Höegh LNG – The floating LNG services provider
Second Quarter 2012
Presentation of financial results 31 August 2012
Forward looking statements
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This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about
its operations. All statements, other than statements of historical facts, that address activities and events that will, should, could or may
occur in the future are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,”
“forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms and similar expressions are
intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to
certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes
and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue
reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Höegh LNG
undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or
otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changes
in LNG transportation and regasification market trends; changes in the supply and demand for LNG; changes in trading patterns; changes
in applicable maintenance and regulatory standards; political events affecting production and consumption of LNG and Höegh LNG’s
ability to operate and control its vessels; change in the financial stability of clients of the Company; Höegh LNG’s ability to win upcoming
tenders and securing employment for the FSRUs on order; changes in Höegh LNG’s ability to convert LNG carriers to FSRUs including
the cost and time of completing such conversions; changes in Höegh LNG’s ability to complete and deliver projects awarded; increases in
the Company’s cost base; changes in the availability of vessels to purchase; failure by yards to comply with delivery schedules; changes
to vessels’ useful lives; changes in the ability of Höegh LNG to obtain additional financing, in particular, currently, in connection with the
turmoil in financial markets; the success in achieving commercial success for the projects being developed by the Company; changes in
applicable regulations and laws; and unpredictable or unknown factors herein also could have material adverse effects on forward-looking
statements.
Agenda
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Highlights
Financials
Operational review
Market outlook
Summary
Highlights Q2 2012
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• Net profit USD 0.6 million, up from a net loss of
USD 2.7 million in Q2 2011
• EBITDA USD 9.7 million, up 33 % from USD 7.3
million in Q2 2011
• Awarded a project specific engineering and cost
study for a planned FLNG development in Asia
• Extended the time charter for Norman Lady at
improved commercial terms
Subsequent Events:
• LNG Libra delivered and commenced a six month
charter for the North West Shelf project in Australia
• Commitment letters received for a USD 250 million
senior secured credit facility for the debt financing
of the Klaipedos Nafta FSRU
Agenda
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Highlights
Financials
Operational review
Market outlook
Summary
Income statement
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USD million 2Q2012 1Q2012 2Q2011 1H2012 1H2011 2011
TOTAL INCOME 32,3 27,7 26,5 60,0 52,5 109,8
Charterhire expenses (5,2) (5,2) (5,0) (10,3) (10,0) (20,1)
Operating expenses (7,5) (7,7) (7,3) (15,2) (14,6) (32,4)
Administrative expenses (2,9) (3,7) (3,7) (6,6) (7,4) (17,0)
Business dvelopment expenses (7,1) (5,4) (3,2) (12,4) (6,4) (14,2)
EBITDA 9,7 5,8 7,3 15,5 14,0 26,1
Depreciation and impairment (4,1) (4,0) (4,5) (8,1) (9,1) (19,6)
EBIT 5,6 1,8 2,7 7,5 4,9 6,5
Interest expenses (6,1) (6,1) (6,1) (12,2) (12,4) (25,2)
Interest income 0,0 0,0 0,2 0,1 0,6 0,7
Other financial items 1,0 0,4 0,1 1,4 (0,4) 0,2
Taxes - - 0,3 - 0,3 0,2
NET PROFIT OR (LOSS) 0,6 (3,9) (2,7) (3,3) (7,0) (17,7)
Financial position
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USD million 30.06.2012 31.03.2012 31.12.2011
Licences, design and other intangibles 83 83 83
Vessels and newbuildings 578 578 502
Restricted cash 23 23 13
Other non-current assets 21 23 16
Marketable securities 144 186 90
Current cash and short term deposits 79 38 37
Other current receivables 8 6 5
TOTAL ASSETS 937 937 745
Total equity 326 343 133
Interest bearing debt 433 436 439
MtM of interest rate swaps 138 120 132
Other l iabilities 40 38 41
TOTAL EQUITY AND LIABILITIES 937 937 745
Total equity adjusted for MtM of interest rate swaps 464 463 265
