Nov 11, 2016 - Normand Maximus | Offshore Subsea Construction and Pipelay ... Order book development .... for a vessel f
Disclaimer This presentation should be read in conjunction with Vard Holdings Limited’s results for the period ended 30 September 2016 in the SGXNet announcement. Financial figures are presented according to SFRS. This presentation may contain forward-looking statements that involve risks and uncertainties. Such forward-looking statements and financial information involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements and financial information. Such forward-looking statements and financial information are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. As these statements and financial information reflect our current views concerning future events, these statements and financial information necessarily involve risks, uncertainties and assumptions. Actual future performance could differ materially from these forward-looking statements and financial information. You are cautioned not to place undue reliance on these forward looking statements, which are based on the Company’s current view of future events.
11.11.2016 | Page 2
3Q 2016 Results Presentation Vard Holdings Limited 11 November 2016
3Q 2016 key messages
Revenue of NOK 1 503 million, down from NOK 2 271 million in 3Q 2015 EBITDA (before restructuring cost) of NOK 33 million, up from NOK -467 million in 3Q 2015 EBITDA margin (EBITDA before restructuring cost to total operating revenues) of 2.2%, up from -20.6% in 3Q 2015 Order intake of NOK 3 293 million; 7 new vessel contracts secured 1) 45 vessels in the order book as at 30 September 2016, of which 37 are VARD designs Diversification strategy yields strong order intake; confirmation of four cruise vessel orders and signing of two new ones during the quarter; Module Carrier Vessel (MCV) project expanded with five vessels to 20 Investments in Romania under way to support the new business plan Completion of large OSCV projects in Norway resulting in reduced offshore exposure
1) Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q 2016. 11.11.2016 | Page 4
Normand Maximus | Offshore Subsea Construction and Pipelay Vessel for Solstad
3Q 2016
Business update
11.11.2016 | Page 5
Vessel deliveries One vessel delivered in 3Q 2016
Lucio Costa From Vard Promar (Brazil) to Transpetro
Design: WBDC | 7000 m3 LPG Carrier
11.11.2016 | Page 6
New contracts 7 new contracts secured in 3Q 2016
3 Module Carrier Vessels (MCV) for Kazmortransflot
2 Luxury Expedition Cruise Vessels 1) for Hapag-Lloyd Cruises
2 Module Carrier Vessels (MCV) for Topaz Energy and Marine
Design: VARD 9 28| Delivery: 3Q 2017 – 1Q 2018 Aggregate contract value: Approx. USD 70 million
Design: VARD 6 07| Delivery: 1Q 2019 and 4Q 2019 Contract value: Undisclosed
Design: VARD 9 21| Delivery: 2Q 2018 Aggregate contract value: Approx. USD 40 million
1) Contracts signed in 3Q 2016 and confirmed in 4Q 2016. Included in 3Q 2016 new order intake. 11.11.2016 | Page 7
Order book development New order intake during the period (NOK million)
Order book value at the end of the period (NOK million)
15 vessels 14 174
16000
28 vessels 11 117
10000
17 743
16 675
14000 12000
19 356
20000
15 096 16 vessels 9 501
27 vessels 10 161
16 vessels 9 450
14 076
15000
10 230 8000
10000
6000
3Q 2016: 3 293million 1H 2016: 6 868 million
6 vessels 3 594
4000
5000
2000 0
0 2011
2012
2013
2014
2015
9M 2016
2011
2012
2013
2014
2015
9M 2016
As at 30 September 2016, the Group had 45 vessels in the order book, 37 of which will be of VARD’s own design.
