Quarterly Presentation Q2 2019 - DOF Subsea
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Quarterly Presentation Q2 2019 DOF Subsea Group
Transcript of Quarterly Presentation Q2 2019 - DOF Subsea
Quarterly Presentation Q2 2019
DOF Subsea Group
DOF Subsea 2
Q2 2019 highlights
• The operating revenue for the quarter was NOK 1 257 million1), EBITDA
was NOK 445 million1) and overall vessel utilisation was 70%
• The Group secured several short-term contracts in the Subsea/IMR Project
segment
• Skandi Seven commenced her contract with Sapura Energy in Brazil, where she
will perform a Riser and Umbilical installation on a FSRU.
• 3-year renewal of frame agreement in the US Gulf of Mexico utilising Harvey Deep
Sea
• Geosund was awarded 60 days of work on the UKCS
• Skandi Skansen was awarded a contract for mooring installation for Equinor and
thereafter a decommissioning job on the UKCS
• The JV PLSV Skandi Niteroi was committed to TechnipFMC for the
Peregrino Project in Brazil
• The Group has aligned the definition of the liquidity covenants in the bond
loans with the liquidity covenants in the bank loans
The Board and management
are working towards a long-
term financial solution within
the time frame given in the
waivers received from the
banks.
1) Note: Figures according to management reporting
DOF Subsea 3
DOF Subsea Group at a glance
2005DOF Subsea
established
NOK 1.3bn1)
Revenues
Q2’19
1 2392)
Subsea employees
worldwide Q2’19
NOK 13.8bnFirm backlog
Q2’19
273)
Subsea vessels
74ROVs
ModernState-of-the-art
asset base
IntegratedSupplier of subsea
offshore services
1) Note: According to management reporting
2) Note: Excluding marine crew
3) Note: Including chartered-in vessels Harvey Deep-Sea, Harvey Subsea, Skandi Chieftain and Skandi Darwin
DOF Subsea
Global footprint
ATLANTIC
NORTH AMERICA
BRAZILASIA PACIFIC
Macaé
Rio de Janeiro
Buenos
Aires
Houston
St John’s
Aberdeen
Bergen
Luanda
Singapore
Manila
Melbourne
Jakarta
BruneiKuala Lumpur
Darwin
Perth
3949
36010
2733
2125
1) Note: Number of employees as at end of Q2’19 (excluding marine crew).
2) Note: Vessels in operation as at end of Q2’19, including 3 chartered-in vessels.
Local operating model ensuring on-the-ground responsiveness towards clients’ needs
4
DOF Subsea 5
11 1113
1618
21
2425
2627
24
21
2527 27
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q22019
Development in number of vessels in operation2)
Owned vessels Chartered-in vessels
337
553 563
8971014
1246
1492
1354
1667
1858
1566
12781214
13111239
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q2 2019
Development in number of DOF Subsea Employees1)
Large and global organisation following multiple
acquisitions from 2005-2010
More than a decade of structural growth and consolidation
SEMAR
Focus on consolidation and streamlining of
business operations to improve efficiency and
competitiveness in weak market
DOF Subsea established following the acquisition
of Geoconsult. The Company was listed on the
Oslo Stock Exchange second half 2005.
