MODEC, Inc. 218 Financial Results Analysts Presentation February 6, 219
Highlight Market Review & Outlook Financial Results
FY218 : New Award 2 3 5 4 Track Record in Gulf of Mexico 1 FSO 1 FSO Ta Kuntah - EPCI + Time Charter TLP Client Contract Eni Mexico Area 1 FPSO Eni Mexico S. de R.L. de C.V. EPCI+Charter (15years + 5 one-year extension options) 2 3 Stampede TLP - EPCM + Commissioning Shenzi TLP - EPC + pre-commissioning Field Location Water Depth Oil Production Area1(Mexico) 32m 9, bopd 4 Marco Polo TLP - EPC Gas Production Storage Capacity 75 mmscfd 9, bbls 5 Prince TLP - EPCI 3
FY218: Delivered Units FSO Ailsa FPSO Cidade de Campos dos Goytacazes MV29 Client Maersk Client Petrobras Field Culzean Charter Period 2 years Water Depth 9m Field Tartaruga Verde & Tartaruga Mestiça Oil Handling 25, bopd Inlet Water Depth 765m Storage Capacity 43, bbls Production Storage 15, bopd, 176 mmscfd 1,6, bbls Delivered to client in June 218 Charter started in June 218 4
FY218 : Highlights New Orders Revenue 8 7.9 4 378.5 295.5 229.9 221.9 4 395.7 2 191.1 253.6 188.7 92.7 214 215 216 217 218 214 215 216 217 218 Awarded a charter contract from ENI Revenue from both EPCI and O&M increased 5
FY218 : Highlights Operating Profit Ordinary Profit Profit Attributable to Owners of Parent Dividends per Share 2 15 18. 11.4 14.9 3 2 18.3 29.4 24.3 28.7 25 2 15 21. 19.4 21.8 Yen 6 4 37.5 35. 32.5 5. 52.5 1 5 8.5 5. 1 12.8 1 5 5.4 5.8 2 214 215 216 217 218 214 215 216 217 218 ROE % Equity 2. 15 18.7 15. 15. 15.1 1 1. 5 6.5 5.9 5. 214 215 216 217 218 214 215 216 217 218 Profit attribute to owners of parent hit a record high of 21.8billion JPY Equity increased to 152.6 billion JPY Proposed annual dividends of 52.5 per share including 5 th anniversary commemorative dividend of 1. per share Dividend has been increasing every year for 14 years. 214 215 216 217 218 (E) 6
FY218:EPC(I) FSO Ailsa FPSO Cidade de Campos dos Goytacazes MV29 FPSO Carioca MV3 FPSO Guanabara MV31 Eni Mexico Area 1 FPSO Client Maersk Petrobras Petrobras Petrobras Eni Contract EPC EPCI + Time Charter (2 years) EPCI + Time Charter (21 years) EPCI + Time Charter (22 years) EPCI + Charter (15 years + 5 one-year extension options) Delivery (Planned) June, 218 June, 218 221 221 221 Field Culzean Tartaruga Verde & Tartaruga Mestiça Sépia Mero Area 1 Location UK Brazil Brazil Brazil Mexico Water Depth 9 m 765 m 2,2 m 2,1 m 32 m Storage/ Production 43, bbls 25, bopd inlet 1,6, bbls 15, bopd 176 mmscfd 1,4, bbls 18, bopd 212 mmscfd 1,4, bbls 18, bopd 424 mmscfd 9, bbls 9,bopd 75 mmscfd Progress Order received in 4Q 218 7
EPC(I) / Charter / O&M Period As of December 218 EPC(I) period Time Charter fixed period Time Charter option period O&M period 23 228 226 224 222 22 218 216 214 212 21 28 26 24 1 TBD FPSO Area 1 Mexico MV34 Eni 15y 2 2.1 FPSO Guanabara MV31 Petrobras 22y 3 2.1 FPSO Carioca MV3 Petrobras 1 2.1 FPSO Cidade de Campos dos Goytacazes MV29 Petrobras 2y 21y 2 2.1 FPSO Prof. John Evans Atta Mills Tullow 1y 3 2.1 FPSO Cidade de Caraguatatuba MV27 Petrobras 2y 4 2.1 FPSO Cidade de Itaguai MV26 Petrobras 2y 5 29.4 FPSO Cidade de Mangaratiba MV24 Petrobras 2y 6 34. FPSO Cidade de Sao Paulo MV23 Petrobras 2y 7 42.5 FPSO Cidade de Angra dos Reis MV22 Petrobras 15y 8 5. FPSO Cidade de Santos MV2 Petrobras 12y 9 45. FPSO Cidade de Niteroi MV18 Petrobras 9y 6y 1 65. FSO Rang Dong MV17 JVPC 9y 7.5y 11 4.6 FSO Cidade de Macae MV15 Petrobras 2y 12 4.6 FPSO Cidade do Rio de Janeiro MV14 Petrobras 8y 13 42. FSO Rong Doi MV12 KNOC 7y 14 5. FPSO Baobab Ivoirien MV1 CNR 1y 5y - 6. FPSO MODEC Venture 11 standby 5y - 4. FPSO Stybarrow Venture MV16 standby 7y+ 1 FPSO Raroa OMV 15y 2 FPSO Kwame Nkrumah MV21 Tullow 5y 1y 3 FPSO Pyrenees Venture BHPB 15y 4 FPSO Fluminense Shell 17.5y Owned by MODEC group companies (%) Affiliates accounted for by the equity method Consolidated subsidiary 8
