Presentation of Q4 2017 results 22 February 2018 - Solstad ...
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Presentation of Q4 2017 results 22 February 2018
Quarter highlights
• Drop in revenues and EBITDA largely REVENUES PER QUARTER – NOKm
driven by seasonal lower activity
1 444 1 516
• Realization of merger synergies – cost-out 1 158 1 167
target increased
• Continuous focus on cutting costs, and
increase efficiency
• Operating costs expected to come down
further in 2018 Q1 Q2 Q3 Q4
• Solid order intake during quarters – new
awards of MNOK ~700 ADJ. EBITDA PER QUARTER – NOKm
384
• Improved outlook, signs of increased
activity across all vessel segments 210
• Activity in both UK and NCS 135
North Sea on the rise 92
• Project to spin-off non-core fleet initiated Q1 Q2 Q3 Q4
• No transaction concluded so far
2
Q4 2017 in numbers – Income statement
• Total operating income as presented in the income statement is net of
• Excess values from freight contracts (ref. note 3 in 4Q Financial report)
• income from Joint Ventures.
3
Q4 2017 in numbers – Balance sheet
4
Q4 2017 in numbers – Cash flow
CASH FLOW Q3’17-Q4’17
COMMENTS
NOKm
• Company’s overall cash
position of reduced over the
Cash, end Q3’17 2 114
quarter by MNOK 238 to
MNOK 1,875 from MNOK
2,114
CF Ops. 276
• Net cash flow from
CF Inv. 54 operations positive MNOK
276
Installments/new debt 165
• Net cash flow from
investments negative MNOK
54
Net interest payments 349
• Net interest paid MNOK
Changes in FX rates 53 349, and net installments
paid were MNOK 164
Cash, end Q4’18 1 875
5Net interest bearing debt
NET INTEREST BEARING DEBT
NOK bln. COMMENTS
• Net MNOK 165 installments paid during 4Q 2017
• Cash reduced by MNOK 238
Q2’17 28.4 • Negative currency effect of MNOK 482
• NIBD increased from NOK bln 26.9 to 27.3
• Total interest bearing debt of NOK bln 31.2 for the
Q3’17 26.9 Group
• NOK bln 13.2 held by Solstad Farstad ASA
• NOK bln 18.0 held by non-recourse subsidiaries
Q4’17 27.3
6Merger synergies – target increased to
NOKm 700-800 end of 2018
• Detailed synergy assessment run in parallel with integration process
• Revised top down view of potential of NOKm 700-800
• Plan for synergy realization currently being implemented
POTENTIAL SPLIT IN THREE BROAD NEW COST RUN-RATE TARGETED FROM
AREAS 4Q 2018
SYNERGY SPLIT SAVINGS POTENTIAL OVER TIME
Allocation by category; run rate Run rate
Target annualized
run rate NOKm
~700-800
Realized by
Q4’17
Admin. Yet to be realized
Crew Realized by Q4’17
Vessel OPEX
Run-rate cost synergies
NOTE: Based on execution date, timing of P&L effect not considered; Based on current activity level
7Merger synergies case study: Reduced vessel OPEX
CONTEXT EXAMPLES OF VESSEL OPEX REDUCTIONS
• Vessel OPEX reduced
REFERENCE -28%
over time, largely driven
by new crew composition CASE #1:
and negotiations with key 2007 built
PSV operating 100
suppliers 72
UKCS, &
• Focus on continuous International
improvements, and 2016 2018
re-thinking traditional
ways to operate
-14%
REFERENCE
CASE #2:
2008 built 100 86
PSV operating
Australia
2016 2018
8Solid backlog situation
BACKLOG
COMMENTS
NOK bln.
Aquaculture AHTS & PSV International • Total contract backlog of
Subsea AHTS & PSV Strategic regions NOKbln. ~9.3 as per February
2018 (incl 50% of JV backlog)
3 213 • NOKbln. ~3.2 in firm contract
42 backlog Feb to Dec 2018
• Aquaculture has total backlog
of NOKbln 1.4 (of which 50%
1 646 2 178 included in SolstadFarstad
82 backlog)
1 283
243 1 357
117 1 016
117
74 865
1 282
741
602
299 158
2018 2019 2020 2021
9Q4’17 contract awards in excess of MNOK 700,
positive outlook for Spring/Summer 2018
SELECTED CONTRACT AWARDS DURING Q4’18 KEY OBSERVATIONS
• Early signs of
recovery in selected
regions
• Increased number of
tenders, with
improved terms and
Normand Commander 5+3 attractive contract
Sea Brasil 2 years firm
contract with Statoil years firm option with lengths
Brasil Bahia Grande in Argentina • Subsea construction
late cyclical, however
recent awards in
adjacent oil service
sectors indicate uptick
in activity
FAR Seeker 1 year + 14 FAR Swift with 1 year
months with Woodside contract extension with
Energy in Australia Petrobras in Brazil
10Segment in details
AHTS PSV CSV Wellboats Harvest vessels
SUBSEA
AHTS & PSV AHTS & PSV
CONSTRUCTION & DESS AQUACULTURE
STRATEGIC REGIONS INTERNATIONAL
RENEWABLE ENERGY
TOTAL # 34 17 1 0
VESSELS 32 31 32 0
FLEET STATUS
IN 25 2 1 0
OPERATION 21 18 20 0
9 15 0 0
IN LAY-UP 11 13 12 0
0 0 0 4
NEWBUILDS 0 0 0 1
SEGMENT • Norway: Expect • UK - expect increased • SURF: Probably • Actively bidding on
OUTLOOK increased activity in demand in 2018, another year until we new opportunities in a
2018, based on more particularly for PSV's. see a meaningful growing market
rigs drilling, especially • SE - Asia / Africa / activity increase.
in summer season Med - slightly • IMR: Might pick up
• Brazil: Steady activity. increased activity, but already this year due
Further growth massive oversupply of to combination of
expected. High vessels. accumulated
barriers of entry to maintenance and
this market improved cashflow for
• Australia: Steady oil companies
activity. High barriers • Offshore wind: Steady,
of entry to this market high activity expected
11Thank you!
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