First Reserve acquires 49% of DOF Subsea, which
in the following is delisted from the Oslo Stock
Exchange
Expanding organisation on the back of several
large contract awards. Number of employees and
vessels peaking at 1 858 and 27, respectively
2010Century SubseaCovus Subsea
CSL
2005
2008
2014
2016
Awarded four PLSV long-term contracts in joint
venture with TechnipFMC2013
SWG Offshore
1) Note: Marine crew not included
2) Note: Newbuild not included
3) Note: Period-end numbers
2018
Delivery of two newbuilds entering into long-term
contracts and commencement of two long-term
IMR contracts2017Delivery of one JV newbuild entering into long-term
contract and award of several long-term contracts
within both business segments
2019
Delivery of the last JV newbuild entering into a long-
term contract and award of several contracts within
both business segments
DOF Subsea 6
Key financials1)
Revenue EBITDA2) Firm backlog
1) Note: Figures according to management reporting
2) Note: EBITDA excl. profit from sale of non-current assets
LTM = Last Twelve Months
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
2012 2013 2014 2015 2016 2017 2018 LTM
NOK million
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
500
1 000
1 500
2 000
2 500
2012 2013 2014 2015 2016 2017 2018 LTM
NOK million EBITDA margin
-
5
10
15
20
25
2012 2013 2014 2015 2016 2017 2018 Q22019
NOK billion
Segment highlights
DOF Subsea 8
Two business segmentsDOF Subsea Group
Long-term Chartering1)
Revenues Q2’192)
NOK 480 million
EBITDA Q2’193)
NOK 366 million
~76% margin
Firm backlog4)
NOK 10.1bn
1) Note: Long-term Chartering comprises 7 PLSVs in operation, plus Skandi Acergy and Skandi Patagonia
2) Note: According to management reporting
3) Note: According to management reporting
4) Note: Firm backlog as at end of Q2’19
5) Note: Including 3 chartered-in vessels
9 vessels in
operation Q2’19
Long-term
charters
Vessel
capabilitiesCapex
spending
Subsea / IMR Projects
Revenues Q2’192)
NOK 776 million
EBITDA Q2’193)
NOK 79 million
~10% margin
Firm backlog4)
NOK 3.7bn
1 239 Employees
Q2’19
18 vessels in
operation5) Q2’19
Engineering
capabilities
Framework
agreements
Opex
spending
No newbuilds
DOF Subsea 9
Numerous projects completed and ongoing worldwide
Built a leading subsea projects division for over a decade
• Subsea project activity established with a global footprint in all key offshore regions
• High quality asset base leveraging unrivalled subsea and vessel operating competence
A clear action plan to pursue further opportunities
• Continue to increase the scope and complexity of operations
− Strengthen presence in selected geographies
− Further build project backlog with core focus on IMR projects
Subsea/IMR Projects
Selected Mooring projects – Last 5 yearsSelected IMR projects – Last 5 years
✓ 3 Petrobras ROV Contracts (2019-2021)
✓ ConocoPhillips ROV Services (2019-2024)
✓ Petrobras DSV Contract (2018-2021)
✓ Petrobras RSV Contract (2018-2020)
✓ ENI Angola IMR Contract (2017-2019)
✓ Husky Energy IMR Contract (2017-2027)
✓ Shell Prelude IMR Contract (2017-2022)
✓ Chevron Gorgon IMR Contract (2015-2020)
✓ Shell Malampaya IMR Contract (2014-2021)
✓ Helang FPSO Mooring and Hook-up (2019)
✓ Ehra FPSO Mooring Replacement (2019)
✓ Egina FPSO Hook-up (2018)
✓ Lam Son Mooring Replacement (2017)
✓ Bergading FPSO Pre-Tensioning (2017)
✓ Yinson OCTP FPSO Field Dev. (2016-2017)
✓ Bongkot Mooring Replacement PTTEP (2017)
✓ Raroa Mooring OMV (2016-2017)
✓ Gina Krog TMRS Teekay (2016)
✓ Catcher Mooring Installation BWO (2016)
DOF Subsea 10
DOF Subsea provides state-of-the-art vessels to leading players
Skandi Acergy Skandi Acu Skandi Africa
Skandi Niteroi Skandi Patagonia Skandi Vitoria
Skandi Buzios Skandi Recife Skandi Olinda
Day-rate basedRemuneration
Strong long-term contract coverageContracts
High-end vessels operating advanced subsea projects for third party EPCI contractors