Highlight Market Review & Outlook Financial Results
Leased FPSOs (Share by Number of Leased FPSO)) As of July, 216 As of December, 218 MODEC, 13, Own Lease 15% Own Lease 17 55% 85 44% 19 56% 86 44% MODEC, 14, 19% No. of leased FPSOs 2 On order In service 2 No.of leased FPSOs 2 On order In service 22 1 13 13 13 1 8 4 2 2 1 14 14 12 9 6 4 3 2 MODEC Others MODEC Other 1 Source: Prepared by MODEC based on Floating Production Systems Quarterly Report - 216 Q3 Report (EMA) Source: Prepared by MODEC based on 219 Q1 FPS Outlook Report (EMA)
Leased FPSOs (Share by Oil Production Capacity)) As of July, 216 As of December, 218 MODEC 1,285 Kbpd 22% MODEC 1,65 Kbpd 25% Thousand bpd 1,8 On order Inservice Thousand bpd 1,715 1,8 1,65 1,435 1,285 1,2 6 786 574 369 171 17 161 835 1,2 6 711 549 299 185 2 161 921 MODEC Other MODEC Other 11 Source: Prepared by MODEC based on Floating Production Systems Quarterly Report - 216 Q3 Report (EMA) Source: Prepared by MODEC based on 219 Q1 FPS Outlook Report (EMA)
Market View Oil & Natural Gas Prices (WTI/Henry Hub) FPSO Awards (Historical + Forecast) USD/bbl 15 1 USD/Million BTU 15 1 No of FPSO awards 3 Lease Lease (forecast) Speculative Turnkey Turnkey (forecast) Petrobras serial FPSOs 5 2 25 21 215 Source: EIA 5 25 2 Mtoe Demand by Energy Type 15 5, 4, Oil Gas Coal 1 3, 2, 1, Bioenergy Other renewables Nuclear Hydro 199 2 21 22 23 24 Source: World Energy Outlook 212 & 218 - New Policy Scenario (IEA) 5 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219(F) 22(F) Source: Fearnley Offshore partially adjusted by MODEC. 12
FY219 : Outlook Revenue Operating Profit Ordinary Profit Profit Attributable to Owners of Parent 4 295.5 35. 2 18. 15 14.9 4 29.4 3 28.7 25 21.8 21. 2 19.4 229.9 221.9 11.4 24.3 15 2 191.1 1 8. 2 12.8 18. 1 12. 5 5. 1 5 5.8 215 216 217 218 219 215 216 217 218 219 215 216 217 218 219 215 216 217 218 219 Revenue will increase to over 35 billion JPY mainly due to the increase of revenue from EPCI Assumed exchange rate for FY219: 11 yen/usd 13
Highlight Market Review & Outlook Financial Results
Profit & Loss 217 218 Variance Million JPY Revenue 191,182 221,99 3,727 Gross Profit 24,84 26,557 1,753 Selling, General and Administrative Ecpenses 13,356 11,628 (1,728) Operating Income 11,448 14,928 3,48 Other Income (A) 15,77 16,291 521 Other Expenses (B) 2,895 2,44 (455) Total Other Income/Expenses (C=A-B) 12,875 13,851 976 Gross profit increased by 1.8 billion yen mainly due to increase of EPCI revenue and improvement of profitability of O&M services Operating profit increased by 3.5 billion yen due to increased gross profit and reduction in SG&A (Equity in Earnings of Affiliates and Unconsolidated Subsidiaries included in C) 9,686 9,841 155 (Exchange gain/loss in C) (1,321) (1,38) 283 Ordinary Profit 24,322 28,779 4,457 Extraordinary Profit 741 (741) Extraordinary Loss Income before Income Taxes and Noncontrolling Interests 25,64 28,779 3,715 Profit Attributable to Owners of Parent 19,454 21,891 2,437 Exchange Rate (USD) 113. 111.2 ( 1.98) 15
