31
Höegh LNG – The floating LNG services provider 1Q 2017 Presentation of financial results 24 May 2017
Höegh LNG – The floating LNG services provider
1Q 2017 Presentation of financial results
24 May 2017
Forward looking statements
2
This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about
Höegh LNG’s 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; changes to
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, including the impact from changes in financial
markets; changes in the ability to achieve 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.
Q1 2017 highlights
Operational update
Market outlook
Financial overview
Summary
Appendix
3
Highlights
4
EBITDA of USD 36.7 million and profit after tax of USD 11.4 million
USD 0.125 per share dividend declared for Q2 2017
HLNG01 refinanced with NOK 1,500 million bond
HoA with LNG producers for FSRU terminal infrastructure in Pakistan
Höegh Giant delivered and USD 190 million in debt drawn
Q1 2017 highlights
Operational update
Market outlook
Financial overview
Summary
Appendix
5
Solid operational track record
6
99.87 % 99.70 % 99.95 % 99.94 % 99.51 % >99.50 %
2013 2014 2015 2016 2017TD Target
Technical availability
1.07
0.44
0.73
0.00 0.00
<1.00
2013 2014 2015 2016 2017TD Target
LTIF1
1 Lost Time Injury Frequency
Independence
PGN FSRU Lampung
Höegh Gallant
Höegh Grace
Neptune
FSRU NB
FSRU NB
FSRU NB
Arctic Lady
Arctic Princess
GDF Suez Cape Ann
Statoil4 % Total
4 %
Engie9 %
GNL Penco14 %
Klaipedos Nafta7 %
SPEC17 %
PGN LNG14 %
EGAS2 %
Quantum Power14 %
GEI15 %
Increasing diversification as revenue backlog grows
Revenue backlog of USD 6.2 billion1
Around 14 years average remaining contract
length
QP and GEI contracts further diversify backlog
Each contract for 20 years with an average
EBITDA contribution of USD 36 million annually
No contract exceeding 17% of backlog
55% of backlog from counterparts operating in
investment grade countries (Norway, France,
Colombia, Chile, Lithuania)
7
Revenue backlog1 by charterer
1 Proportionate share of JVs’ EBITDA
Pakistan FSRU project: Further progress for the infrastructure
8
FSRU site
Source: Navionics maps, HLNG, GEI
Easy access
from sea
16 km offshore pipeline
route, to be constructed
by the consortium
Onshore facilities
Key terms: 20 year FSRU contract with USD
36 million in annual EBITDA signed
Rationale: Cover energy deficit in power
production and industry by using low-cost
LNG
Höegh LNG working together with LNG
producers QatarPetroleum, Total, ExxonMobil
and Mitsubushi to develop, own and operate
the jetty and pipeline to connect the FSRU
with the local gas grid
Timeline: Target to complete the EPC
contract for the infrastructure in mid-2017 with
FID thereafter. Startup under the FSRU
contract in 2H 2018
Quantum Power/Ghana working towards FID in mid-2017
9
Source: Navionics maps, Quantum Power
New pipeline to be provided
by Quantum Power
FSRU site
Spread mooring system (QP)
Pipeline to shore (QP)
FSRU: 20 year FSRU contract with USD 36
million in annual EBITDA signed
Infrastructure: EPC agreement between
Quantum and Micoperi contractors signed
Rationale: Replace expensive liquid oil
products with LNG and cover energy deficit in
power production
Timeline: Objective mid-2017 FID and startup
under the FSRU contract in mid-2018
Penco Lirquen FSRU project in Chile subject to delay
10
HLNG and Penco has agreed extension to
existing Charter Party
Start-up is delayed by 12-18 months, i.e. now
end-2019/Q2 2020
Penco LNG and its shareholders Electricite de
France, BioBio Genera and Cheniere remains
fully committed to the project