Operations
Selected clients
Construction
support vessel
Construction & pipe
laying vessel
Construction & pipe
laying vessel
Construction & pipe
laying vessel
Construction & pipe
laying vessel
Construction & pipe
laying vessel
Construction & pipe
laying vessel
Dive support
vessel
Construction & pipe
laying vessel
9
vessels in
operation
No
contracted
newbuild
NOK 10.1bn
firm backlog
per Q2’19
Long-term Chartering
DOF Subsea 11
Selected long-term contracts
• Long-term FLNG IMR contract
awarded in Australia with
Shell
• 5 years + 4 years options
• IMR scope comprising project
management, engineering,
logistics, vessel and ROV
services
• Utilising Skandi Darwin
Prelude FLNG
Nov 2017
• Long-term contract with
Petrobras
• 8 years + 8 years options
• Vessel owned in joint venture
with TechnipFMC
• Built in Brazil with 300t VLS
• Long-term DSV contract with
Petrobras
• 3 years + 2 years options
• ROV and diving services
• Partnered up with diving
partner in Brazil
Skandi Recife
Jun 2018 • Long-term contract with
Petrobras
• 8 years + 8 years options
• Vessel owned in joint venture
with TechnipFMC
• Built in Brazil with 300t VLS
• Long-term contract with
Petrobras in Brazil
• Vessel and ROV services
Skandi Salvador
Aug 2018
Skandi Achiever
Sep 2018
Skandi Olinda
Feb 2019
2nd quarter 2019
DOF Subsea 13
Quarterly performance1)
1) Note: Figures according to management reporting, and excluding profit from sale of non-current assets
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1 000
1 500
2 000
2 500
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
EB
ITD
A m
arg
in
NO
K m
illi
on
Operating revenue EBITDA EBITDA margin
NOK million Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Operating revenue 1 962 1 991 1 642 1 406 1 660 1 232 1 128 982 1 199 1 093 1 275 1 053 1 203 1 184 1 166 1 103 1 257
EBITDA 515 553 516 456 510 447 320 279 400 332 402 310 372 376 342 365 445
EBITDA margin 26,2 % 27,8 % 31,4 % 32,4 % 30,7 % 36,3 % 28,4 % 28,4 % 33,4 % 30,4 % 31,5 % 29,4 % 30,9 % 31,8 % 29,3 % 33,1 % 35,4 %
Current assets 3 414 3 674 3 752 2 900 3 010 2 742 2 483 2 808 2 595 2 501 2 607 2 399 2 474 2 320 2 532 2 317 2 219
Non-current assets 16 578 16 447 16 818 17 652 18 206 18 514 18 043 18 087 18 428 17 926 17 829 16 881 17 684 17 523 17 818 18 840 18 571
Total assets 19 992 20 121 20 570 20 552 21 216 21 256 20 526 20 896 21 023 20 427 20 436 19 280 20 158 19 843 20 350 21 156 20 790
Current liabilities 4 577 4 492 3 650 2 991 3 022 2 645 2 478 2 444 3 010 3 051 2 440 2 345 2 879 2 983 3 484 3 533 3 932
Non-current liabilities 9 009 9 988 11 228 11 482 11 864 12 174 11 993 12 503 11 942 11 221 11 648 10 485 11 110 10 798 11 130 11 915 11 126
Equity 6 405 5 641 5 692 6 078 6 330 6 437 6 055 5 948 6 071 6 156 6 348 6 450 6 170 6 063 5 735 5 708 5 732
Total equity and liablilites 19 991 20 121 20 570 20 551 21 216 21 256 20 526 20 896 21 023 20 427 20 436 19 280 20 158 19 843 20 350 21 156 20 790
DOF Subsea 14
Debt maturity profile1)
Increased refinancing risk of the bank balloons
Debt maturity profile, 2019E – 2023E
1) Note: Figures according to management reporting and based on exchange rates as at end of Q2’19
The figures reflect amortization and balloon payments on outstanding debt as at end of Q2’19
DOF Subsea 15
Backlog1)
1) Note: Contract backlog excludes master service agreements (MSAs) within the Subsea/IMR Projects segment – only confirmed POs are included in the backlog
As at 30 June 2019, the Group’s firm contract backlog was NOK 13.8 billion
2019 2020 2021 2022 2023 Thereafter
Option 0,0 0,4 0,9 1,1 1,2 13,1
Firm 2,1 2,9 2,3 1,8 1,6 3,1
0
2
4
6
8
10
12
14
16
18
NO
K B
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on
Firm Option
DOF Subsea 16
Modern high-end fleet
• Modern fleet with a value adjusted average fleet age of 5.71) years
• High-end vessels, capable of a wide scope of worldwide operations