Equity ratio adjusted for MtM of interest rate swaps 50% 49% 36%
Net interest bearing debt less cash, mark.securities and restricted cash 187 189 300
Cash flow statement
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USD million 2Q2012 1Q2012 2Q2011 1H2012 1H2011 2011
Net profit or (loss) before tax 1 (4) (3) (3) (7) (18)
Adjustments of non-cash P&L items 10 10 10 20 21 44
Net changes in working capital, other 1 (13) (2) (12) (5) (2)
Net cash flow operating activities 11 (7) 6 5 8 25
Proceeds from sale of marketable securities/prom.note 42 60 52 102 52 52
Investments in marketable securities - (155) - (155) - (90)
Investments in vessels and newbuildings (2) (85) (26) (87) (26) (57)
Investments in intangibles and equipment (1) (2) (2) (3) (4) (7)
Net cash flow investing activities 39 (182) 25 (142) 23 (102)
Repayment of borrowings (3) (3) (3) (6) (6) (12)
Interest paid (6) (6) (6) (12) (13) (25)
Issue of share capital net of transaction cost - 202 - 202 - 126
Other financing activities (1) (3) - (4) - (4)
Net cash flow financing activities (10) 190 (9) 180 (19) 85
TOTAL CASH FLOW 41 1 22 42 13 8
Agenda
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Highlights
Financials
Operational review
Market outlook
Summary
10
Regasification
Status for Klaipedos Nafta FSRU for Lithuania
The FSRU will provide a second import
gate for natural gas to Lithuania and add
to the security of energy supply
The Project is on schedule on all
activities for planned start up in Q3 2014
New LNG terminal law adopted by the
Parliament of Lithuania in June 2012
Klaipeda City Council approved the
construction of the LNG terminal in
August 2012
Debt financing commitments received for
USD 250 m, subject to ECA approval and
documentation
FSRU
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The LNG import terminal will connect to Indonesia's existing main grid and supply gas to
Sumatra and the Jakarta region replacing supply from depleting gas fields in Sumatra
Technical specifications of FSRU and mooring changed due to the specifications at the
new site
Relevant relocation expenses covered by PGN
Operations planned to start in Q2 2014
Debt financing process now expected to be completed during first half of 2013
Final FSRU pre-delivery instalment to be paid in November 2012
Regasification
Status for Perusahaan Gas Negara FSRU at Lampung Indonesia
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Regasification
FSRU contract award opportunities
Project Bid submitted Selection Contract Start-up New / Conversion
Indonesia* x 2012 2012/2013 2014 Conversion
Chile x Q3 2012 Q4 2012 Q4 2014 New
Estimated timing of near-term FSRU project awards
(*) After putting the project on hold earlier this year, the Indonesian government has
recently decided to continue the construction of the Central Java FSRU
In addition to the above HLNG is pre-qualified for four FSRU projects located in the
Middle East, South America and Asia, where the invitations to bid are expected to be
issued by year-end 2012
Fleet and Operation
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Existing fleet operated safely and without incidents
Extension of time charter for Norman Lady for 1+2 years at improved terms
LNG Libra delivered and commenced a six month charter party to the North West Shelf
project in Australia in July
Option to purchase 50% or 100% of STX Frontier. Vessel being marketed with availability
from second half 2013.
LNG Libra STX Frontier Norman Lady
FLNG
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Paid Pre-FEED engineering work for an
FLNG exploring the Tamar gas field offshore
Israel completed in August 2012
Paid Field specific FLNG engineering and
cost study for a large Asian oil and gas
company completed in August 2012
The process to seek potential
partners/investors for Höegh LNG’s FLNG
business is progressing
Agenda
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Highlights
Financials
Operational review
Market outlook
Summary
LNG is the world’s fastest-growing source of energy
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Natural gas demand driven by
Economic growth driving power
generation and industrial activity
Fuel substitution due to emission
reductions and cost savings
LNG demand
11% of natural gas transported as LNG
LNG expected to grow more than twice
as fast as total global gas production
LNG trading volumes have historically
been limited by liquefaction capacity
