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Awilco LNG

Investor Presentation Feb 19, 2021

3548_rns_2021-02-19_b3b3bef7-1b2f-475f-bd20-5ee126ec85e4.pdf

Investor Presentation

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Q4 2020 19 February 2021

Disclaimer

This presentation may include certain forward-looking statements, forecasts, estimates, predictions, influences and projections regarding the intent, opinion, belief, various assumptions or current expectations of Awilco LNG (the "Company") and it's management with respect to, among other things, (i) goals and strategies, (ii) evaluation of the Company's markets, competition and competitive position, and (iii) anticipated future performance and trends which may be expressed or implied by financial or other information or statements contained herein.

All statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are forward-looking statements. Words such as "may", "could", "should", "would", "expect", "plan", "anticipate", "intend", "forecast", "believe", "estimate", "predict", "propose", "potential", "continue" or the negative of these terms and similar expressions are intended to identify such forward-looking statements.

These forward-looking statements, forecasts, estimates, predictions, influences and projections are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that will occur in the future, some of which are beyond our control and difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements, and no representation is made as to the accuracy of these. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements, forecasts, estimates, predictions, influences and projections are: changes in LNG transportation market trends; changes in the supply and demand for LNG; changes in trading patterns; changes in applicable maintenance and regulatory standards; changes in applicable regulations and laws; technological developments affecting gas and LNG demand; political events affecting production and consumption of LNG; changes in the financial stability of clients of the Company; the Company's ability to secure employment for available vessels and newbuildings on order; increases in the Company's cost base; failure by yards to comply with delivery schedules; changes to vessels' useful lives and residual values; the Company's ability to obtain financing of the newbuildings and lastly unpredictable or unknown factors with material adverse effects on forward-looking statements.

Neither the receipt of this presentation by any person, nor any information contained herein, constitutes, or shall be relied upon as constituting, any advice relating to the future performance of the Company. Each person should make their own independent assessment of the merits of the Company and its business and should consult their own professional advisors. The information and opinions contained in this presentation relate only as of the date of this presentation and are subject to change without notice. Neither the Board of Directors of the Company or the Company and it's management make any representation or warranty, express or implied, as to the accuracy or completeness of this presentation or of the information contained herein and none of such parties shall have any liability for the information contained in, or any omissions from, this presentation, nor for any of the written, electronic or oral communications transmitted to the recipient in the course of the recipient's own investigation and evaluation of the Company or its business. Unless legally required, the Company assumes no responsibility or obligation to update publicly or review any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise.

Company overview

Awilco LNG is a fully integrated pure play LNG transportation provider, owning and operating LNG carriers.

The Company owns and operates two 2013-built 156,000 cbm TFDE LNG carriers, WilPride and WilForce, trading in the short term/spot market achieving about 80 % utilisation since delivery.

Awilco LNG is listed on Euronext Expand with ticker ALNG.

1. Highlights

    1. Financials Q4
    1. Market update
    1. Summary

4 th quarter highlights

Q4 2020 Q3 2020
Net freight income MUSD 11.2 MUSD 2.4
EBITDA MUSD 7.3 MUSD (0.5)
Net profit MUSD 1.2 MUSD (6.5)
  • TCE 1) USD 60,500 pd in Q4 2020 (USD 13,000 pd in Q3 2020 and USD 88,200 pd in Q4 2019)
  • Utilisation of 100 % in Q4 2020 vs 99 % in Q3 2020
  • Both vessels have been fully operational throughout the Covid-19 pandemic
  • WilPride was delivered on a 2-3 months time charter contract in the first half of February with expected gross revenues of between USD 10.3 million and USD 14.3 million

  • Highlights

  • Financials Q4

  • Market update

  • Summary

Q4 2020 income statement

USD million Q4'20 Q3'20 2020 2019
Freight income 12.8 3.7 35.6 37.1
Voyage
related
expenses
(1.6) (1.3) (5.0) (3.4)
Net freight
income
11.2 2.4 30.7 33.7
Other
income
(0.6) - (0.6) 11.6
Operating expenses (2.4) (2.2) (8.9) (16.4)
Administration
expenses
(0.9) (0.7) (3.0) (3.7)
EBITDA 7.3 (0.5) 18.1 25.2
Depreciation (3.1) (3.1) (12.5) (13.1)
Net finance (2.9) (2.8) (13.5) (20.4)
Profit/(loss) before
tax
1.2 (6.5) (7.9) (8.3)
Tax - - - -
Profit/(loss) 1.2 (6.5) (7.9) (8.3)

Q4 2020 financial position

USD million 31.12.20 30.09.20 31.12.19
Vessels
(right-of-use
assets)
338.3 341.1 350.0
Other fixed assets 0.7 0.3 0.0
Total non-current
assets
339.0 341.4 350.0
Trade receivables 0.1 2.1 0.1
Other
short
term assets
0.9 3.2 3.7
Cash and cash equivalents 12.6 8.0 23.5
Total current
assets
13.6 13.2 27.3
Total assets 352.6 354.6 377.4
Total equity 99.5 98.3 107.3
Long-term
interest
bearing
debt
225.0 0.2 0.0
Other
non-current
liabilities
0.5 0.4 0.4
Non-current
liabilities
225.5 0.6 0.4
Short-term interest
bearing
debt
18.8 248.2 260.2
Other
current
liabilities
8.8 7.6 9.5
Total current
liabilities
27.7 255.8 269.6
Total equity
and liabilities
352.6 354.6 377.4

