: 30

7 newbuildings • AHTS: 2, Subsea: 5

54 ROVs, 13 ROVs on order NOK 34.4 bn in market value total

fleet (100% basis) in operation Average age 9 years, value adjusted

fleet age of 6.2 years Back log Total NOK 65.6 bn

• Firm contracts : NOK 30.9 bn • Options: NOK 34.7 bn

Global organization Head office in Norway Regional offices in Australia, Singapore,

UK, USA, Canada, Angola, Argentina and Brazil

Total of 5 375 employees Subsea employees: 1 858 Marine personnel: 3 517 Share price NOK 14.95 (31.12.2014)

NAV per share NOK 80.5

7

26

18

24

4 Subsea

AHTS

PSV

Chartered SubseaVessels


Fleet overview and contract coverage

* Including four chartered vessels ** Excluding two old PSVs in lay-up

8

PSV AHTS Subsea Total fleet

DOF ASA/DOF REDERI AS 19 3 2 24

NORSKAN OFFSHORE 5 12 2 19

DOF SUBSEA AS 0 0 29* 29

DOF INSTALLER ASA 0 0 2 2

DOF DEEPWATER AS 0 5 0 5

Total fleet 24 20 35 79

2015 Firm 89%** 76 % 74 % 79 %

2015 Including options 95 % 78 % 80 % 84 %

2016 Firm 58 % 48 % 40 % 48 %

2016 Including options 90 % 56 % 67 % 71 %

Contract coverage

No. of vessels

Good coverage in 2015: • Minor time charter renewal risk in

2015 • Important LOA (7 + 3 yr) secured

in subsea project fleet

Expectations for 2016: • Few vessels off charter next year

(including options) • Despite highly competitive subsea

market, we see good progress in securing long-term work

• Our global footprint and project capability will be vital for securing utilization


A global player

9

FOCUS AREAS

Perth Rio de Janeiro

Buenos Aires

Singapore

Houston

St. Johns

Aberdeen

Cairo

Brunei

Macaé Jakarta

Manila

Luanda

Moscow

Austevoll

Malaysia

34

3

27

9 3

Norway Brazil US/Canada UK Asia Pacific Angola Argentina Marine Crew Total

DOF employees 492 608 225 456 405 17 7 3 165 5 375


Vessel Yard Delivery Type Contract Financing

Skandi Angra Vard Brazil Apr 2015 AHTS 8 yrs Petrobras Funding secured

Skandi Paraty Vard Brazil Oct 2015 AHTS 4 yrs Petrobras Funding secured

Skandi Africa Vard Norway Summer 2015 CSV 5 yrs Technip Funding secured

Skandi TBN Vard 823 Vard Norway 2016 PLSV 8 yrs Petrobras

Skandi TBN Vard 824 Vard Norway 2016 PLSV 8 yrs Petrobras

Skandi TBN PLSV1 Vard Brazil 2016 PLSV 8 yrs Petrobras

Skandi TBN PLSV2 Vard Brazil 2017 PLSV 8 yrs Petrobras

Remaining newbuilding program

10


0

1000

2000

3000

4000

5000

6000

2007 2008 2009 2010 2011 2012 2013 2014

No. Of employees

2005 – 2006 2007 – 2008 2009 – 2010 2011 – 2012 2013 – 2014

Fleet: 41 vessels Fleet: 45 vessels Fleet: 56 vessels Fleet: 69 vessels Fleet: 70 vessels

• Acquisition of Geoconsult (later DOF Subsea)

• DOF Subsea listed on the OSEBX • DOFCON founded and ordered 7 large

CSVs • Acquired 100% shares in Norskan • Purchase 2 subsea vessels and

delivered 4 new-builds from yard (AHTS & PSVs)

• DOF Subsea established office in Perth, Australia (Covus Corp. Ltd)

• DOF Subsea established office in Brazil

• Acquired engineering capacity in Aberdeen, UK (Century Ltd)

• DOF Installer founded • DOFCON merged with DOF Subsea • DOF Deepwater (ex Aker DOF

Deepwater) founded, a JV with Aker Solutions

• Partnered with First Reserve to purchase DOF Subsea ASA and the company was taken private

