Presentation for Handelsbanken Markets May 23rd 2001

Transcription

1 Bergesen d.y. ASA Presentation for Handelsbanken Markets May 23rd 2001 CFO Garup Meidell

2 Company overview Bergesen d.y. ASA Gas transportation Gas Crude transportation Crude Dry bulk transportation Dry bulk solutions Offshore LPG Ammonia Petrochem. gases LNG 61 ships 3 newbuilds (1LPG/2LNG) Crude oil 18 VLCCs 2 Ore/oilers 2 newbuilds Iron ore 7 ships 1 newbuild 2 FPSOs 1 LPG FPSO 2 FPSOs under conversion

3 Company overview USD 1,5 bn market capitalisation USD 1,8 bn value adjusted equity USD 197 million t/c-revenues (2001 Q1) USD 104 million operating result (2001 Q1) 3,500 employees world-wide EBITDA per segment (2001 Q1) Fleet value per segment (2001 Q1) Offshore 6 % Dry bulk 4 % Offshore 8 % Dry bulk 6 % Crude oil 44 % Gas 46 % Crude oil 39 % Gas 47 %

4 Synergies in Bergesen T Tonnage T Capital Mature markets LPG T Relations T Competence TANK Growth markets LNG Secures access to new growth areas OFFSHORE

5 A decade of poor share performance... NOK Oslo Børs Total Index jan-90 mai-90 okt-90 feb-91 jul-91 des-91 apr-92 sep-92 jan-93 jun-93 nov-93 mar-94 aug-94 des-94 mai-95 okt-95 feb-96 jul-96 nov-96 apr-97 sep-97 jan-98 jun-98 okt-98 mar-99 aug-99 des-99 mai-00 sep-00 feb-01 Bergesen d.y. A-share Oslo Stock Exchange Total Index rebased Bergesen A

6 ...due to weak ROCE during % Return on Capital Employed (RoCE) Weighted Average Cost of Capital (WACC)

7 New strategy - per segment GASS TANK OFFSHORE BULK Main business area (VLGC, LGC) Growth opportunities in LNG Customer based solutions Further consolidation Independant operator Opportunistic approach Leading on generic low-cost solutions Strong cost control Conversion of both VLCCs and VLGCs Organic growth Protect and develop close customer relations Tailor-made ships / long-term contracts

8 Cost cutting New strategy - general new crewing policy outsourcing of technical management on some vessels Streamlining of balance sheet sale of non-core assets increase gearing through new investments Focus on shareholders value buy-back of shares increasing dividend

9 Gas transportation GAS TRANSPORTATION

10 The LPG market The LPG market is supply driven Poten & Partners estimates 2,0%, 6,8% and 3,2% p.a. Growth in LPG exports in 2001, 2002 and 2003 respectively: Million tons Middle East Asia Africa Europe USA Latin America Source: Poten & Partners Fleet growth for VLGC fleet in 2001, 2002 and 2003: 8,5%, 1,0% and 4,8% p.a. - before scrapping. Limited growth for LGC and MGC fleets.

11 VLGC fleet age profile The order book represents 11% of current VLGC fleet. 22% of the VLGC fleet above 25 years of age Increasingly difficult to operate vintage vessels commercially due to charterers hesitance.

12 Alternative trade for VLGC in naphtha To increase utilisation, the VLGCs can trade naphtha from Arabian Gulf to Japan/Korea VLGCs are swing-tonnage when large product carriers (LR) are fully employed New naphtha capacity has increased exports from the Emirates (excempted from OPEC quotas), but this trade is highly seasonal: LR product average spot earnings yr/yr (naphtha trade) USD/day ja n feb mar mar apr mai ju n jul aug sep okt nov des Limited fleet growth for LR product carrier should provide opportunites for continued VLGC employment in naphtha.

13 US based ammonia producers close capacity at home and imports ammonia due to high feedstock prices (natural gas) Higher imports of LPG (propane & butane) to USA because less LPG is being separated from the natural gas when prices are high High natural gas prices - positive for LPG des.98 mar.99 jun.99 sep.99 des.99 mar.00 jun.00 sep.00 des.00 mar.01 jun.01 sep.01 des.01 mar.02 jun.02 sep.02 des.02 mar.03 jun.03 sep.03 des.03 mar.04 USD/mmbtu NYMEX future prices indicates high expectations for natural gas prices the next 4 years Henry Hub historical spot Henry Hub Nymex future

14 LPG FPSO Future potential within floating production: Bergesen operates 1 LPG FPSO, Berge Troll: Flaring of gas prohibited in Nigeria as of 2008 Oil majors avoid flaring due to environmental reasons Gas injection is technically challening and expensive Bergesen has a suitable fleet of built VLGCs available

15 VLGC segment outlook Low growth in LPG volumes 2000 / 2001 out of the Middle East due to internal use of LPG in Saudi Arabia increasing volumes again from 2002 Increasingly difficult to operate vintage vessels due to charterers preference for younger vessels Alternative VLGC employment in naphtha High natural gas prices in the USA New trades and longer distances more long-haul LPG export from Africa to Asia Future potential within floating production Generally positive outlook, but large influx of new vessels over the next 12 monhts

