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Q2 2014 EARNINGS CALL – Polarcus

Polarcus · Aug 8, 2014 · 37 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q2 2014 EARNINGS CALL – Polarcus – slide 1
    Polarcus Limited Second Quarter 2014 08 August, 2014 Rolf Ronningen, CEO Tom Henrik Sundby, CFO 1
  2. Q2 2014 EARNINGS CALL – Polarcus – slide 2
    Agenda 1 Highlights 2 Financials 3 Operations & Market update 4 Summary & Q&A 5 Appendices 3
  3. Q2 2014 EARNINGS CALL – Polarcus – slide 3
    Polarcus today Polarcus Limited Ticker Oslo stock exchange PLCS Fleet of 7 high-end 3D seismic vessels 6 vessels operating globally in Contract and Multi-Client markets Shares issued, million 507.2 1 vessel on 5 year bareboat…
  4. Q2 2014 EARNINGS CALL – Polarcus – slide 4
    Polarcus in brief Youngest and most uniform fleet in the industry Specialized Arctic capabilities and procedures Broadband offering - RIGHTBAND Pioneering environmental ethos Highly efficient operations from Pole- to-Pole…
  5. Q2 2014 EARNINGS CALL – Polarcus – slide 5
    Key developments Q2 14 Market Increased Contract vs. Multi-Client acquired Confirmation of fleet capacity reductions Competitive, with flat YoY tendering levels Polarcus Revenue up 13% sequentially and 5% YoY Net profit up 46%…
  6. Q2 2014 EARNINGS CALL – Polarcus – slide 6
    Agenda 1 Highlights 2 Financials 3 Operations & Market update 4 Summary & Q&A 5 Appendices 7
  7. Q2 2014 EARNINGS CALL – Polarcus – slide 7
    Key financials Quarter ended Six months ended Year ended (In millions of USD) 30-Jun-14 30-Jun-13 30-Jun-14 30-Jun-13 31-Dec-13 Revenues 137.6 130.5 259.0 275.3 532.2 Cost of sales (80.5) (72.7) (155.1) (157.5) (293.1) EBITDA 49.9 51.1…
  8. Q2 2014 EARNINGS CALL – Polarcus – slide 8
    Key financials improved margins QoQ Revenues EBITDA Margin 200 70 50% 60 51 137.6 50 40% 150 130.5 50 114.3 43 40 30% 100 30 20% 50 20 10% 10 - - 0% Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q2-12 Q3-12 Q4-12 Q1-13…
  9. Q2 2014 EARNINGS CALL – Polarcus – slide 9
    Highest contract utilization since 2012 100% 1% 2% 2% 1% 1% 2% 4% 6% 4% 7% 5% 5% 3% 7% 13% 14% 90% 6% 19% 11% 14% 12% Polarcus Naila upgrade 8% 19% 80% 13% 13% 10% 6% 10% 16% 4% 70% 60% 50% 86% 40% 81% 75% Continued high…
  10. Q2 2014 EARNINGS CALL – Polarcus – slide 10
    Q2 14 - Improved profitability Driven by operational efficiency and reduced finance cost 7.1 -8.3 6.4 9.2 -1.7 6.3 -0.6 Net profit Q2-13 Revenue Operating Depreciation & Net FX Net Interest Net profit Q2-14…
  11. Q2 2014 EARNINGS CALL – Polarcus – slide 11
    H1 14 Reduced profitability Due to soft market conditions and yard stay offset by reduced costs 16.1 -16.2 14.9 10.2 1.8 -2.7 -3.9 Net profit H1-13 Revenue Operating Depreciation & Net FX Net Interest Net profit…
  12. Q2 2014 EARNINGS CALL – Polarcus – slide 12
    Positive cash flow generation H1 14 Operating +101m Investing -45m Financing -43m 11 18 12 15 80 18 25 10 93 81 Change in gross cash USD + 11m Opening Profit Cash WC Naila upgrade CAPEX Multi-Client Loan Interests…
  13. Q2 2014 EARNINGS CALL – Polarcus – slide 13