• Delivery of 9 new-builds from yard (2 PSVs, 1 AHTS and 6 subsea vessels)

• 3 vessels sold

• Delivery and acquisition of 10 vessels (2 PSV, 2 AHTS and 6 subsea vessels)

• DOF Subsea established 2 joint-ventures with Technip in Norway and in Brazil

• 1 vessel sold • Acquired more engineering capacity in

Australia (SWG Offshore)

• Delivery of 12 new-builds from yards (4 PSVs, 3 AHTS, and 5 subsea vessels)

• Purchased Skandi Constructor • 1 vessel sold • 1 new-build (subsea vessel) sold

• Delivery of 2 vessels (PSV and subsea vessel)

• DOF Subsea &Technip JV won a USD 1,7 bn contract with Petrobras for 4 PLSVs

• Signed newbuild contracts for 4 PLSVs • Extensive growth in subsea project

activity • Chartered four external subsea

vessels (incl. 3 Jones Act vessels) for the project activity

• 2 vessels sold • Signed new-build contract for one

large subsea construction vessel

DOF ASA timeline DOF fleet evolution DOF Group employees

0

5000

10000

15000

20000

25000

30000

35000

40000

0

10

20

30

40

50

60

70

80

2007 2008 2009 2010 2011 2012 2013 2014

MN

OK

No.

Of V

esse

ls

No. of operated Vessels MV of Fleet

11

Financials- Management Reporting


All figures in NOK million Q4 2014 Q4 2013 2014 2013

Operating income 2 878 2 633 10 681 9 754 Operating expenses -2 082 -1 806 -7 350 -6 651 Net profit/loss from associates and joint ventures -11 -6 -9 1 Net gain on sale of vessel 264 3 468 8 Operating profit before depreciation- EBITDA 1 050 824 3 790 3 112

Depreciation and write-down -323 -296 -1 127 -1 193 Operating profit- EBIT 727 528 2 663 1 919

Financial income 24 17 77 62 Financial costs -355 -361 -1 419 -1 434 Net realized currency gain/loss -86 17 -212 39 Net profit/loss before unrealised gain/loss long term debt 310 202 1 109 586

Net unrealized currency gain/loss -400 -11 -441 -606 Net unrealized gain/loss on market instruments -201 -38 -218 -5 Profit/loss before tax -291 152 450 -25

Tax 89 -18 51 -27 Net profit/loss -202 134 501 -52

Profit attributable toNon-controlling interest 72 97 418 139 Controlling interest -274 37 82 -191

ALL FIGURES IN NOK MILLION

Result Q4 2014 Comments Operational result PSV: • 88% utilisation PSV fleet • Two vessels in the spot market • Vessels in transit for new contracts • Two vessels in lay-up from December

AHTS: • 80% utilisation AHTS fleet • Vessels on dry-docking and mobilization new

contracts • One vessel in the spot market end of the

period

Subsea: • 93% utilisation vessels on term contracts • 67% utilisation project fleet • High project activity in Atlantic region, lower

towards end of period • Stable activity in APAC, US and Brazil • Vessels in transit and several dockings in the

period

Finance: • Weak NOK in the period, high unrealized

currency loss

13


Amounts in NOK millQ4 2014 Q4 2013 Q4 2014 Q4 2013 Q4 2014 Q4 2013 Q4 2014 Q4 2013

Operating income 304 270 400 333 2 174 2 030 2 878 2 633

Operating result before depreciation and write-down (EBITDA) 103 99 186 166 761* 559 1 050 824

Operating result (EBIT) 48 61 120 112 559 354 727 527

EBITDA margin 34 % 37 % 47 % 50 % 35 % 28 % 36 % 31 %

EBIT margin 16 % 23 % 30 % 34 % 26 % 17 % 25 % 20 %

PSV AHTS CSV/Subsea Total

Segment reporting Q4 2014

14


10 % 18 %

72 %

EBITDA Q4 2014

PSV AHTS CSV

12 %

20 %

68 %

EBITDA Q4 2013

PSV AHTS CSV

* Including gain from sale of assets MNOK 264


Historical Performance Group (excl gain from sale of assets)