16 LGC and MGC segments outlook Bergesen LGC pool-cooperation with Russian ammonia producers Strong Atlantic ammonia and LPG markets due to high US natural gas prices Benefits from consolidation (Bergesen and Exmar pools More difficult to operate vintage vessels commercially Bergesen has initiated fleet renewal Limited fleet growth for both LGC and MGC Favourable market outlook

17 LNG The energy of the future

18 Why invest in the LNG market? Significant internal know-how in gas transportation Owns two cbm LNG carriers (Century on 7 yr t/c in LNG, Havfru 2 years t/c in LNG) Natural gas is the energy of the future -> LNG a new growth market for Bergesen LNG market in structural changes Full utilisation of current LNG fleet High entry barriers (high unit price and quality operation and safety requirements) Good opportunity for value creation Bergesen has ordered 2 LNG carriers

19 Crude oil transportation

20 IMO effect on Bergesen s tanker fleet Year Age categori or earlier and and , 1979 and and later No Resulting age - 29 years 28/29 years 26/27 years 21/24/26 years Limited effect for Bergesen untill 2005 substantial cashflow expected from 1970/80-built VLCCs the coming years. In a normal tanker market the above vessels being phased out, would have been scrapped anyway.

21 Hitachi 4972 Hitachi 4971 Berge Sakura Berge Ariake Berge Fuji Berge Tokyo Berge Ichiban Berge Stadt Berge Stavanger Berge Sigval Berge Fjord Bergesen s tanker fleet Substantial fleet renewal has taken place: Berge Phoenix Berge Nisa Berge Enterprise Berge Pioneer Berge Banker Berge Ingerid Berge Bragd Only 4 VLCCs and 1 O/O will have earlier phase-out with new IMO regulations. Berge Phoenix will continue in dry bulk trade Berge Boss Berge Borg Berge Chief Berge Helene Berge Odel Lay-up in preparation for FPSO conversion Scrapping at 25 years Scrapping at 27,5 years

22 Bergesen s charter cover 62% spot exposure (including newbuildings) The rest on flexible charters: Period Rate Structure Berge Pioneer 06/01 M FC Berge Enterprise 02/02 FE - Berge Stadt 02/02 M PF Berge Stavanger 01/ M FC Berge Sigval 09/ FE - Berge Tokyo 01/02 M PF Berge Ichiban 02/02 M PF Berge Helene 03/01 F - Berge Fuji 07/ FE - Rate M = Market related rate F = Fixed rate E = Escalation clause Structure P = Profit split F = Floor C = Ceiling

23 Market outlook High tanker fleet utilisation Fleet growth may be higher than demand growth during 2001 and 2002 The Erika effect is strong Consolidation effects? Still low oil product stocks IMO effect as of : average spot earnings estimated around same levels as : possibly somewhat weaker than 2001, but still strong tanker earnings 2003: stronger market due to new IMO regulations

24 Bergesen Offshore The low cost operator in benign waters

25 Why West Africa? Enormous reserves Low cost region Benign waters

26 2. Project ExecutionDriver Harsh Benign How are we different? NorthSea Gulf of Mexico South America Asia & Australia Persian Gulf Low High 3. Cost Purpose-built, Engineering Driven Conversion, Shiprepair& Conversion Driven 4. FPSO Contractors 1. Environment Bergesen Offshore Fred. Olsen Production Nortrans Offshore Oceaneering Maersk SBM Bluewater Golar Nor/PGS Navion West Africa

27 Competitive edge Large fleet of tankers and gas carriers at hand Well experienced offshore managment team Cost-effective solutions - not engineering driven In-house technical and commercial expertise Competitive agreement in place with ABB Offshore Systems AS The first generic FPSO is producing (on time - at cost)!

28 Summary More focused strategy Focus on shareholders value Improved return on capital employed % Return on Capital Employed Weighted Average Cost of Capital

29 Summary More focused strategy Focus on shareholders value Improved return on capital employed Strong tanker market the next 2-3 years LPG exports likely to increase from 2002 Interesting opportunities in naphatha trade for VLGCs Competitive edge in West Africa Growth opportunites in LNG Still high discount to net asset values

30 Shareprice vs. NAV Still high discount to NAV Q1 Bergesen A (average) Net asset value (year end)

31 Broker recommendations Share price targets and estimates before 2001Q1 figures were released: Aksjekurs, A: 212 Aksjekurs, B: 200 Veiet kurs (A og B ): 208,6 USD/NOK: 9,07, Meglerhus Anbefaling X Dato siste analyse Kursmål, 6-12m Implisitt P/E 2002e EBIT 2001e EPS 2001e EBIT 2002e EPS 2002e Alfred Berg Ingen analyser etter at Axel Andersen gikk over til DnBs corporate avdeling - Henrik With vil ta over Carnegie Accumulate 21-mai , , ,0 Nordea Sec. Buy 16-mai , , ,2 DnB Markets Hold 10-apr , ,2 Fearnley Fonds Buy 10-apr , , ,6 First Securities Reduce 18-mai , , ,2 Fondsfinans Hold Q 16-mai , , ,2 Orkla Enskilda 1/Buy 21-mai , , ,3 Pareto Strong buy 18-mai , , ,4 UBS Warburg Long-term Buy Ny 01-mai , , ,6 Gjennomsnitt Buy 217 7, , ,1