miclyn express offshore fy2013 results presentation
TRANSCRIPT
Miclyn Express OffshoreFY13 Results Presentation – 26 August, 2013
Live Webcast DetailsPresenter: Diederik de Boer, CEO
Date: 26 August, 2013
Time: 11:00am AEST
Access: http://www.brrmedia.com/event/114725
www.miclynexpressoffshore.comMICLYN EXPRESS OFFSHORE
FY13US$m
Normalised1 FY13US$m
FY12US$m Variance
Revenue 245.3 245.3 269.0 9%
Operating EBITDA 83.1 87.6 96.9 10%
EBITDA 84.7 89.2 97.4 9%
NPAT 46.5 53.8 65.5 18%
EPS (cents) 16.6 19.3 23.7 19%
Financial Year 2013 Results
1
Operating EBITDA declined by 9% after reporting 34% growth in FY12
Core OSV and Crew/Utility Vessel segments grew, albeit below expectations
Tug and Barge fleet performed well, however margins contracted versus record FY12 performance post DB Schenker project
Supplementary segments, Shipyard and Third Party Vessels, contracted substantially with roll off of DB Schenker project
Express Offshore Solutions had another strong year with higher revenue and improving margins
Withdrawal from Iran, one off provision of $4.5m impacting FY13 earnings
Refinancing of core facility at attractive terms resulting in US$2.8m write off of unamortised upfront fees
Continued operational excellence, MEO is a provider of choice
1. Excluding the impact of the $4.5m one-off Iran provision and $2.8m write off of the unamortised upfront fees associated with the refinancing of core facility
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FY13 FY12 Variance
Revenue (US$m) 74.9 70.2 7%
Gross Profit (US$m) 45.9 43.8 5%
Gross Margin (%) 61.2 62.5
Utilisation improved to 84% in FY13 despite a weak 3rd Quarter (73% utilisation) due to
a number of high end OSV’s undergoing dockings and prep work for new contracts
Endurance, Endeavor, Galaxy, Constructor II, Magellans and Sovereigns all experienced downtime
FY14 looking positive with a number of long term contracts secured, full year contribution from 4 vessel additions in FY13
Fleet expansion continues
2 x 2,000 DWT PSV’s in Batam Shipyard to be delivered in 1HFY14; one has secured a contract
Uniwise Offshore (Thailand JV) has two AHTS on order with Chinese Shipyard, delivery mid FY15
MEO has taken up purchase option for two additional AHTS with the same Shipyard, delivery late FY15
Segment Highlights
Segment PerformanceOffshore Support Vessels (OSVs)
2
9182 84
64.3
70.2
74.9
50.0
55.0
60.0
65.0
70.0
75.0
80.0
0
10
20
30
40
50
60
70
80
90
100
FY11 FY12 FY13
Revenue (U
S$m
)
Util
isat
ion
(%)
Utilisation Revenue
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Segment Highlights
Segment PerformanceCrew/Utility Vessels
3
91 92 93
49.1
54.7
56.5
44.0
46.0
48.0
50.0
52.0
54.0
56.0
58.0
0
10
20
30
40
50
60
70
80
90
100
FY11 FY12 FY13
Revenue (U
S$m
)
Util
isat
ion
(%)
Utilisation Revenue
FY13 FY12 Variance
Revenue (US$m) 56.5 54.7 3%
Gross Profit (US$m) 32.9 32.7 1%
Gross Margin (%) 58.2 59.8
93% utilisation in FY13
Stable, dominant market leader in this segment
5 new vessels delivered in 2HFY13, with 2 more being delivered in early FY14
Frame agreement with Singaporean Shipyard to deliver 6 additional vessels between Dec-13 and Dec-14, with an option to acquire 4 more in CY 2015
8 older vessels sold during FY13; renewal activity to continue
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76% utilisation in FY13
Margin contraction due to lower activity in Australia post DB Schenker contract completion
EOS projects are keeping a portion of the fleet busy
Subsea 7 (Gorgon) and Heerema (Ichthys) contracts will utilise a number of Barges in FY14 and FY15
Tarka was purchased in 2HFY13
330 x 120 foot Barge purchased in early FY14
2 x 400ft Ballastable Barges to be delivered in 1HFY14 from our internal Shipyard
Segment Highlights
Segment PerformanceTugs and Barges
4
FY13 FY12 Variance
Revenue (US$m) 46.9 42.3 11%
Gross Profit (US$m) 24.7 27.5 10%
Gross Margin (%) 52.6 64.9
53
77 76
20.7
42.346.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
0
10
20
30
40
50
60
70
80
90
100
FY11 FY12 FY13
Revenue (U
S$m
)
Util
isat
ion
(%)
Utilisation Revenue
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Legacy assets from Samson acquisition
Small, non core segment
Utilisation improved to 55% in 2H FY13
One vessel being used internally for logistics support