15

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

500

1 000

1 500

2 000

2 500

3 000

3 500

Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

EBIT

DA

Mar

gin

%

MN

OK

Operating revenue EBITDA EBITDA margin

Q4 2011 Q4 2012 Q4 2013 Q4 2014Operating revenue 1 862 2 069 2 633 2 878EBITDA 581 685 830 786EBITDA margin 31 % 33 % 32 % 27 %

Non-current assets 26 641 27 630 27 928 28 761Current assets 4 187 4 136 4 817 5 800Total Assets 30 828 31 766 32 745 34 561

Equity 6 669 6 735 6 346 6 869Non-current debt 20 012 21 563 21 576 19 739Current debt 4 147 3 468 4 822 7 954Total Equity and Debts 30 828 31 766 32 745 34 562


Amounts in NOK million 31.12.2014 31.12.2013

ASSETSIntangible assets 1 117 781Vessel and other tangible assets 26 204 26 244Newbuildings 1 075 646Financial assets 365 258Non-current assets 28 762 27 928

Receivables 3 105 2 503Cash and cash equivalents 2 696 2 314Current assets 5 800 4 817

Total assets 34 562 32 745

EQUITY AND LIABILITIESSubscribted equity 1 452 1 452Retained equity 1 960 1 929Non-controlling equity 3 456 2 965Equity 6 869 6 346

Provisions for commitments 140 155Other non-current liabilities 19 599 21 421Non-current liabilities 19 739 21 576

Current part of interest bearing debt 6 049 3 248Other current liabilities 1 905 1 574Current liabilities 7 954 4 822

Total equity and liabilities 34 562 32 745

Balance Q4 2014 Comments • Prepaid instalments new-buildings include 7

vessels (50% share in 4 vessels). Three vessels planned delivered in 2015

• Financial assets include minority share in 4

vessels

• Generally high project activity, impact on receivables (approx. 50% of total revenue represent subsea projects)

• Unsecured debt (bonds) MNOK 4 124 included in long term debt

• Current part long term debt includes bond

(MNOK 1 039), balloons (MNOK 2 300) and normal amortization

16



Q4 2014 Q4 2013 2014 2013

Cash from operating activities 1 050 871 2 963 2 809 Net interest paid -316 -299 -1 352 -1 342 Taxes paid 31 -12 -6 -48 Net cash from operating activities 765 561 1 605 1 419

Payment received on sale of tangible assets 1 148 5 2 082 87 Purchase of tangible assets -615 -128 -2 345 -1 616 Other changes in investing activities -41 47 -126 11 Net cash from investing activities 492 -76 -390 -1 518

Proceeds from borrow ings 1 585 752 4 036 3 186 Prepayment of borrow ings -1 800 -594 -4 952 -2 844 Payment from/to non-controlling interests -4 -98 -7 -99 Net cash from financing activities -219 60 -923 242

Net changes in cash and cash equivalents 1 038 545 293 144

Cash and cash equivalents at the start of the period 1 567 1 759 2 314 2 145 Exchange gain/loss on cash and cash equivalents 91 10 89 25 Cash and cash equivalents at the end of the period 2 696 2 314 2 696 2 314

Cash Flow Q4 2014

17

ALL FIGURES IN NOK MILLION Comments Improved cash from operating activities Investing activities • Two vessels sold during 2014 (one Q2 and one

in Q4)

• One new-build delivered in 2014

• Prepaid instalments 5 new-builds with delivery in 2015 and onwards

Financing activities • Approx MNOK 1 630 represents new financing

(one new-build and one new bond). Remaining net proceeds and repayments represent ordinary refinancing activity during 2014


Key figures Q4 2014

18

Q4 2014 Q4 2013 2014 2013FINANCIAL RESULTEBITDA margin ex net gain on sale of vessel 27 % 31 % 31 % 32 %EBITDA margin 36 % 31 % 35 % 32 %EBIT margin 25 % 20 % 25 % 20 %Cashflow per share 5,70 4,48 20,13 16,03 Profit per share ex. non-controlling interest -2,47 0,33 0,74 -1,72 Profit per share ex. unrealized loss/gain and taxes 3,60 1,65 10,44 5,03

