Q4 2020
Financial report
© OHT ASA 26 February 2021 |Torgeir E. Ramstad | CEO Tom E. Jebsen | CFO
Disclaimer
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© OHT ASA
Agenda
| 01 |
Fourth Quarter 2020 Financial Report |
| 02 |
Status financing |
| 03 |
Operations and contracts |
| 04 |
Newbuilding activity |
| 05 |
Market & Outlook |
|
|
Fourth Quarter 2020
Q4 2020 Income Statement
| YTD 2020 |
in \$ thousands |
Q4 2020 |
Q3 2020 |
|
| 65,629 |
Total revenue |
8,917 |
17,605 |
|
| 20,718 |
Voyage expenses |
3,572 |
5,068 |
|
| 16,575 |
Ship operating expenses |
3,801 |
4,254 |
|
| 16,166 |
Depreciation and amortization expenses |
4,128 |
3,994 |
|
| 8,431 |
General and administrative expenses |
2,385 |
3,074 |
|
| 61,890 |
Total operating expenses |
13,887 |
16,390 |
|
3,739
2,860 |
Operating profit (loss)
Net financial income (expenses) |
(4,970)
638 |
1,215
2,483 |
|
5,322
0.053 |
Net profit (loss)
Basic and diluted earnings (loss) -
\$ per share |
(5,535)
(0.046) |
3,623
0.038 |
|
| 21,039 |
Adjusted EBITDA |
(842) |
6,343 |
|
Comments
- TCE per day \$11,200 in Q4 (YTD \$25,200), down from \$26,200 in Q3 2020. Utilization on the fleet was 71% in Q4 2020 (YTD 80%), down from 83% in Q3 2020.
- OPEX per day \$9,400 in Q4 (YTD of \$9,100 per day).
- Adjusted EBITDA \$6.3 million in Q3 2020 to negative \$0.8 million in Q4 2020.
- Net financial income decreased from \$2.5 million in Q3 2020 to \$0.6 million in Q4 2020 due to a non-recurring positive currency effect in relation to the proceeds from the private placement in Q3 2020.
© OHT ASA
Fourth Quarter 2020
Q4 2020 Balance sheet and Cash flow
| in \$ thousands |
31 December 2020 |
30 September 2020 |
|
|
|
| Non-current assets |
239,409 |
205,370 |
| Bank deposits and cash equivalents |
14,787 |
71,206 |
| Other current assets |
13,507 |
15,685 |
| Total Assets |
267,703 |
292,261 |
|
|
|
| Total Equity |
233,685 |
236,106 |
| Non-current liabilities |
2,587 |
1,151 |
| Debt to credit institutions |
- |
18,958 |
| Other current liabilities |
31,431 |
36,046 |
| Total equity and liabilities |
267,703 |
292,261 |
|
|
|
| in \$ thousands |
Q4 2020 |
Q3 2020 |
| Net cash flow from operating activities |
(2,659) |
14,849 |
| Net cash flow used in investment activities |
(35,565) |
(15,023) |
| Net cash flow from financing activities |
(18,195) |
59,889 |
Comments
- Contingent liabilities related to Alfa Lift and VIND 1 specified in note 12, totaling \$400 million.
- Payments in relation to investments under the construction contracts.
- \$19 million in debt repayment during the quarter.
- \$50 million RCF undrawn year-end 2020 (and as today 25 February 2021).
© OHT ASA
Status financing
- A condition for acceptance to the main list of Oslo Stock Exchange is the company must be fully financed for at least 12 months from first day of listing.
- We have therefore accelerated our efforts to place a delivery financing for Alfa Lift.
- In addition to the committed funding package from the shipyard's group, we are now working in parallel to secure a West-European bank facility backed by Norwegian ECA which may give even more favourable terms.
Transportation
Operations and contracts
- The second wave of Covid-19 has hit the market surprisingly hard, with delayed or cancelled awards and lower prices.
- No major operational disruptions due to the Pandemic and no recorded cases onboard our ships.
- YTD utilisation stands at 80% and Opex in line with budget of \$9,056.