Note: Includes variation orders, repair and conversion, and equipment sales. Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q 2016. 11.11.2016 | Page 8
Order book status Order book as of 30 September 2016 (# of vessels) Type Under construction 2019
Offshore MCV 1) Cruise Other Offshore MCV Cruise Other Offshore MCV Cruise Other Offshore MCV Cruise Other Offshore MCV Cruise Other
Delivered
4
2018
17
2017
17
2016
7
9
2015
12
0
2
4
6
8
10
12
1) Module Carrier Vessels Note: Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q 2016. 11.11.2016 | Page 9
14
16
18
Norway
Romania
Vietnam
Brazil
Total
4
4 1
1 9
3
4
4
2 1 6
17
1
4+4
1+1
17 2 1 7+9
1 5
1 3
3 1 12
1
1
1
Order book by region and vessel type By region
Region
Norway
By vessel type Order book 30 Jun 2016
Deliveries 3Q 2016
Order intake 3Q 2016
17
-
2
Order book 30 Sep 2016
19
Romania
10
-
4
14
Vietnam
7
-
1
8
Brazil
5
1
-
4
Total
39
1
7
1) Module Carrier Vessels Note: Includes contracts for two cruise vessels signed in 3Q 2016 and confirmed in 4Q 2016. 11.11.2016 | Page 10
45
Order book 30 Jun 2016
Deliveries 3Q 2016
Order intake 3Q 2016
AHTS
-
-
-
-
PSV
3
-
-
3
OSCV
11
-
-
11
MCV 1)
15
-
5
20
Cruise
4
-
2
6
Other
6
1
-
5
Total
39
1
7
45
Vessel type
Order book 30 Sep 2016
Operations – Norway
Several large OSCV projects delivered or in final stages of outfitting at the Norwegian yards «Normand Maximus» – Offshore Subsea Construction and Pipelay Vessel for Solstad – delivered in October from Vard Brattvaag; largest vessel ever built by VARD «Skandi Buzios» – Offshore Subsea Construction and Pipelay Vessel for Techdof Brasil – delivered from Vard Søviknes; now undergoing installation of the pipelay tower in the Netherlands «Deep Explorer» – Diving Support Vessel for Technip – completed at Vard Langsten; currently undergoing final testing of diving equipment Generally low yard utilization Repair, conversion and upgrade work taken on to support activity level at the yards Temporary layoffs to buffer effects of low and volatile workload
11.11.2016 | Page 11
Skandi Buzios | Offshore Subsea Construction and Pipelay Vessel for Techdof Brasil
Operations – Romania
Yards well utilized with Module Carrier Vessel (MCV) project, cruise vessel hull sections under construction for Fincantieri, and VARD cruise vessel projects
MCV project progressing as planned; first steel cut for all vessels, and keel laid for several
Investments in increased capacity and capabilities in Tulcea under way to support the new business plan
New gantry crane
Second panel line
Expansion of building berth
Extension of the launching barge to accommodate vessels up to 210 x 49 meters
Both Tulcea and Braila yards hiring again
11.11.2016 | Page 12
Vard Tulcea – view of the fabrication hall
Operations – Vietnam
Stable operations
OSCV for Farstad soon ready for delivery
Investment in extension of hull factory completed during period of lower activity
Yard well utilized with MCV project; number of vessels to be built in Vietnam increased to seven
Close cooperation with Vard Tulcea and Vard Braila through joint project management on MCV project, leveraging on exchange of experience and best practice Vard Vung Tau – extension of the hull factory
11.11.2016 | Page 13
Operations – Brazil
Niterói yard closed down; key resources relocated to Vard Promar Ownership stake in Vard Promar increased to 95.15% through conversion of shareholder loans, resulting in more balanced financial structure and greater strategic flexibility Major rightsizing process ongoing; strong focus on cost reduction and organizational development Fourth LPG carrier for Transpetro delivered; two more under construction for delivery in 2017 PLSV project for DOF and Technip progressing; both vessels launched
11.11.2016 | Page 14
Vard Promar – two PLSVs under construction for Dofcon Navegação
Equipment & Solutions business
Important order wins for Vard Electro Engineering and electrical installation package for the UK’s new polar research vessel, under construction at Cammell Laird shipyard in the UK Equipment and electrical installation package for a vessel for the Government of India, under construction at Cochin shipyard in India
Breakthrough design contract for Vard Marine Design developed by Vard Marine selected for the US Coast Guard’s new Offshore Patrol Cutter (OPC) program, to be built at Eastern Shipbuilding in the US
11.11.2016 | Page 15
VARD 7 110 | US Coast Guard Offshore Patrol Cutter
Aquaculture business
Fish feeding and live fish treatment barges delivered from Vard Aukra to clients in Norway, and new orders secured
Equipment supplier to the aquaculture industry, Storvik Aqua, acquired
Feeding, measurement and control solutions to the aquaculture industry
Production facility in Norway and subsidiaries in Chile and Scotland
Enabling Vard Aukra to deliver specialized vessels for fish farming with innovative integrated solutions, and broaden its client base
11.11.2016 | Page 16
Storvik Aqua – leading equipment supplier to the aquaculture industry
3Q 2016
Key financials
11.11.2016 | Page 17
Revenues, EBITDA and net income Revenues (NOK million)
EBITDA (NOK million) 400
7 823 8 000
200
5 744
2 271
6 000
1 503
0
4 000 5 552
2 000
1.8%
-356
101
111
68
33
1H 2016
3Q 2016
(200)
4 241
0
(400) 9M 2015
9M 2016
1H 2015