One more vessel divested in early 2H FY13, four remaining
Plan to exit this segment over time
Segment Highlights
Segment PerformanceCoastal Survey Vessels
5
68
4740
5.0
5.7
5.5
4.6
4.8
5.0
5.2
5.4
5.6
5.8
0
10
20
30
40
50
60
70
80
90
100
FY11 FY12 FY13
Revenue (U
S$m
)
Util
isat
ion
(%)
Utilisation Revenue
FY13 FY12 Variance
Revenue (US$m) 5.5 5.7 3%
Gross Profit (US$m) 0.8 1.8 56%
Gross Margin (%) 14.0 32.0
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Vessels chartered in from Third Parties to supplement MEO’s core fleet
Non-core, opportunistic earnings stream
Significant decline in earnings in this segment as anticipated due to large spread of vessels chartered in for DB Schenker project in FY12
Project contingency released in FY13 improving margin
Segment Highlights
Segment PerformanceThird Party Vessels
6
FY13 FY12 Variance
Revenue (US$m) 26.0 53.1 51%
Gross Profit (US$m) 6.9 9.9 30%
Gross Margin (%) 26.8 18.7
15.1
53.1
26.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
FY11 FY12 FY13
Rev
enue
(US
$m)
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Third party revenue down as a result of DB Schenker project completion
Continued efforts to build prospects for third party earnings (fabrication, repair, newbuilding)
Margin enhancement due to efficiency improvements and release of project contingencies
Newbuilding activity continues
2 x 2,000 DWT Platform Supply Vessels (“PSVs”) expected delivery in mid CY14
2 x 400ft Ballastable Barges expected delivery in 1H FY14
Segment Highlights
Segment PerformanceShipyard
7
FY13 FY12 Variance
Revenue (US$m) 8.5 16.6 49%
Gross Profit (US$m) 3.1 4.2 26%
Gross Margin (%) 36.8 25.4
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Project and pipe transportation business continues to gain momentum
Low capital intensity
Margin enhancement track record is established
Further expansion of client base, with a number of new pipe delivery and structure transport contracts won in SE Asia and Middle East
Bidding on a number of new major Australian opportunities
Expanding pipeline prospects in this niche segment
Utilisation upside for MEO’s Tug and Barge fleet
Segment Highlights
Segment PerformanceExpress Offshore Solutions
8
FY13 FY12 Variance
Revenue (US$m) 36.7 30.1 22%
Gross Profit (US$m) 5.4 3.2 69%
Gross Margin (%) 14.8 10.6
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41%
34%
23%
2%FY13 Revenue
Asia
Australia
Middle East
Other Inter-regional
Regional Update and Outlook
Dip in activity levels in Australia in FY13, however new opportunities are shaping up for the new year
Long term OSV contract won in May-13 for Sovereign I
Large Barge contract awarded by Heerema for Icthys project
Large AHT & Barge contract awarded by Subsea 7 for Gorgon project
Middle East continues to deliver high utilisation levels
Exposure to Qatar grew in FY13
Local setup created in Abu Dhabi
Continued focus on developing Saudi and UAE businesses
South-East Asia remains our core market
Thailand operations continued to expand in FY13; increased from 6 OSV’s in FY12 to 8 OSV’s in FY13
More vessels deployed into Indonesia and Malaysia
Regional Update
FY14 Outlook
Positive outlook for the group, return to earnings growth expected in FY14
No adjustment to earnings guidance issued on 23 April 2013
9
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Clear Fleet Strategy
11
Maximise Utilisation
Expand OSV Fleet
Renew Crew/Utility Vessel Fleet
Value Added Deployment of Transport
Assets
Support Infrastructure
Customer Focus
Operational Excellence
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17.9
80.67.7
28.1
88.214.0
8.4 6.6 0.0 17.10.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
US
$m
Finance Update
12
Strong cash generation off a lower earnings base
Growth CAPEX program largely funded by operating cashflows
Non collection of Iran receivable due to exit from the region impacted operating cashflow in FY13
Fleet renewal activity continues with proceeds reinvested into more relevant assets
Core facility refinanced, significantly pushing back amortisation of the facility
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Core facility refinanced on attractive terms
US$160 Term Loan + US$140m RCF
Margin of 2.45% + LIBOR
RCF drawn to US$56m as at 30 June 2013
Finance Update (cont.)