- All five vessels were fitted with exhaust gas scrubbers in 2019 to a total Capex of \$11.4 million. Savings on fuel cost compared to using Low Sulphur Fuel Oil 0.5% stands at \$7.6 million or a payback of 67% so far.
Hawk in Farsund, Norway loading three ex-O&G vessels which will be converted to other purposes.
Installation
Operations and contracts
- The Dogger Bank A and B projects are in detail design and showing good progress.
- Focus on selection of installation equipment and concluding detailed methods and procedures.
- Alignment with Client's foundation designer is ongoing, with focus on safety in design and efficient installation.
- Expecting to place the rental agreement for the piling hammer soon, which is a major piece of equipment and a large purchase order.
- No undesired incidents and the Client relationship remains good and constructive.
- Start offshore construction in Q3 2022.
The true scale of Alfa Lift is shown by illustrating an Airbus A380 on its main deck.
Newbuilding activity
Alfa Lift
- All but four blocks have been installed on the vessel.
- Crane pedestal has been installed and finalised.
- Vessel ready for undocking on 27 February, previously anticipated in January but this deferral has not caused delay.
- Liebherr on track with main crane, with departure of first batch bound for China in week 9.
- Vessel on track for delivery end 2021, but as we will also install mission equipment before departure from China, we will keep the vessel at the yard into Q1 2022.
VIND 1
- Contract effectiveness reached on 30 November 2020.
- Basic design, choice of key equipment and weight optimisation efforts ongoing.
- Delivery mid-2023.
Transportation
A tightening market will give improved utilisation and pricing
Market
- The spot market in Q4 has been characterised by client hesitation and short-term over-capacity due to the second wave of the Pandemic.
- Whilst this was to an extent foreseen, the strength of the dip was under-estimated.
- A sudden increase in requests to move lift-boats from the Middle East to China, presumably for offshore wind duties, are being entertained.
- Increasing number of requests with 248 received in Q4.
Outlook
- Already seeing a much-improved market with higher willingness to commit leading to full utilisation YTD. As we move into Q2, pricing will follow suit.
- From Q2 2021 we foresee a material reduction on the supply side as large LNG and refinery projects start eating into competitors' capacity. This is a market OHT is not active in.
- The expansion of gas processing facilities in the Middle East will generate a high number of transportations from the Far East and Southeast Asia, which OHT will take a fair share of.
- Growing share of offshore wind related transportation projects for execution from late 2021-2025.
- Asia to Europe
- Europe to US
- We are confident of a strong market outlook in this segment.
Offshore wind market
Substantial increases in ambitions
- Global outlook to 2030 of 230-250 GW according to most analysts.
- 8x installed base over the last 20 years.
- This consists of >96% bottom-fixed.
- Poland have subsequently upped their targets.
- S. Korea have subsequently announced one new bottom-fixed development of more than 8 GW.
Installation
Where will all the required vessel capacity come from?
Market
- EU has recently re-stated their targets for offshore wind:
- At least 60 GW by 2030
- 300 GW by 2050
- Signs that installation contracts for the first industry-scale offshore wind farm in the US have been placed. This will open the floodgates to allow the targeted 27 GW to be installed by 2030.
- No newbuild vessel commitments publicised in Q4 (foundations or WTIV).
Outlook
- We see up to 30 concurrent projects with start-up in 2024/5 when counting only >10 MW turbines and including Taiwan but excluding rest of Asia/China.
- We count 8-10 credible foundation installation spreads where maybe as little as half will have an efficient solution for large monopiles.
- Developers are maturing to the idea that there will not be enough vessel capacity to fulfil their ambitions. With project delays, the issue will be compounded.
- OHT is pre-qualified to bid to all leading developers and have approx. \$2 billion in open tenders. None have been placed so far.
- 3-4 of these may come to an award in Q1 although they may also be delayed into Q2 by the developer.
- OHT will continue to be disciplined wrt. pricing and is confident that our timing to market is spot on.
Summary: Creating a leading Offshore Wind T&I Contractor
A growth story from ~80% reliance on O&G to complete exit in 10 years
Thank you
Torgeir Ramstad
Tom Jebsen
CEO [email protected]
CFO [email protected]