New Orders / Revenue / Order Backlogs New Orders 1,2 8 7.9 Revenue EPC(I) period Mero Sépia FSO Ailsa MV29 Stampede MV27 MV25 MV26 MV24 214 215 216 217 218 219 987.9 761.6 648.9 Order Backlogs 1,144.4 1,87.6 Order backlogs for MODEC Group s share in the Lease, Charter and O&M services of the affiliates accounted for by the equity method 73.8 636 494.7 569.4 534.5 4 395.7 188.7 253.6 378.5 295.5 229.9 191.1 221.9 92.7 214 215 216 217 218 214 215 216 217 218 214 215 216 217 218 214 215 216 217 218 16
Operating Income/ Equity in Earnings of Affiliates Operating Profit (as if consolidating affiliates basis) Equity in Earnings of Affiliates 4 A A + B A + B + C A : Consolidated Operating Profit B : Operating Profit (equity method portion) C : Influence of Deferred/Realized Profits 4.3 39.1 38.4 Million USD 1 MV27 MV25 MV29 35.6 33.1 MV26 82.5 85.7 88.6 3 28.6 27.4 29.7 29.3 MV24 69.2 24.3 55.5 2 18. 5 14.9 11.4 1 8.5 5. 214 215 216 217 218 214 215 216 217 218 17
Ordinary Profit Influence of Unrealized Profits Ordinary Profit (as if consolidating affiliates basis Deferred Realized Balance 214 215 216 217 218 A A + B + C A : Consolidated Ordinary Profit B : Ordinary Profit (equity method portion) C : Influence of Deferred/Realized Profits 2 16.2 18.5 17.4 4 15 1 5 3.3 5.8 9. 9.3 11.1 8. 5.8 3 2 18.3 24.7 2.5 31.5 29.4 24.3 21.7 28.7 25.3 12.8 (5) -3. -2.7 1 (1) -7.6-8.2-7.9 214 215 216 217 218 18
Balance Sheet 217 218 Variance Million JPY Cash and Deposits 31,38 51,215 19,835 Short-term Loans Receivable 46,282 43,21-3,261 Total Current Assets 198,35 211,734 13,699 Property and Equipment 6,863 2,543-4,32 Intangible Assets 7,446 9,26 1,814 Investments and Other Assets 18,819 119,86 1,987 Total Fixed Assets 123,129 131,611 8,482 Total Assets 321,165 343,345 22,18 Cash and deposits increased due to the temporary retention of construction loan repayment from SPC Short-tem loans receivable decreased due to collection of loans receivable from SPCs Property and equipment decreased due to the sale of tanker to SPC for conversion Investments and other assets increased due to investment to MV29 217 218 Variance Accounts Payable - trade 8,335 97,68 17,345 Short-term Loans Payable 14,467 6,142-8,325 Total Current Liabilities 128,581 144,6 15,479 Long-term Loans Payable 31,586 24,889-6,697 Total Long-term Liabilities 44,197 34,47-9,727 Total Liabilities 172,778 178,531 5,753 Total Shareholders Equity 135,468 154,446 18,978 Total Accumulated Other Comprehensive Income 1,32-1,781-2,813 Minority Interests in Consolidated Subsidiaries 11,885 12,148 263 Total Net Assets 148,387 164,814 16,427 Total Liabilities, Net Assets 321,165 343,345 22,18 Accounts payable increased in line with EPC(I) progress Short-term loans payable decreased due to the repayment of loans for working capital Long-term loans payable decreased due to scheduled repayment Foreign currency translation adjustments decreased due to yen appreciation 19
Key Financial Indicators EBITDA Interest-Bearing Debt 6 43.9 4 7.7 2 EBITDA(after adjustment*) EBITDA Instant Coverage Ratio 57.8 53.3 53.4 47.1 8.2 7.2 7.5 7. X times 12. 1. 8. 6. 4. 222.7 2 5.1 1 Total interest-bearing debt(after adjustment*) Total interest-bearing debt/ebitda 22.8 166.1 161.6 4.3 2.9 3. 95.6 1.8 X times 5.5 4. 2.5 2. 214 215 216 217 218 214 215 216 217 218 *Adjustment: Adding MODEC group s share in affiliates accounted for by the equity method ROE ROA Equity Ratio 1. % 2. 16. 12. 8. 6.5 5.9 18.7 15. 15.1 % 7. 5. 3. 1.9 1.7 6.1 5.9 6.6 % Equity 5. 4. 3. 27.8 28.7 36.9 42.5 44.5 15 1 5 4. 214 215 216 217 218 1. 214 215 216 217 218 2. 214 215 216 217 218 2
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