BALANCEReturn on net capital 7 % -1 %Equity ratio 20 % 19 %Value adjusted equity 34 % 37 %Value adjusted equity per share 80 75 Net interest bearing debt 22 856 21 985 Net interest bearing debt ex. unemployed capital 21 781 21 339 Capex -615 -128 -2 345 -1 616


Net interest bearing debt Q4 2014

19

ALL FIGURES IN NOK MILLION 31.12.2014 31.12.2013

Bond loan 4 124 4 722 Debt to credit institutions 15 057 16 265 Total non-current interest bearing liabilities 19 181 20 988

Bond loan 1 039 454 Debt to credit institutions 4 328 2 461 Utilized credit facilities 455 97 Total current interest bearing liabilities 5 822 3 012

Total interest bearing liabilities 25 003 24 000

Cash and cash equivalents 2 696 2 314 Net derivatives -549 -357 Non-current receivables - 58 Total net interest bearing liabilities 22 856 21 985

New builds 1 075 646 Net interest bearing liabilities, excluding unemployed capital 21 781 21 339

Comments Current interest bearing debt: Bonds MNOK 1 039 • DOF08 MNOK 339 and DOFSUB06 MNOK

700 will be fully repaid in 2015

Debt to credit institutions MNOK 4 328 • Balloons MNOK 2 300 • Amortization approx. MNOK 2 000 Cash and derivatives: • MNOK 639 represent cash deposit • Derivatives mainly represent interest

derivatives


Debt maturity profile

DO

F D

OF

Sub

sea

• ECA mainly represent long term funding with BNDES and GIEK

• DOF08 and DOFSUB06 will be fully repaid in 2015

• MNOK 1 000 in balloons in 2015 is repaid or refinanced ytd 2015

DOF GROUP COUNTERPARTY EXPOSURE Q4 2014

20

34%

22%

44%

ECA Bond Other Banks

-

500

1 000

1 500

2 000

2 500

3 000

2015 2016 2017 2018 2019 After

Bank Debt

Bond loans

Balloons

0

500

1000

1500

2000

2500

2015E 2016E 2017E 2018E 2019E After

Bank Debt

Bond Loans

Balloons


Total Fleet Values

Vessels & new-buildings MNOK 40 363

Equipment (subsea) MNOK 1 550

Total Fleet MNOK 41 913

Note: Vessels based on fair market values as of 31 December 2014

• The figures reflects amortization and balloon payments on total debt drawn as per 31 December 2014 and onwards

Combined market value DOF Group fleet including newbuild is NOK 40.4 bn (total value 100% NOK 48.658 bn)

New-building program to be completed in 2017 (including 50% in 4 PLSV’s)

Asset-level gearing on the existing fleet is 61%, decreasing to 26% in 2019

• Significant gearing reduction forecasted

DOF ASA – Asset coverage

21

Gearing forecast – summary

0%

20%

40%

60%

80%

100%

2015 2016 2017 2018 2019

61% 53% 46% 36%

26%

39% 47% 54% 64%

74%

Debt Equity


Sale of 5 vessels in Brazil

22

Design Built Type Skandi Stolmen

UT 755 1997 PSV

Skandi Yare

UT 755 2001 PSV

Skandi Leblon

UT 755 L 2004 PSV

Skandi Flamengo

UT 755 L 2003 PSV

Skandi Copacabana

UT 722 L 2005 AHTS

DOF Subsea


DOF Subsea Group – In brief

24

Fleet • One of the largest subsea vessel owners in the world

• Owns and operates a fleet of 22 vessels, plus 5 newbuilds on order • In addition 4 external vessels on long-term charter • The market value of owned vessels in operation is NOK 15 billion, with a value adjusted

age of approx. 6.2 years • Operates 54 ROVs and 12 ROVs and 1 AUV on order

Global organization • Head office in Bergen • Regional offices in Australia, Singapore, Norway, UK, Angola, US, Canada and Brazil

Total of 1 858 employees • Subsea employees: 1 858 • Of which offshore engineers and project staff: 1 390