Indigenous consultation process has been
restarted
EPC contract to be re-tendered shortly
Financing package for the infrastructure and
power plant to be restarted end 2017
Illustration of FSRU terminal in Bay of Concepcion
Fleet update: Höegh Giant delivered on 27 April
11
Höegh Giant delivered from Hyundai Heavy
Industries on 27 April, 2017
The FSRU will start a LNGC short-term
contract early June and trade until start-up
under a 20-year contract in Ghana mid-2018
Outstanding HSE construction track record:
Zero fatalities
Zero LTIs
USD 190 million in debt drawn down to pay
for the final USD 161 million yard installment,
thus releasing USD 29 million of equity
Q1 2017 highlights
Operational update
Market outlook
Financial overview
Summary
Appendix
12
LNG supply to exceed demand and keep prices competitive
13
Source: Wood Mackenzie
Floating regas is key to open up new markets for LNG
14
Source: Wood Mackenzie
Major strategic shifts taking place in the market
15
The LNG market has shifted from a seller’s market to a buyers’ market
US/China agreement allowing Chinese companies to import LNG directly from the
US, will put pressure on all Asian exporters
South Korea’s new President decided to phase out coal in power production, will
increase significantly demand for LNG
Long market and competitive prices drives significant increase in demand in Q1 2017
across all markets:
Total market, 75 million tonnes, + 13% from Q1 2016
Japan, 25 million tonnes, + 12%
South Korea, 11.6 million tonnes, + 22%
China, 6.1 million tonnes, + 29%
India, 4.9 million tonnes, + 12%
Source: Fearnley volume data
New FSRUs planned to take advantage of Buyer’s market:
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Location Strategic rationale
Australia To cover regional gas shortage
Croatia To diversify gas imports
Hong Kong To access world market for natural gas
Argentina 3rd FSRU To meet increasing power demand
Poland To diversify away from pipeline gas
Bangladesh 2nd FSRU To cover energy deficit
Lebanon 1 -3 FSRU’s To replace expensive liquid fuels
Turkey 2nd FSRU To cover gas shortage and diversification of supply
Non-exhaustive list
Pipeline of around 40 projects around the globe
Existing
Under construction / awarded
Potential
17
Stable orderbook
The orderbook stands at 11
FSRUs, of which 4 are
uncommitted
Uncommitted FSRUs (4
newbuildings, 1 existing unit)
compare to 14% of the total
fleet and orderbook of FSRUs
Four existing FSRUs are
serving contracts that are
about to expire, or at
contracts with undetermined
timelines
18
7
8
7
1 1
1
2
1
1
3
1
1
2
0
2
4
6
8
10
12
Höegh LNG Excelerate Golar LNG BW Gas Other
Un
its
FSRU fleet and orderbook1 by owner and employment
On contract Available Committed NB Uncommitted NB
OLT
MOL
Gazprom
Exmar
Maran
Kolin
1 Orderbook defined as firm orders, excluding LOIs, options, conversions
FSRU fleet and orderbook1 by owner and employment
Q1 2017 highlights
Operational update
Market outlook
Financial overview
Summary
Appendix
19
Financial highlights
20
USD million 1Q 2017 4Q 2016 1Q 2016 FY 2016
Income statement
Total income 68.7 62.3 55.4 233
EBITDA 36.7 31.2 26.6 111
Net profit after tax 11.4 0.8 6.3 14
Dividend per share (USD per share) 0.125 0.10 0.10 0.40
Free cash flow 14.1 8.8 3.4 21.7
Financial position
Cash and marketable securities 365 332 343 332
Total assets 1,843 1,713 1,667 1,713
Adjusted equity 672 677 592 677
Net interest bearing debt 705 585 616 585
Adjusted equity ratio 36.6 % 39.5 % 35.5 % 39.5 %
Earnings to make further stepwise improvements as new contracts start up