    Improved financial flexibility Debt maturity profile Q2 2014 Extended maturity and reduced cost Bank debt Sale leaseback USD 125m CB New NOK 350m bond issued and swapped USD 95m bond NOK 350m bond to USD floating interest (currently…
  14. Q2 2014 EARNINGS CALL – Polarcus – slide 14
    Covenant amendments Rolling twelve month debt service MUSD Reset of Q2 14 debt 108 108 104 98 91 89 87 85 service ratio (DSR) to 2.1x of bank facility 43 44 42 40 37 37 37 37 Actual DSR in Q2 2.21x 65 64 62 59 55 53 50 48…
  15. Q2 2014 EARNINGS CALL – Polarcus – slide 15
    The Polarcus share Top 20 Shareholders (as per end July) Shareholder Share % OEP POLARCUS HOLDING 85,666,033 16.89 Listed on the Oslo Stock ZICKERMAN HOLDING LTD SKANDINAVISKA ENSKIL 40,571,476 39,153,013 8.00 7.72 Exchange…
  16. Q2 2014 EARNINGS CALL – Polarcus – slide 16
    Agenda 1 Highlights 2 Financials 3 Operations & Market update 4 Summary & Q&A 5 Appendices 17
  17. Q2 2014 EARNINGS CALL – Polarcus – slide 17
    Industry leading assets Uniform high-end 3D fleet with specialized Arctic capabilities RIGHTSIZE ; RIGHTDESIGN A-class 12 streamer vessels with the industries highest ice class N-class Upgrade to powerful Polarcus Naila upgraded to…
  18. Q2 2014 EARNINGS CALL – Polarcus – slide 18
    Rock solid operational performance in H1 14 Vessel locations 31 July 14 First Arctic broadband project ahead of schedule in Russian Barents Sea Polarcus Asima Polarcus Nadia Polarcus Naila Highly successful Namibian project: Dual…
  19. Q2 2014 EARNINGS CALL – Polarcus – slide 19
    Highly regarded Multi-Client library High quality broadband data library Multi-Client library assets at end Q2 14 USD 6.3 million license sale in mid-July 5m New 4,300 sq. km offshore Ireland project 73m Advanced plans for well…
  20. Q2 2014 EARNINGS CALL – Polarcus – slide 20
    Polarcus Naila update Vessel back in production after 55 days in yard for propulsion upgrade Efficiently towing long-offset, ultra- wide 12-streamer configurations Secured highest (Level 1) DNV-GL Triple-E certification post…
  21. Q2 2014 EARNINGS CALL – Polarcus – slide 21
    Global fleet capacity stabilizing No. Streamer Year Vessels Company Vessel cap. 1 PGS Ramform Atlas 16 1 Dolphin Sanco Sword 12 H1 14 influx of capacity offset by 1 Western Geco Amazon Warrior 16 1 Western Geco Amazon Conqueror 16…
  22. Q2 2014 EARNINGS CALL – Polarcus – slide 22
    Robust E&P spending USD 700 billion 5% E&P growth in 2014 Majors and Europe spending slightly down Competitive pricing environment until vessels are retired Global 3D Offshore km acquired / year 600,000 120 2015 indications…
  23. Q2 2014 EARNINGS CALL – Polarcus – slide 23
    Global seismic opportunities next 12 months NW Europe: Active season for Russia Arctic: Contract and Multi-Client Expecting min. 6-8 vessels GoM: Med: Potential opportunities Potential for 2015 offshore Mexico for 2015/16…
  24. Q2 2014 EARNINGS CALL – Polarcus – slide 24
    Backlog Received contract tenders in USD million (As of end July) USD 155 million backlog* 4th Aug 450 Millions 400 Lower tendering levels leading to 350 price pressure 300 Booked capacity Q3 2014 - 90% 250 200 Booked…