Q4 2020 cash flow

USD
million
Q4'20 Q3'20 2020 2019
Cash Flows
from Operating Activities:
Profit/(loss) before
taxes
1.2 (6.5) (7.9) (8.3)
Income taxes
paid
- - - -
Interest
and borrowing
costs
expensed
2.7 2.8 13.2 20.7
Depreciation,
amortisation and
impairment
3.1 3.1 12.5 13.0
Trade receivables, inventory
and other
short
term assets
3.8 (1.6) 2.4 5.1
Accounts payable,
accrued
exp. and deferred
revenue
1.3 3.3 (3.0) (1.4)
Net cash provided
by / (used in) operating activities
12.3 1.2 17.2 29.2
Cash Flows
from Investing
Activities:
Investment in vessels
/ sale of
vessels
(0.3) - (0.7) (1.0)
Net cash provided
by / (used in) investing
activities
(0.3) - (0.7) (1.0)
Cash Flows
from Financing
Activities:
Proceeds from borrowings - - 262.5 -
Repayment
of
borrowings
(4.7) (4.7) (270.4) (7.6)
Interest
and borrowing
costs
paid
(2.6) (3.3) (19.5) (19.6)
Net cash provided
by / (used in) financing
activities
(7.3) (8.1) (27.4) (27.2)
Net change in cash and cash equivalents 4.7 (6.9) (10.9) 1.0
Cash and cash equivalents
at start of
period
8.0 14.8 23.5 22.5
Cash and cash equivalents
at end of
period
12.6 8.0 12.6 23.5
  1. Highlights

  2. Financials Q4

  3. Market update

  4. Summary

Spot rates

  • Sharp increase in LNGC spot rates throughout Q4 2020 into Q1 2021 largely driven by higher Asian LNG prices
  • Historical average TFDE market rate USD 76,000 pd with ~45 % volatility

Source: Fearnley LNG, Company calculations

LNG demand growing

DENTED BY COVID-19, BUT STILL UP Y-O-Y

  • LNG trade in 2020 up by 0.6 % y-o-y (~2 MT)
  • Depending recovery from pandemic, large catchup in under utilised production expected for

Gas prices with historical lows and highs

  • Global gas prices bottomed in May 2020 and reached historical highs in Asia at year-end
  • After winter peak, prices normalising
  • Geographical price differential (arbitrage) creates additional demand for transportation

Source: Fearnley LNG, CME, Company calculations

The BIG picture by DNV GL

PEAK OIL AND COAL NATURAL GAS GROWING

  • Peak coal in 2014
  • "We predict peak oil has already happened" - DNV GL
  • Natural gas the go-to-fuel for flexible power generation to complement renewables and for hard-to-decarbonise industry and shipping

  • Natural gas largest energy source in the 2020s

  • More than 1,300 bn USD of LNG infrastructure investments is expected in the 2020s
  • LNG trade is expected to triple to 2050

200

• Decarbonisation of natural gas may unlock further demand

MTPA MTPA LNG TRAINS UNDER CONSTRUCTION

  • 150 MTPA new capacity currently under construction

  • Further FIDs needed to meet expected demand from 2025
  • More than 800 MTPA of new liquefaction capacity is in various stages of planning

Source: IGU, Company presentations, Bloomberg

LNG fleet and orderbook

  • Fleet growth of 5.7% during 2020, bringing total LNGC fleet to 539 vessels > 125' cbm at year-end 2020
  • 33 newbuilding orders made in 2020 all linked to long term hire and upcoming projects
  • Current orderbook 106 LNGC or 20 % of existing fleet

Source: Fearnley LNG

  1. Highlights

  2. Financials Q4

  3. Market update

  4. Summary

Summary

  • ➢ Covid-19 pandemic severely impacted global economic activity and resulted in challenging conditions in the LNGC market in Q2 and Q3 2020. Sharp increase in LNGC spot rates throughout Q4 2020 largely driven by higher Asian LNG prices as buyers underestimated demand during cold winter.
  • ➢ LNG trade flow in 2020 was flat despite 20 mtpa of new liquefaction capacity being commissioned, which expected to increase 2021 production when demand catches up
  • ➢ Mid- and long-term demand for LNG transportation remains strong
  • ─ Natural gas is cheap, abundantly available, environmentally friendly and flexible
  • ─ ~30 % growth in LNG supply vs 20 % fleet growth
  • ─ Tonne-mile demand growth expected from increased LNG demand in Asia being met by US supplies
  • ➢ Awilco LNG
  • ─ Fully integrated and proven track record
  • ─ Lean and cost focused organisation
  • ─ No debt maturities until 2030

A Fully Integrated Pure Play LNG Transportation Provider

Jon Skule Storheill CEO Mobile: +47-9134 4356 E-mail: [email protected]

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