Norway Brazil Canada US UK Asia Pacific Angola

345 443 53 172 440 388 17


DOF Subsea Group – In brief

25

Key figures Back-log incl. options NOK 36 billion

Market value of fleet NOK 15 billion

Number of shares 119 733 714

Total Per share

Book equity NOK 6.1 billion NOK 51.05

Value adj. equity NOK 9.0 billion NOK 75.17

Book equity ratio 30.5 %

Value adj. equity ratio 39.3 %

7.3 % CAGR

17.6 % CAGR

Quarterly figures

* According to internal Management reporting

0%

5%

10%

15%

20%

25%

30%

35%

-

500

1 000

1 500

2 000

2 500

Q4 2011 Q4 2012 Q4 2013 Q4 2014

NO

K m

illio

n

Operating revenue EBITDA EBITDA margin


Key credit metrics

26

-

0,50

1,00

1,50

2,00

2,50

3,00

2009 2010 2011 2012 2013 2014

Interest Coverage (EBIT / Interest cost)

-

2,00

4,00

6,00

8,00

10,00

12,00

2009 2010 2011 2012 2013 2014

NIBD/EBITDA

-

0,20

0,40

0,60

0,80

1,00

2009 2010 2011 2012 2013 2014

NIBD/Total assets

-

0,20

0,40

0,60

0,80

1,00

2009 2010 2011 2012 2013 2014

Debt/Total assets


DOF Subsea – Projects

• DOF Subsea has built a global presence over the last 9 years

• DOF Subsea has developed the project business gradually

• Increased project activity driving growth

• Project business going forward • Gradually increase the complexity

of work done (Step by Step) • Build a larger project back-log • Mix between owned and chartered

in vessels

27

* According to internal Management reporting

2012 2013 YTD2014Subsea projects 3 776 4 971 5 378Chartering of vessels 1 472 1 609 2 044Total 5 248 6 580 7 422

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

Operating income by segment

Chartering of vessels Subsea projects Total


Subsea: APAC market Construction in Australia slowing down But being replaced by IRM Operators spend slowing Competition scene changing

DOF SUB: High tendering activity, several long term opportunities Expect better utilisation in 2015 compared to 2014

Brazil market We expect a slow 2015, with few new tenders and pressure on rates

DOF SUB: In general good backlog, but challenging for vessels that are up for renewal

Market and outlook

28


Subsea: North America market Increasing demand for Jones Act Compliance IMR and light construction vessels Market slow down for DSV and larger construction vessels

DOF SUB: Fairly new player in the US subsea market. We expect gradually increased

market share and higher vessel utilisation

Atlantic market We expect Norway to slow down significantly in 2015 We expect also UK to slow down in 2015

DOF SUB: North Sea exposure reduced. Skandi Skolten sold. Only 3 vessels in the North

Sea in 2015 In sum we expect lower activity in our Atlantic region in 2015 compared to 2014

Market and outlook continued

29


Supply: Brazil:

We expect a slower 2015, with few new tenders and pressure on rates

DOF: Only 2 PSV’s and 1 AHTS up for renewal late in 2015. All 3 vessels are Brazilian built and flagged

North Sea:

We expect the North Sea market for both AHTS and PSV to be weak

DOF: Low spot exposure in 2015

Asia Pacific:

We see modest increase in tender activity in the region within supply

The AHTS/PSV market is holding up, but downward pressure on rates

DOF: Only 4 vessels in the region


30


Guidance 2015: High backlog for 2015 already secured

Skandi Skolten and Skandi Aker already delivered to new owners

5 Brazilian vessels planned for delivery to new owners within April 2015

3 new vessels planned delivered in 2015 (Skandi Angra in April 2015, Skandi Paraty in October 2015 and Skandi Africa in August 2015). All 3 have long term contracts

Higher “than normal” uncertainty on earnings from vessels that do not have firm contracts

Operational EBITDA guidance 2015 MNOK 3 100 – 3 500


31

Thank you Presented by Mons Aase - CEO Hilde Drønen - CFO


DISCLAIMER This presentation by DOF ASA designed to provide a high level overview of aspects of the operations of the DOF ASA Group. The material set out in the presentation is current as at 20 February 2015. This presentation contains forward-looking statements relating to operations of the DOF ASA Group that are based on management’s own current expectations, estimates and projections about matters relevant to DOF ASA‘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 the DOF ASA 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 ASA , 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 ASA 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. You should make your own enquiries and take your own advice (including financial and legal advice) before making an investment in the company's shares or in making a decision to hold or sell your shares.

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