  25. Q2 2014 EARNINGS CALL – Polarcus – slide 25
    Polarcus guidance for 2014 Full year EBITDA guidance approximately USD 200 million Multi-client cash investments in the range of USD 55-65 million Prefunding level of 70% expected Vessel related capital expenditure in the range…
  26. Q2 2014 EARNINGS CALL – Polarcus – slide 26
    Agenda 1 Highlights 2 Financials 3 Operations & Market update 4 Summary & Q&A 5 Appendices 27
  27. Q2 2014 EARNINGS CALL – Polarcus – slide 27
    RIGHTSIZE, RIGHTDESIGN, RIGHTPLAN Industry leading assets Strong operational performance Improved financial flexibility 28
  28. Q2 2014 EARNINGS CALL – Polarcus – slide 28
    Agenda 1 Highlights 2 Financials 3 Operations & Market update 4 Summary & Q&A 5 Appendices 29
  29. Q2 2014 EARNINGS CALL – Polarcus – slide 29
    Income statement Quarter ended Six months ended Year ended (In thousands of USD) 30-Jun-14 30-Jun-13 30-Jun-14 30-Jun-13 31-Dec-13 Revenues Contract revenue 132,237 119,723 248,478 255,521 496,422 Multi-client revenue 5,372 10,758 10,132…
  30. Q2 2014 EARNINGS CALL – Polarcus – slide 30
    Balance Sheet (In thousands of USD) 30-Jun-14 30-Jun-13 31-Dec-13 ASSETS Non-current Assets Property, plant and equipment 959,438 1,000,254 972,802 Multi-client project library 101,329 73,343 88,704 Investment in joint ventures…
  31. Q2 2014 EARNINGS CALL – Polarcus – slide 31
    Cash flow Quarter ended Six months ended Year ended (In thousands of USD) 30-Jun-14 30-Jun-13 30-Jun-14 30-Jun-13 31-Dec-13 Cash flows from operating activities Profit for the period 9,204 6,281 10,166 16,139 43,466 Adjustment for:…
  32. Q2 2014 EARNINGS CALL – Polarcus – slide 32
    Debt overview as of 30 June 2014 Balance Debt Security Size Tenure Maturity Interest % 30 Jun 2014 Unsecured bond Unsecured NOK 230m NOK 226m 3 years Nov-14 14.00% Unsecured bond Unsecured USD 95m USD 95m 5 years Jun-18 8.00%…
  33. Q2 2014 EARNINGS CALL – Polarcus – slide 33
    Reduced cost of financing Debt Old size USD New size USD Maturity Coupon Old Interest New Interest NOK 350m Unsecured Bond - 58 Jul-19 7.73% - 4.5 NOK 230m Unsecured Bond 37 - Nov-14 14.00% 5.2 - USD 95m Unsecured Bond 95 86 Jun-18…
  34. Q2 2014 EARNINGS CALL – Polarcus – slide 34
    Awards through RIGHTDESIGN DYNPOS-AUTR Systems redundancy CLEAN DESIGN IMO Green Passport with DP2 High specification DNV-GL Triple-E exhaust catalysts Environmental & Energy Efficiency Sentinel solid streamers ULSTEIN X-BOW…
  35. Q2 2014 EARNINGS CALL – Polarcus – slide 35
    Polarcus leads the world with DNV-GL Triple-E Polarcus has the only vessels in the world with Triple-E Level 1 rating The Triple-E Environmental & Energy Efficiency rating initiative: Applicable for all ships A tool for…
  36. Q2 2014 EARNINGS CALL – Polarcus – slide 36
    Polarcus ESSA and Arctic accreditations Det Norske Veritas +1A1, E0, ICE 1A*, CLEAN DESIGN, NAUT-AW, HELDK, COMF-V(3), TMON, WINTERIZED BASIC, SPS, BWMT DNV Qualification Statement for Arctic Operational Procedures The ONLY company in…
  37. Q2 2014 EARNINGS CALL – Polarcus – slide 37
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