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1 Equity portion of JVs
2 Assumed contract
Höegh Grace adding USD 10
million to Q1 2017 EBITDA
20 year contract with SPEC in
Colombia
Next earnings drivers:
Höegh Giant, 20 year contract in
Ghana: EBITDA contribution of
USD 36 million per year
FSRU #9, 20 year contract in
Pakistan: EBITDA contribution of
USD 36 million per year
Pakistan infrastructure project
FSRU #8, 20 year contract in
Chile: EBITDA contribution of
USD 36 million per year
FSRU #10, marketed for long-
term contracts
Further newbuildings
0
50
100
150
200
250
300
350
Q1 2017 ex.Grace
Höegh Grace Höegh Giant FSRU #8 FSRU #9 FSRU #10
US
D m
illi
on
EBITDA trajectory, current assets and orderbook
Q1 2017 annualised
EBITDA1
2
Fully funded for remaining newbuilding programme
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1 Includes only committed capex
2 Excluding restricted cash and cash in Höegh LNG Partners
190-223 >200
>200
>200
50
20
-15
-50
0
50
100
150
200
250
300
350
400
450
500
2017 2018 2019
US
D m
illi
on
FSRU #7 debt FSRU #8 debt FSRU #9 debt FSRU #10 debt Equity
Source USDm
Cash & cash equivalents (2) 126
Marketable securities 212
Outstanding amount seller’s credit 45
HLNG01 repayment -104
Cash & cash equivalents 270
Committed financing FSRU#7 223
Total committed funding 503
Assumed financing FSRU#8-10 >600
Total funding >1,102
Remaining newbuilding capex 900
Funding of remaining capex (USD 0.9 billion)1 Liquidity reserve 31 March 2017 (ex HMLP)
Höegh LNG Partners remains an attractive funding source
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0
5
10
15
20
25
30
2015 2016 1Q1 2017 annualized
US
D m
illi
on
HMLP distributions to Höegh LNG
MLP distribution IDR
Drop-down of 51% of Höegh
Grace completed 2 January,
2017
EV/EBITDA 9.25x
Net proceeds: USD 92 million
Following the 51% drop-down,
distributions were increased by
4.2%. Höegh LNG as parent
now receives USD 6.6 million
per quarter, as well as USD
0.3 million in IDR distributions
Drop-down of the remaining
49% dependent on market
conditions, but a targeted drop-
down is expected in 2017
Segment information USDm HM
LP
Op
era
tio
ns
BD
an
d
pro
ject
execu
tio
n
Co
rpo
rate
an
d o
ther
To
tal
Q1 Q1 Q1 Q1 Q1
Income statement 2017 2017 2017 2017 2017
Freight revenue 36.9 27.6 - - 64.5
Management and other income - 0.7 - - 0.7
Share of results from inv. in JVs 2.2 1.2 - - 3.4
TOTAL INCOME 39.1 29.5 - - 68.6
Charter hire expenses - (8.8) - - (8.8)
Bunker and other voyage related expenses (0.1) - - - (0.1)
Operating expenses (6.2) (5.2) (0.4) - (11.8)
Project administrative expenses (1.0) (1.8) (1.5) - (4.3)
Group administrative expenses (1.6) - - (3.5) (5.1)
Business development expenses - - (1.9) - (1.9)
EBITDA 30.2 13.7 (3.8) (3.5) 36.7
Investments in FSRUs and NBs 844 287 243 1,374
Interest-bearing debt 508 197 379 1,084
Group ex. HMLP
Updated segment reporting1
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1 Please see note 3, Segment information, in the 1Q 2017 quarterly report for further details, as
well as note 5 commitments and financing for a detailed debt overview
2 Due to US GAAP reconsiliation the HMLP segment is not directly comparable to reported
financials from Höegh LNG Partners
EBITDA from assets owned by
HMLP, including 100%
consolidation of Höegh Grace
The cost of
managing the group
Costs of securing
new business
EBITDA from commercial
contracts and assets on the water
2
Q1 2017 highlights
Operational update
Market outlook
Financial overview
Summary
Appendix
25
26
USD 6.2 billion in contracted revenues
Summary
USD 0.125 per share dividend declared for 2Q 2017