14
Strong balance sheet, conservative gearing Dividend on hold
Dividend is currently on hold
Company prefers to preserve cash for future growth opportunities
FY13 FY12
Net Debt 219.5 179.2
Net Debt / EBITDA 2.51 1.8
Gearing (%)2 36.4% 33.9%
1. Excluding the one off US$4.6m Iran provision2. Net Debt / (Net Debt + Equity)
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Solid execution capability
Financial capacity to fund growth
Well positioned in a healthy industry
Attractive pipeline of opportunities
Proven operational excellence
Strong balance sheet
Summary
13
Clear strategy for future growth
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Appendix 1Statement of Financial Performance
US$m FY13 FY12 Variance %Revenue 245.3 269.0 (9%)Operating Costs (125.7) (145.8) 14% Gross Profit 119.7 123.2 (3%)GP Margin 48.8% 45.8%
Other Income 2.0 3.5 (43%) Overheads (32.6) (29.3) (11%) Iran Provision (4.5) - NMForex (1.4) (0.5) (180%) Operating Earnings 83.1 96.9 14%
Gain on disposal of vessels 1.5 0.8 88% EBITDA 84.7 97.7 (13%) EBITDA Margin 34.5% 36.2%
Depreciation & Amortisation (24.6) (20.6) (19%)EBIT 60.0 77.1 (22%)
Net Finance Costs (9.6) (6.9) (39%)Income Tax Expense (2.9) (4.3) (33%)Income Tax Expense Rate 5.8% 6.1%PAT 47.5 65.9 (28%)
Minority Interest (1.0) (0.4) (150%) NPAT 46.5 65.5 (29%) NPAT Margin 18.9% 24.3%
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Appendix 2Segments
FY13 Revenue
FY13Gross Profit
OSVs 74.9 45.9
Crew/Utility Vessels 56.5 32.9
Tugs and Barges 46.9 24.7
Coastal Survey Vessels 5.5 0.8
Third Party Vessels 26.0 6.9
Shipyard 8.5 3.1
EOS 36.7 5.4
EOS Elimination1 (9.7) -
Total 245.3 119.7
17
1. Elimination for intercompany charter of vessels from MEO to EOS
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Appendix 3Statement of Financial Position
(US$’000) As at 30 Jun 2013 As at 30 Jun 2012Current assetsCash and cash equivalents 17.1 17.9Trade receivables 75.0 67.9Other receivables and prepayments 11.4 15.3Inventories 6.0 6.1Vessels held for sale 1.8 -Total current assets 111.2 107.1Non-current assetsProperty, plant and equipment 499.0 431.6Other assets 3.0 1.6Goodwill 59.2 62.6Intangible assets 0.5 0.7Total non-current assets 561.8 496.5 TOTAL ASSETS 673.0 603.6Current liabilitiesTrade and other payables 50.1 49.4Current tax payable 1.7 6.1Loans and borrowings 23.1 23.9Other liabilities 0.3 0.4 Total current liabilities 75.2 79.8Non-current liabilitiesLoans and borrowings 213.5 173.2 Other non-current liabilities 0.9 1.3 Total non-current liabilities 214.4 174.5TOTAL LIABILITIES 289.6 254.3NET ASSETS 383.4 349.4Shareholders equityShare capital 190.4 184.0 Other equity reserves (42.7) (43.4)Translation reserve (4.1) 1.5Retained earnings 238.3 206.8Minority interests 1.5 0.5 TOTAL EQUITY 383.4 349.4
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Appendix 4Cash Flow Statement
US$m FY13 FY12
EBIT 60.0 77.1
Depreciation and amortisation 24.6 20.6
EBITDA 84.7 97.7
Vessel disposal gains (1.5) (0.8)
Non-cash and other items 5.7 (0.6)
Working capital movement (8.1) (7.0)
Cash flows available from operations 80.8 89.3
Proceeds from sale of property, plant and equipment (including vessels) 7.7 1.8
Capital expenditure - growth (88.2) (90.7)
Capital expenditure - maintainance (14.0) (9.9)
Other investing activities (0.2) (16.3)
Cash flows before financing and tax (13.9) (25.8)
Financing (19.7) (25.0)
Debt repayment (287.4) (44.3)
Debt drawdown 327.0 92.6
Tax (6.6) (4.1)
Cash flows after financing and tax (0.7) (6.7)
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Appendix 5Fleet Composition as at 30 June 20131
20
124 vessels + 17 under
construction / to be delivered
Vessels under construction / to be delivered
1. Excludes Third Party Vessels
25
63
114
6
8
21
3
0
10
20
30
40
50
60
70
80
OSV Crew/Utility Vessels
Tugs and Barges
Coastal Survey Vessels
Num
ber o
f ves
sels
BargesTugs
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Reliance on Third Party InformationThe views expressed here contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by Miclyn Express Offshore Limited (“Miclyn Express Offshore”).
Forward Looking StatementsSome of the information contained in this document may constitute forward-looking statements that are subject to various risks and uncertainties. Nothing in this document is a promise or representation as to the future. Statements or assumptions in this document as to future matters may prove to be incorrect. Miclyn Express Offshore does not make any representation or warranty as to the accuracy of such statements or assumptions. You acknowledge that circumstances may change and the contents of this document may become outdated as a result. You also acknowledge that no audit or review has been undertaken by an independent third party of the assumptions, data, results, calculations and forecasts contained in or referred to in this document. You should make your own independent assessment of the information.
No WarrantiesWe makes no warranty, express or implied, nor assumes any responsibility in its contents for its accuracy, completeness, its use for any general of particular purpose, nor that such items or use of such items would not violate or infringe rights of others.
No Offer of SecuritiesNothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell Miclyn Express Offshore securities in any jurisdiction.
Pro-Forma Financial InformationReferences to pro forma financials exclude any exceptional items. A reconciliation to statutory financials is contained within the prospectus, available at our website www.miclynexpressoffshore.com.
Important notice and disclaimer
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