-1 122
-520
-128
0
-24
-277
3Q 2015
Profit (loss) attributable to equity holders of the Company (NOK million)
Profit (loss) for the period (NOK million)
(200)
-4.6%
-104
(400)
-96
0 -34
-16
-80
1H 2016
3Q 2016
(200) -486
(600)
-845
(800)
(400)
(1 000) (1 200)
(600) 1H 2015
11.11.2016 | Page 18
3Q 2015
1H 2016
3Q 2016
1H 2015
3Q 2015
Income statement 3Q ended 30 September
9M ended 30 September
(NOK million)
2016
2015
2016
2015
Revenue
1 503
2 271
5 744
7 823
33
(467)
101
(356)
EBITDA margin (%)
2.2%
-20.6%
1.8%
-4.6%
Restructuring cost
(27)
(36)
(76)
(56)
Depreciation, impairment and amortization
(51)
(51)
(153)
(154)
Operating profit (loss)
(45)
(554)
(128)
(566)
Net financial income / (cost)
(29)
(258)
44
(479)
Profit (loss) before tax
(83)
(812)
(102)
(1 041)
(104)
(845)
(128)
(1 122)
Non-controlling interest
(24)
(359)
(32)
(602)
Profit (loss) attributable to equity holders of the Company
(80)
(486)
(96)
(520)
EBITDA before restructuring cost
Profit (loss) for the period
11.11.2016 | Page 19
Cash and cash equivalents, and loans and borrowings Net cash (NOK million)1
Construction loans (NOK million) (1) Cash and cash equivalents less sum of shortterm and longterm interest bearing liabilities, excluding construction financing
0 -200 -400 -1 115
-600
-1 156
-800 -1 000 -1 200
10 000 8 000 6 000 4 000
7 483
2 000 0
31 Dec 2015
30 Sep 2016
Cash and cash equivalents (NOK million)
31 Dec 2015
906
919
1 200
800
141
199
1 000 525
600 765
30 Sep 2016
Loans and borrowings, non-current (NOK million)
1 000
400
9 435
104 720
800 600
1 200
1 056
400 421
200 0
200 0
30 Sep 2015
31 Dec 2015
Non-restricted Cash 11.11.2016 | Page 20
30 Sep 2016
Restricted Cash
31 Dec 2015
30 Sep 2016
Balance sheet As at: (NOK million)
30 September 2016
31 December 2015
3 742
3 760
525
919
Other current assets
13 022
16 216
Total assets
17 289
20 895
Total equity
2 509
2 961
Loans and borrowings, non-current
1 056
1 200
606
209
Construction loans
7 483
9 435
Other current liabilities
5 635
7 090
Total liabilities
14 780
17 934
Total equity and liabilities
17 289
20 895
Non-current assets Cash and cash equivalents
Other non-current liabilities
11.11.2016 | Page 21
Cash flow statement 3Q ended 30 September
9M ended 30 September
(NOK million)
2016
2015
2016
2015
Cash flows from / (used in) operating activities
(221)
(96)
144
(1 133)
Cash flows from / (used in) investing activities
(59)
(72)
(157)
(245)
Cash flows from / (used in) financing activities
(106)
200
(299)
227
Net change in cash and cash equivalents
(386)
32
(312)
(1 151)
Effects of currency translation differences on cash and cash equivalents
(15)
(62)
13
(50)
Cash and cash equivalents excluding restricted cash at the beginning of the financial period
822
795
720
1 966
Restricted cash at the end of the financial period
104
141
104
141
Cash and cash equivalents at the end of the financial period
525
906
525
906
11.11.2016 | Page 22
Earnings per share 3Q ended 30 September
9M ended 30 September
2016
2015
2016
2015
Earnings for the period (NOK million)
(80)
(486)
(96)
(520)
Earnings for the period (SGD million)
(14)
(81)
(16)
(87)
Weighted average number of shares (million)
1 180
1 180
1 180
1 180
Earnings per share (NOK)
(0.07)
(0.41)
(0.08)
(0.44)
Earnings per share (SGD cents)
(1.19)
(6.86)
(1.36)
(7.37)
Exchange rates (SGD/NOK)
5.899
5.982
5.899
5.982
Note:
Earnings per ordinary share for the financial period attributable to equity holders of the Company SGD amounts are translated from NOK based on the exchange rates prevailing at the reporting dates.
11.11.2016 | Page 23
Net assets value per share As at: 30 September 2016
31 December 2015
2 477
3 798
420
609
1 180
1 180
Net assets value per ordinary share (NOK)
2.10
3.22
Net assets value per ordinary share (SGD)
0.36
0.52
5.899
6.239
Net assets value at the end of the period (NOK million) Net assets value at the end of the period (SGD million) Number of shares (million)
Exchange rate (SGD/NOK)
Note:
Net assets value for the Group per ordinary share based on issued share capital of the issuer SGD amounts are translated from NOK based on the exchange rates prevailing at the reporting dates.
11.11.2016 | Page 24
3Q 2016
Outlook
11.11.2016 | Page 25
Outlook
Continued focus on diversification strategy Expedition cruise vessel market Leads in fishery, offshore wind and OPV markets Opportunities for design, electrical engineering and installation, and equipment businesses Growth in aquaculture business on the back of Storvik Aqua acquisition
Good yard utilization in Romania and Vietnam Investments in Romania to be accelerated to realize full potential of the new business plan Cooperation across yards and focus on operational excellence
Norway still experiencing low utilization in the near term, but gearing up for outfitting of cruise vessels Arrival of the first cruise vessel hull in Norway scheduled for 2H 2017
Brazil operations now concentrated on Promar yard and stabilizing, but operational risk remains elevated
Offshore oil & gas market continously monitored, but no significant rebound in demand expected in the near term Working with clients on cost-effective solutions to address industry challenges without compromising innovation, performance, quality and safety
11.11.2016 | Page 26
3Q 2016
Q&A
11.11.2016 | Page 27
