q1-20 earnings presentation · q1-20 earnings presentation may 6, 2020. this release contains...
TRANSCRIPT
Q1-20 Earnings Presentation
May 6, 2020
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934,
as amended) which reflect management’s current views with respect to certain future events and performance,
including, among others, the timing of the commencement of charter contracts. The following factors are among those
that could cause actual results to differ materially from the forward-looking statements, which involve risks and
uncertainties, and that should be considered in evaluating any such statement: delays in the commencement of charter
contracts; unanticipated market volatility (such as volatility resulting from the recent COVID-19 outbreak); and other
factors discussed in the Partnership’s filings from time to time with the SEC, including its Report on Form 20-F for the
fiscal year ended December 31, 2019. The Partnership expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the
Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any
such statement is based.
Forward Looking Statement
4%
48%
48%
FSO Shuttle Tanker FPSO
$4.6bn(1)
Forward Revenue
(1) As of March 31, 2020. Based on existing contracts; but excluding extension options and oil-tariff revenue.
~2,000Employees
55
Vessels
Blue-Chip Customers
Altera Infrastructure
Recent Highlights
Q1-20 Results
Adjusted EBITDA of
$154 million in Q1-20,
decreased by $13 million
from Q4-19
E-Shuttle Newbuildings
Aurora Spirit delivered in
January 2020 and
commenced operations
in the North Sea in April
2020
Rainbow Spirit delivered
in February 2020 and is
expected to commence
operations in the North
Sea in May 2020
Knarr Contract Extension
In March 2020, a one-year contract amendment was signed to extend the lease and operation of the Knarr FPSO until minimum March 2022
Privatization Process
In January 2020, Brookfield completed its acquisition by merger of the outstanding publicly held and listed common units of Altera Infrastructure
• No material business interruptions or financial impact in Q1 2020 from the COVID-19 pandemic
• We continue to focus on the safety of operations and have introduced a number of proactive
measures to protect the health and safety of vessel crews, as well as for onshore employees
• A majority of our revenues are secured under medium-term contracts that should not be materially
affected by a short-term volatility in oil prices
• We continue to closely monitor counterparty risk associated with our vessels under contract and
work to mitigate any potential impact on the business
COVID-19
Q1-20 Results
Adjusted EBITDA of $154 million in Q1-20,decreased by $13 million from Q4-19
FPSO SegmentAdjusted EBITDA decreased by $6 million to $76 million inQ1-20 mainly due to the recognition of the Libra FPSOannual maintenance bonus in Q4-19
Shuttle Tanker SegmentAdjusted EBITDA decreased by $3 million to $62 million inQ1-20 mainly due to costs related to the mobilization of thetwo E-shuttle newbuildings that were delivered in Q1-20
FSO SegmentAdjusted EBITDA increased by $2 million to $24 millionin Q1-20 mainly due to timing of repairs and maintenance
Towage SegmentAdjusted EBITDA decreased by $5 million to $-4 million inQ1-20 mainly due to lower fleet utilization
FPSO Segment
Knarr Contract Extension
Economic Uptime Adjusted EBITDA (US$ millions)
Foinaven Operation Contract
In March 2020, a one-year contractextension was signed with Shell and theKnarr license partners to extend the leaseand operation of the Knarr FPSO untilminimum March 2022
The terms include a reduction of the firmday rate from March 2021 in exchange fortariff incentive revenues based on oilproduction revenue and oil price, as well asthe elimination of the contract terminationfee and the purchase option for the FPSO
The Voyageur Spirit FPSO contract withPremier Oil at the Huntington UK fieldended in April 2020 and the FPSO is in theprocess of being decommissioned
The FPSO is expected to be redeliveredand subsequently laid up from June 2020,while marketed for re-deployment
83
92
109
94
72 73
82 76
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
99% 99% 99% 99% 99% 99% 99% 99%
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
Voyageur Decommissioning
In March 2020, seven-year operation andduty holder agreements were signed withBP to continue to provide operationalservices for the Foinaven FPSO
Shuttle Tanker Segment
E-Shuttle NewbuildingsContracts Update