Underlying results reaching a new high in Q1 2017
Long LNG market and competitive prices continue to drive demand for
new FSRUs
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Q&A session Call-in details:
Norway +47 21 00 26 13
United Kingdom +44 (0)330 336 9104
United States +1 719 325 2403
Participant passcode: 278579
Q1 2017 highlights
Operational update
Market outlook
Financial overview
Summary
Appendix
28
Income Statement – Joint Ventures according to equity method
29
USD million 1Q22017 4Q2016 3Q2016 2Q2016 1Q2016
Freight revenues 64,5 56,9 53,6 52,3 51,1
Management and other income 0,7 1,7 1,0 1,5 1,0
Share of results from investments in joint ventures 3,4 3,7 3,5 3,3 3,3
TOTAL INCOME 68,6 62,3 58,1 57,1 55,4
Charterhire expenses (8,8) (8,9) (8,9) (8,8) (8,8)
Bunker expenses (0,1) (0,2) (0,2) (0,1) (0,0)
Operating expenses (11,7) (10,6) (12,1) (11,7) (9,3)
Project administrative expenses (4,3) (4,3) (2,9) (2,9) (3,0)
Group administrative expenses (5,1) (5,7) (5,2) (4,8) (4,8)
Business development expenses (1,9) (1,4) (2,3) (1,8) (2,9)
EBITDA 36,7 31,2 26,5 27,0 26,6
Depreciation (9,3) (9,1) (9,2) (9,2) (7,3)
Reversal of impairment (impairment) - - - -
EBIT 27,4 22,1 17,3 17,8 19,3
Interest income 0,4 0,3 0,3 0,4 0,5
Interest expenses (13,8) (13,3) (14,3) (14,6) (12,9)
Other financial items (0,6) (5,6) 1,1 0,4 0,2
PROFIT (LOSS) BEFORE TAX 13,4 3,5 4,4 4,0 7,1
Taxes (1,9) (2,7) (1,1) (0,5) (0,8)
NET PROFIT (LOSS) 11,4 0,8 3,3 3,5 6,3
Financial position- Joint Ventures according to equity method
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USD million 31.03.2017 31.12.2016 30.09.2016 30.06.2016 31.03.2016
Newbuildings under construction and vessels 1 374 1 269 1 245 1 247 1 225
Shareholder loans to joint ventures 6 7 9 10 13
Mark-to-market on hedging instruments 8 8 0 0 0
Other assets 77 78 71 73 66
Restricted cash (non-current) 14 19 23 20 20
Current cash and marketable securities 364 332 268 294 343
TOTAL ASSETS 1 843 1 713 1 616 1 644 1 667
Total equity 593 596 442 434 456
Investments in joint ventures 41 49 76 85 83
Interest bearing debt 1 084 936 955 966 979
Mark-to-market on hedging instruments 51 57 72 86 76
Other liabilities 74 75 71 73 73
TOTAL EQUITY AND LIABILITIES 1 843 1 713 1 616 1 644 1 667
Total equity adjusted for hedging reserves 672 677 576 585 592
Equity ratio adjusted for hedging reserves 37 % 40 % 36 % 36 % 36 %
Net interest bearing debt 705 585 663 650 616
Cash flow statement- Joint Ventures according to equity method
31
USD million 1Q2017 4Q2016 3Q2016 2Q2016 1Q2016
Net profit or (loss) before tax 13 4 4 4 7
Adjustments of non-cash P&L items and interest 20 21 19 19 3
Net changes in working capital, other (5) (3) (4) (4) 5
Net cash flow from operating activities 28 22 19 19 15
Net (investments) proceeds in marketable securities (75) 55 25 10 11
Investments newbuildings under construction and vessels (111) (33) (4) (30) (199)
Proceeds from sale of vessel - - - - 18
Proceeds of repayment on shareholders loans 1 2 2 2 2
Net cash flow from/(used in) investing activities (185) 24 23 (18) (168)
Net proceeds form equity issuance - 112 - - -
Proceeds from borrowings 175 - - - 200
Repayment of borrowings (27) (15) (15) (15) (12)
Dividend paid to non-controllling interest (MLP) (7) (5) (4) (4) (4)
Dividend paid to shareholders of the parent (10) (8) (8) (8) (8)
Interest paid (14) (14) (14) (14) (12)
Increase/decrease in restricted cash 3 (1) - (2) 4
Other financing activities (8) 1 - - (2)
Net cash flow from/(used in) financing activities 112 70 (41) (43) 166
TOTAL CASH FLOW (45) 116 1 (42) 13