1) Note: Excluding chartered-in vessels, and figures as at end of Q2’19
Skandi Vinland, CSV built 2017
Skandi Buzios, PLSV built 2017
Skandi Recife, PLSV built 2018
Skandi Olinda, PLSV built 2019
2000-2006; 6
2007-2012; 12
2013-2019; 6
Year of delivery DOF Subsea fleet1)
-
2,0
4,0
6,0
8,0
10,0
12,0
Fleet age
Average fleet age age
Value adjusted average fleet age
DOF Subsea 17
Outlook
• Operational EBITDA in second half of 2019 to be slightly better than first half
• Still challenging markets within the Subsea/IMR Segment
• Still challenging financial market
• The Board and management are working towards a long-term financial solution
within the time frame given in the waivers received from the banks
Appendix
DOF Subsea 19
Condensed profit & loss1)
1) Note: Financial statement according to IFRS. Condensed financial statement according to management reporting is included in the DOF Subsea Quarterly Financial Report
Profit & loss (NOK million) 2Q 2019 2Q 2018 YTD 2019 YTD 2018
Operating revenue 962 999 1 806 1 839
Operating expenses -756 -803 -1 443 -1 511
Share of net income of associates and joint ventures 99 116 167 221
Profit from sale of non-current assets 0 0 0 1
Operating profit before depreciation (EBITDA) 305 312 530 550
Depreciation and impairment -191 -193 -358 -425
Operating profit (EBIT) 114 119 172 125
Financial income 20 13 41 27
Financial expenses -142 -122 -288 -234
Realised net gain / loss on derivative instruments and currency position 29 -8 -27 -32
Unrealised net gain / loss on derivative instruments and currency position 1 -274 119 19
Net financial income / loss -91 -390 -155 -221
Profit / loss before tax 23 -271 17 -96
Income tax expense -8 -20 -28 -16
Profit / loss for the period 14 -292 -10 -112
DOF Subsea 20
Condensed balance sheet1)
1) Note: Financial statement according to IFRS. Condensed financial statement according to management reporting is included in the DOF Subsea Quarterly Financial Report
Assets (NOK million) 31.06.2019 31.06.2018 31.12.2018
Tangible assets 11 136 11 379 11 100
Goodwill 334 361 337
Deferred tax asset 220 227 220
Investment in associates and joint ventures 1 712 1249 1 553
Non-current receivables 1 170 1 132 1 204
Non-current assets 14 571 14 348 14 414
Trade receivables 697 736 631
Other current receivables 249 277 289
Total current receivables 946 1 014 920
Restricted cash 183 258 223
Unrestricted cash and cash equivalents 634 759 919
Cash and cash equivalents 817 1 017 1142
Current assets 1 763 2 031 2 062
Total assets 16 334 16 378 16 476
Equity and liabilities (NOK million) 31.06.2019 31.06.2018 31.12.2018
Paid-in equity 4 344 4 344 4 344
Other equity 1 191 1 595 1 197
Non-controlling interests 197 230 194
Total equity 5 732 6 170 5 735
Bond loans 2 087 1 928 2 480
Debt to credit institutions 4 781 5 840 5 278
Lease liabilities 350 0
Other non-current liabilities 17 33 34
Non-current liabilities 7 234 7 802 7 793
Current portion of debt 2 663 1 581 2 177
Trade payables 420 439 406
Other current liabilities 284 387 366
Current liabilities 3 367 2 407 2 949
Total liabilities 10 601 10 209 10 742
Total equity and liabilities 16 334 16 378 16 476
DOF Subsea 21
DISCLAIMER
This presentation by DOF Subsea AS is designed to provide a high-level overview of aspects of the operations of the DOF Subsea AS
Group. The material set out in the presentation is current as at 19 August 2019.
This presentation contains forward-looking statements relating to operations of the DOF Subsea AS Group that are based on
management’s own current expectations, estimates and projections about matters relevant to DOF Subsea AS‘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 Subsea
AS 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 AS , 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
AS 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.
Thank you
