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ADS Maritime Holding
Investor Presentation • Sep 12, 2019
8170_rns_2019-09-12_80740aa0-78c8-4039-aae7-183f0a30446c.pdf
Investor Presentation
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Pareto Securities' Oil & Offshore Conference
Ben Boiling, CFO Oslo, 12 September 2019
Cautionary statement
- This presentation of ADS Crude Carriers Plc ("ADS Crude Carriers" or the "Company") contains forward looking information based on the intent, opinion, belief or current expectations of the Company and are based on management's assumptions and estimates
- Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors
- Actual results, performance and outcomes may be materially different
- This presentation does not contain all information concerning the Company and should be read in conjunction with other financial statements published by the Company
ADS – a brief history
A new shipping company; already paying dividends
Strong key partners & investors
Established and experienced managers
Managers
Commercial vessel manager
• World leading owner and operator of crude tankers with 35 years history
Technical vessel manager
• Global ship manager with more than 30 years experience, >12,000 employees, 500 vessels under management and 30 offices worldwide
Corporate manager of ADS
• Norwegian shipping company founded in 1857, managing shipping & offshore investments on behalf of its shareholders and third parties
Shareholders
Largest shareholders
- Ship Finance Int. Ltd 17.2%
- One of the world's largest ship-owning companies
- Arendals Dampskibsselskab 10.4%¹
4
Lenders
• ADS vessel loan facility is provided by a company affiliated with John Fredriksen group of companies
Financial performance to date
Thousands
Delivering dividends ahead of schedule
Cash from operations excl. WC movements
5
Balance sheet key numbers
Healthy balance sheet
| As at end | ||||
|---|---|---|---|---|
| (In millions of USD) | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018 |
| Total assets | 99.1 | 89.9 | 92.2 | 84.4 |
| Vessels book value | 68.4 | 66.4 | 67.7 | 67.3 |
| Shareholders' equity | 57.4 | 57.8 | 56.0 | 53.8 |
| Total cash | 18.4 | 16.5 | 14.2 | 11.9 |
| Net current assets | 25.4 | 21.1 | 18.0 | 16.2 |
| Gross interest-bearing debt | 37.5 | 30.0 | 30.0 | 30.0 |
| Net interest bearing debt | 19.1 | 13.5 | 15.8 | 18.1 |
• Vessel loan amendment in Q2 2019 increased gross debt by USD 7.5m to fund intermediate surveys
- As at 30 June 2019, remaining estimated cash cost of intermediate surveys and scrubbers investments is USD 15m
- Payments to yard spread over Q3 2019 through Q1 2020
Entry at bottom of the cycle
2002-built VLCC prices recently at USD 5m (22%) premium to ADS vessel price
Vintage aged VLCC S&P LTM
- ADS vessel price of USD 22.5m in July 2018
- All transactions for 2002-built VLCCs since then have been at higher prices
- USD 1.5m to 8.5m premium compared to ADS vessel price
- Deals over past two months indicate current market price ~USD 27.5m
Vessel investments
Intermediate surveys and scrubber CAPEX fully financed
Intermediate survey & scrubber cost estimate
• Dockings to be completed Q3 and Q4 2019
- USD 1.5m per vessel paid as at 30 June
- Remaining CAPEX payments will be spread from Q3-19 through Q1-20
¹ = Intermediate survey cost and scrubber investment cost are estimates based on certain assumptions, including the result of the docking of ADS Serenade. Actual average cost per vessel may differ significantly from estimate
Debt profile & residual vessel value
USD per vessel
Vessel recycle value significantly higher than outstanding debt
- USD 1m annual loan amortization 2020 & 2021 (per vessel)
- Estimated recycle value of vessel USD 6m higher than balloon repayment
Risk
• Potential downward pressure on recycle values depending on development of recycling facilities and pricing
Debt amortization Vessel recycle value¹ 12.5m 1.0m 1.0m 10.5m 16.5m
Loan profile vs vessel recycle value
Dividends
Dividend payouts commenced ahead of schedule
Dividend policy
All surplus cash will be returned to shareholders by way of quarterly dividend payments
USD per share
Cash break even
Low cash break even provides significant potential upside to cash generation
ADS breakeven
* ADS breakeven is estimated for 2020 and 2021
* Variable amortization payable from Q1-20 under Cash Sweep mechanism
ADS break even vs. market
ADS Crude Carriers cash break even significantly lower than historical market rate
Historical VLCC rates vs ADS breakeven
- ADS breakeven USD 15k
- VLCC market historical average rates ~USD 30k
- Positive market sentiment for 2020 and 2021
| Forecast TCE for VLCCs (USD per day) | 2020 | 2021 |
|---|---|---|
| Arctic Securities | 50,000 | 40,000 |
| Clarksons Platou |
47,000 | 35,000 |
| Cleaves Securities | 46,000 | 54,000 |
| Fearnley Securities |
60,000 | 45,000 |
| Pareto Securities | 55,000 | 40,000 |
| Average | ~50,000 | ~40,000 |
¹ = Source: Clarksons Platou
² = ADS breakeven is estimated for 2020 and 2021.
Summary On track for 2020
| Strategy | VLCCs acquired at bottom of the cycle • Partnered with leading and well established managers • Moderate debt and amortization • |
|---|---|
| Well Positioned | Scrubber investments on track • Low cash break even • Postive tanker market sentiment • |
| Shareholder value | Clear dividend policy • Fleet growth only if accretive for existing shareholders • |
Cyprus
ADS Crude Carriers Plc, OSM House, 22 Amathountos 4532 Agios Tychonas Limassol, Cyprus
,
Tel +357 25335501
:
Norway :
ADS Crude Holding AS, PO Box 198, 4802 Arendal, Norway
Tel: +47 41 49 40 00
Email: [email protected]
Visiting Address Norway: Sandvigveien 19, 4816 Kolbjørnsvik , Norway