Technical Uptime Adjusted EBITDA (US$ millions)
In April, an 18-month extension was signedwith Transpetro, a subsidiary of Petrobras,to extend the Navion Stavanger bare boatcontract until October 2021
In April, a four-month time-charter contractwas signed with Suncor for Navion Anglia,which commenced in May 2020
Aurora Spirit delivered in January 2020and commenced operation in April 2020
Rainbow Spirit delivered in February 2020and is expected to commence operationsin May 2020
The remaining four E-Shuttle newbuildingsare expected to be delivered between July2020 and January 2021
Capex
Total capex for the six E-Shuttles and thefourth East Coast Canada shuttle tankeris approximately $920 million, excludingcapitalized interest, of which $728 millionis funded with secured financing
Remaining capex per end March 2020 isapproximately $468 million, of which $422million will be drawn on committed,secured financing
* Q4-18 figures excludes impact of Petrobras settlement
99% 99%96%
99% 100% 100% 99% 98%
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
56
65 69 67 68
65 65 62
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
FSO Segment
Q1-20 Operations
Technical Uptime Adjusted EBITDA (US$ millions)
100% uptime with operations across thefive-vessel fleet consistent with previousquarter
98% 97% 98% 99% 98% 99% 100% 100%
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
23 21
26
23 23 24
22 24
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
Towage Segment
Q1-20 Operations
Fleet utilization decreased to 34% inQ1-20 compared to 69% in Q4-19 fromslower market activity reflecting theglobal impact of COVID-19
Utilization Adjusted EBITDA (US$ millions)
Contracts Update
In January 2020, a contract to tow anFLNG to the Coral South LNG project inMozambique was signed. This will requireup to five vessels, and is expected totake place in the fourth quarter of 2021
Note: Excluding FPSO JV debt. Revolving credit facilities shown as fully drawn.
End Q1 2020 Debt Maturity ScheduleIncluding both scheduled amortizations and balloon payments
$435
$334
$578
$1,137
$476
$138
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Remaining 2020 2021 2022 2023 2024 2025
MIL
LIO
NS
Brookfield RCF Unsecured debt Shuttle FPSO FSO Towage Accomodation
• Maintain safety standards and operational excellence
• Proactively approach the new business environment
• Progressing strategic plans to enhance the liquidity of the business
• Tighten and reduce discretionary spending
• Optimize the offshore and onshore organizations and cost structure
• Limit capital expenditures to the committed shuttle tanker newbuilding program and mandatory vessel dry-dockings
• Focus on completion of refinancing initiatives in progress
• Capture opportunities from a strong oil tanker and oil storage market
• Secure FPSO charter extensions and redeployments
2020 Priorities
Appendix
End Q1 2020 Shuttle Charter Summary
Vessel 2020 2021 2022 2023 2024
Peary Spirit
Samba Spirit
Lambada Spirit
Bossa Nova Spirit
Sertanejo Spirit
Beothuk Spirit
Norse Spirit
Dorset Spirit
Altera Thule
Nansen Spirit
Petroatlantic
Petronordic
Aurora Spirit
Rainbow Spirit
Navion Oceania
Time-charter
CoA
Bareboat
Spot
Vessel 2020 2021 2022 2023 2024
Tide Spirit
Current Spirit
Wind Spirit
Wave Spirit
Amundsen Spirit
Scott Spirit
Stena Natalita (50% JV)
Heather Knutsen (in-charter)
Ingrid Knutsen (in-charter)
Navion Oslo
Navion Anglia
Navion Gothenburg (50% JV)
Nordic Rio (50% JV)
Nordic Brasilia
Navion Stavanger
Navion Bergen
Please also refer to Form 20-F for the fiscal year ended December 31, 2019.
End Q1 2020 FPSO Charter Summary
Unit Location 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Libra Brazil Petrobras
Itajai Brazil Petrobras
Knarr Norway Shell
Petrojarl I Brazil Enauta
Piranema Brazil Petrobras
Voyageur UK Premier Oil
Varg Norway
OptionsFirm Available
Unit Location 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Please also refer to Form 20-F for the fiscal year ended December 31, 2019.
End Q1 2020 FSO Charter Summary
(1) As of March 31, 2020OptionsFirm Available
UnitLocation
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Randgrid Norway Equinor
Suksan Salamander
Thailand Teekay Corp.
Dampier Spirit
Australia Jadestone
Falcon Spirit Qatar Qatar Petroleum
Apollo Spirit UK Teekay Corp.
Unit Location 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Please also refer to Form 20-F for the fiscal year ended December 31, 2019.