Höegh LNG - the FSRU provider
1
Q3 2019Presentation of financial results
21 November 2019
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.
Agenda
3
Highlights
Company update
Market update
Financials
Summary
Highlights for the third quarter of 2019
4
Highlights
EBITDA of USD 55.9 million – y-o-y growth of 17%
Net profit of USD 3.6 million
Dividend of USD 0.025 per share paid in the third quarter of 2019
Höegh Galleon delivered from yard and commenced interim LNGC charter contract with Cheniere
YTD 99.4% technical availability across the global fleet
Subsequent events
Dividend of USD 0.025 per share declared for the fourth quarter of 2019
AIE Australia announced modification to FSRU terminal development consent – applying for increased LNG import volumes
Agenda
5
Highlights
Company update
Market update
Financials
Summary
Growth in income and EBITDA
6
219 233279
318 323
0
50
100
150
200
250
300
350
400
2015 2016 2017 2018 Q3 2019 An.
USD
milli
on
Total income
Total income Recognition of future revenue
90111
148,901173
210
0
50
100
150
200
250
2015 2016 2017 2018 Q3 2019 An.
USD
milli
on
EBITDA
EBITDA Recognition of future revenue
1: Excluding recognition of future revenueHöegh Galleon was delivered in Q3 2019 so the unit has minor impact on annualized YTD 2019 figures
Port Kembla, New South Wales, Australia
Modification due to increased demand from customers
TCP close to completion
Conditional on FID
Start-up 2021
New projects added
7
Crib Point, Victoria, Australia
EES1 process ongoing
TCP signed in December 2018
− 10-year contract
− Annual EBITDA USD 31 million
Conditional on FID
Start-up 2022
Asian based project
Höegh LNG has exclusivity
Conditional on FID
Sponsor in the process of seeking permit and governmental approval
Start-up 2020/21
In official tender processes
Indian subcontinent
Latin America
FSRU project #3
FSRU project #4 & #5
1: Environment Effects Statement
6,4
0,8
0,8
0,8 8,9
Current backlog AIE AGL Project #3 Backlog incl. exclusiveprojects
Backlog duration (years)
Solid contract backlog with uplift potential
8
Gross revenue: USD 2.9 billion
Duration: 6.4 years
Significant uplift potential
Solid support for upcoming refinancings
Potential projects1
1: Assuming 10 year contracts
Avenir LNG update
Signed 3 year TCP with Petronas for first vessel− Bunkering to LNG fueled vessels across Malaysia and
transport services for small-scale terminals
− Collaboration on development of small-scale LNG projects
JDA1 with Höegh LNG, SPEC LNG and Calamari LNG to provide additional services from Höegh Grace in Colombia
Collaboration with Golar Power in developing small-scale LNG market in Brazil (announced Nov. 2019)− Second 7 500 cbm vessel to deliver LNG to ports across the
country
− Ship-to-ship bunkering
6 small-scale LNGCs and 1 small-scale LNG receiving terminal under construction
Expecting HLNG’s remaining capital commitment of USD 18 million to be paid in during 2020
9
First 7 500 cbm LNGC newbuild at Keppel/Nantong shipyard
Higas LNG receiving terminal in Sardinia
1: Joint Development Agreement
Agenda
10
Highlights
Company update
Market update
Financials
Summary
Natural gas/LNG vital for the transition to a decarbonised future
11
Renewables supported by gas/batteries
Strong growth for natural gas
Fuel swithcing from coal and oil to gas
Source: DNVGL Energy Transition 20191 EJ = 1 tcf (Trillion cubic feet)
0
100
200
300
400
500
600
700
EJ/y
r
World primary energy supply by source
Wind
Solar PV
Solar thermal
Hydropower
Biomass
Geothermal
Nuclear fuels
Natural gas
Oil
Coal
Record FIDed volume secure future LNG supply growth
12
Source: IHS Markit, Höegh LNG
14
24 23
28
50
4
14
5
23
9
2724
29 29
21
84
22
6367
Milli
on to
nnes
ann
ual c
apac
ity
Liquefaction capacity FIDs
Source: IHS Markit
318
471
4225 6 7
1014
49
Totalvolume2018
2019F 2020F 2021F 2022F 2023F 2024F 2025F Totalvolume2025F
Milli
on to
nnes
LNG supply growth forecast, 2018 - 2025Total volume New volume