Source: Wood Mackenzie
Expected LNG supply growth backed by committed liquefaction projects
A large number of new gas fields are being
developed with LNG export facilities to meet
the increasing demand
Production expected to reach 330 mtpa in
2017 – up from 242 million tonnes in 2011
Australia the "base load" for new LNG
production post 2015 accounting for
approximately 50% of incremental supply
The ongoing development of shale gas
resources in North America has created a
surplus of natural gas and an export potential
up to 90 mtpa subject to government
approvals
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Source: BP
Country Project Name FID Start-Up MTPA
Algeria Gassi Touil Taken 2013 4.7
Papua New Guinea PNG LNG Taken 2014 6.6
Angola ALNG Taken 2012 5.2
Australia Australia Pacific Taken 2015 4.5+4.5
“ Browse 2013 2018 4.0+4.0
“ Gladstone Taken 2015 7.8+10.0
“ Gorgon Taken 2014 5.0+5.0+5.0
“ Ichtys Field Taken 2016 4.2+4.2
“ Prelude Taken 2016 3.5
“ Queensland Curtis Taken 2014 4.25+4.25
“ Wheatstone Taken 2016 4.4+4.4
Indonesia Tangguh 3 2012 2015 3.8+3.8
Nigeria Brass 2013 2017 5.0+5.0
“ NLNG 2013 2018 4.7
Papua New Guinea Liquid Niguini 2012 2014 2.0
US Sabine Pass Taken 2015 9+9
Malaysia Petronas FLNG Taken 2015 1,2
TOTAL 96-139
Around 30 FSRU regasification projects in pipeline
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Source: Höegh LNG
Around 30 projects in pipeline
16 projects in Asia/Middle East
6 projects in South America
1 project in North America
9 projects in Europe/Africa
HLNG has several bids in process
Existing
Under construction / awarded
Potential
Existing
Under construction / awarded
Potential
Owner Vessels Customers*
Höegh LNG 2+3 GDF Suez, Perusahaan
Gas Negara, Klaipedos
Nafta
Golar LNG 4+2 Petrobras (2), Pertamina,
Dubai Power Authority
Excelerate 8+1 YPF (2), Kuwait Oil
Corporation, Petrobras,
PREPA, Israel Electric
Corporation
* Projects in operation or awarded
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Japan – The big unknown / upside for the spot market – Nuclear or not?
Total nuclear power output reached 27 TWh
pre-Fukishima, about 28% of Japan’s
electricity production.
Two of 54 reactors now back in operation
2010 LNG import were 71 million tonnes
LNG imports from March 2011 to March
2012 totalled at 83 million tonnes, up 12
mtpa or 17% from 2010
To replace all nuclear capacity in Japan by
LNG, 45 mtpa would need to be imported
Will the nuclear capacity be brought back?
Upside: 33 million tonnes or 550 cargoes of
LNG per year
Source: Sparebank 1 Markets, Reuters, Fearnley LNG
Fukishima disaster
Fukishima disaster
Japan nuclear power output
Evolving FLNG project portfolio
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Source: Höegh LNG
Under construction / awarded
Potential
Country Location
of field
Main
sponsors Status
Australia Prelude FID achieved
Australia Cash Maple Pre-FEED done
Australia Sunrise Pending resolution
with Timor
Australia Bonaparte On-going pre-FEED
Brazil Santos FID delayed until or
post 2013
Colombia Caribbean
coast
Signed service
agreement
Indonesia Abadi FEED to start 2012
Israel Tamar Pre-FEED done
Malaysia Sarawak
Kanowit
FID achieved
Malaysia Sarawak
Rotan
On-going pre-FEED
P. New
Guinea
Gulf FLNG Under review
P. New
Guinea
Gulf of
Papua
In Process
USA US Gulf On-going FEED
Global LNG fleet overview
14 FSRUs in fleet
6 FSRU newbuildings on order plus 2
options to change from LNGC to FSRU
363 LNG vessels in fleet
75 newbuildings on order (21%)
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Type Delivered Newbuildings
on order
Under
conversion Total
LNGC 363 75 - 438
FLNG - 2 - 2
FSRU 14* 6** 1 21
Total 377 83 1 461
LNGC fleet FSRU fleet
* 10 newbuildings and 4 conversions
** In additional to six firm FSRU orders globally, Golar LNG has options to convert two LNGC orders to FSRUs
Source: Wood Mackenzie, LNG Unlimited, Fearnley LNG
Agenda
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Highlights
Financials
Operational review
Market outlook
Summary
Summary
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Positive net profit in Q2 2012
Extended charter agreements for Norman
Lady at improved commercial terms
Completed two paid FLNG studies for
Israeli and Asian offshore gas fields
Libra delivered in July 2012 and now on
charter with the North West Shelf project in
Australia
Committed debt financing subject ECA
approval and documentation for Lithuanian
FSRU project