LNG demand growth continues
13
19
21
23
25
27
29
31
33
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Milli
on to
nnes
Global LNG trade by month
2018 2019
Source: IHS Markit, Waterborne
Total LNG demand growth 15% (35.3 MMt) YTD 2019
European LNG demand growth 97% (31.4 MMt) YTD
2019
Chinese LNG demand growth 19% (7.1 MMt) YTD 2019
Robust FSRU potential
14
1: Includes projects subject to FID, projects awarded FSRU exclusivity, cancelled projects excludedSource: IHS Markit, Höegh LNG
2: Includes proposed projects subject to FID which have awarded FSRU contract or FSRU exclusivity. Projects have a varying likelihood of completion and no time constraintSource: IHS Markit, SEB research, Höegh LNG, publicly available company information
7 – 9
5 – 10
Europe
Americas
25 – 37Asia/ME
5 – 6Africa
42 – 62 SUM
Proposed floating regasification projects2 by region
2 2
3 3
5
1
6
3
10
3
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Annual FSRU awards1
Award per year Average 2010-2017 7Of which have awarded FSRU
FSRU supply side at 30 September 2019
15
35
26 5
8Total units
Committed as FSRU
6Contract expiry YE 2023
Current fleet1 Orderbook1
FSRUs rolling off contracts are likely extended or replaced
No new orders since 2018
Some units not employed as FSRUs have awards pending FID
1: Including purpose built FSRUs and conversions, barges excludedSource: publicly available company information, HLNG estimates
Agenda
16
Highlights
Company update
Market update
Financials
Summary
Income statement for the quarter ended 30 September 2019
17
Höegh Gallant: one-off effects in Q2
Höegh Giant: higher rate vs. Q2
Höegh Galleon: delivered on 27 August
USD million Q3 2019 Q2 2019
Total income 82.2 75.5
Charterhire and other expenses -0.3 -0.2Operating expenses -16.4 -18.9Administrative and BD expenses -9.6 -10.7
EBITDA 55.9 45.7
Depreciation -26.7 -26.4Impairment 0.0 0.0
EBIT 29.2 19.2
Net interest expense -22.6 -20.0Net other f inancials -1.2 -1.7
Profit before taxes 5.4 -2.4
Corporate income tax -2.3 -1.2
Profit for the period 3.2 -3.6
-3,6
4,81,0 -0,9
1,9 3,2
-8
-6
-4
-2
0
2
4
6
8
Net loss Q22019
HöeghGallant
Höegh Giant HöeghGalleon
Net Other Net profit Q32019
USD
milli
on
Net profit variation
USD million 30.09.2019 30.06.2019
Investments in FSRUs 2 318 2 090Investments in new buildings 7 91Other 117 115Cash and short-term restricted cash 178 140
Total assets 2 621 2 437
Equity attributable to the parent 394 431Non-controlling interests 286 274
Total equity 680 705
Interest-bearing debt 1 804 1 619Other 137 113
Total equity and liabilities 2 621 2 437
NIBD 1 608 1 461Adjusted equity 800 809Adjusted equity ratio 30 % 33 %
Financial position at 30 September 2019
18
1 Includes Right of Use assets (LNGCs)2: Adjusted for mark-to-market of hedges
1
Book equity ratio of 30%2
Total assets increased due to delivery of Höegh Galleon
Net interest-bearing debt of USD 1 608 million
No remaining Capex for newbuilds
0
50
100
150
200
250
300
350
400
450
500
Q4 19 2020 2021 2022 2023 2024 2025 2026
USD
mill
ion
Debt repayment schedule
Amortisation IFRS 16 Leases Balloons Bonds
Refinancing in progress
191: All balloons assumed refinanced in full, extending current amortisation profiles
HLN
G 0
2
HLN
G 0
3
1
Independence commercial tranche: USD 61 million
Good progress with the banks
Debt maturities in 2020:
HLNG02 bond loan: USD 130 million
Planning initiated
Agenda
20
Highlights
Company update
Market update
Financials
Summary
Summary
21
Significant pipeline of future FSRU projects globally
Two new potential FSRU projects added
EBITDA of USD 55.9 million and net profit of USD 3.2 million for Q3 2019
Growth in income and EBITDA continues
22
Q&A session21 November 2019 - 09:00 CET
Call-in details:Norway +47 2100 2610United Kingdom +44 (0)330 336 9125United States +1 323 794 2093
Participant passcode: 7190671
Webcast: https://webtv.hegnar.no/presentation.php?webcastId=98164523