Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy. Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
2015 Half-Year Results
Disclaimer – Important Notice
This presentation has been prepared by APR Energy plc (the
“
Company
”) and no-one else. This presentation is communicated solely to
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This presentation does not constitute or form part of any offer or invitation to sell, issue, purchase or subscribe for (or any solicitation of
any offer to purchase or subscribe for) any shares in the Company in any jurisdiction. This presentation is not a prospectus. No
investment decision in relation to the Company should be taken in reliance on this presentation. Recipients of this presentation are not to
construe its contents as investment, legal or tax advice. Recipients of this presentation should also read in full (
inter alia
) the text of the
Company's announcement
of 26 August 2015 entitled “2015 Half-Year Results.”
Nothing in this document is or should be relied on as a promise or representation to the future. This document may include certain
statements, estimates and projections provided by the Company in relation to the Company's anticipated future performance. Any such
statements, estimates and projections are based on various assumptions made by the Company concerning anticipated results which
may or may not prove to be correct. No representations or warranties are made by any person as to the accuracy of such statements,
estimates or projections.
The Company's shares have not been and will not be registered under the US Securities Act. The Company's shares have not been
approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United
States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed comment upon or endorsed
the merit of the Company's shares or the accuracy or the adequacy of this document. Any representation to the contrary is a criminal
offence in the United States.
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
•
Highlights
•
Operating Review
•
Financial Highlights
•
Second-Half Strategic Focus
•
Appendix
Agenda
2015 First-Half Summary
• Revenue of $122.2 million, off 52% vs. H1 2014
• Adjusted EBITDA of $48.3 million vs. $141.7 million in H1 2014
• New projects in Egypt, Botswana; 73MW of contract expansions
• 762MW of renewals, including Uruguay
• Majority of assets successfully removed from Libya; demobilisation
more expensive than anticipated
• $19.1 million in receivables collected from Libya and Yemen, partially
offset by provision for receivables for Angola of $7.0 million
• Impairment of assets in Yemen of $24.2 million; post-period access
to sites will result in re-evaluation of impairment
• Negotiations with banking group in process
• Delays in pipeline pushing potential projects into 2016
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Libya Demobilisation
•
Tremendous effort by
operations and security teams
o Removal of all DPMs and majority
of gas turbines and BOP
o Redeployment of units to
Botswana/Senegal
•
Cost overrun due to
security/logistics challenges
•
Focus on recovery of
remaining items
o Expected completion in Q3
o Insurance remains intact
Majority
of assets successfully shipped out of country
Yemen Impairment
•
Q2 impairment of $24.2 million direct result of
inability to control assets at the half year
•
Assets are insured
•
Subsequent to half year
o Recovery of all outstanding receivables of $8.4 million
o Access to the operational sites has been achieved
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy. Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Operating Review
Laurence Anderson
Operational KPIs
99.6%
99.9%
99.9%
H1 2014
FY 2014
H1 2015
Contracted Availability
5%
5%
5%
59%
58%
59%
37%
38%
36%
H1 2014
FY 2014
H1 2015
Fleet Mix
Gas Power Modules
Mobile Turbines
Diesel Power Modules
77%
72%
52%
H1 2014
FY 2014
H1 2015
Avg Contracted Utilisation
2,194
2,108
2,058
H1 2014
FY 2014
H1 2015
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
New Wins
•
3-turbine deal (75MW ISO
capacity)
•
$30m contract
•
12-month initial term
•
Industrial customer
•
Commissioning by Q1 2016
110MW in Egypt and Botswana; 73MW of expanded capacity
9
Egypt
Botswana
•
35MW | Diesel power modules
•
Leverages fleet demobilised
from Libya
•
2-year term
•
Serving national utility
Continued Customer Loyalty
835MW total contract extensions and expansions in H1 2015
Contract
Extension
Expansion
Argentina
75
Indonesia
130
5
Iraq
145
Mali
40
Myanmar
20
Angola (MB, RP)
80
Senegal
26
48
Uruguay
250*
Guatemala
16
TOTAL
762
73
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Market Dynamics
•
Opportunities in all regions
o Customer demand for both turbine and recip technologies
o Strongest pipeline growth in Africa, South America and industrial
segments
o Increased customer interest to monetise natural gas resources
•
Challenges
o Contracts are taking significantly longer to develop and sign
o Economic conditions impacting customer decision-making
- Oil prices
- Foreign exchange
- Government instability
- Emerging-market debt
Financial Highlights
Lee Munro
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Financial Highlights
The Group uses adjusted financial information in managing the business and evaluating the Group’s underlying performance. The Group adjusts for certain items
including amortisation of intangibles, Goodwill impairments, founder securities revaluation movements, integration/acquisition costs, and other one-time costs.
13
$ in millions
$155.0
$87.2
$254.2
$122.2
H1 2012
H1 2013
H1 2014
H1 2015
Revenue
$46.8
$1.1
$52.0
$(40.3)
H1 2012
H1 2013
H1 2014
H1 2015
Adjusted Net Income
$96.1
$43.7
$141.7
$48.3
H1 2012
H1 2013
H1 2014
H1 2015
Adjusted EBITDA
$70.9
$40.3
$143.6
$18.5
H1 2012
H1 2013
H1 2014
H1 2015
Net Operating Cash Flow
Revenue Bridge
$ in millions
$254.2
$122.2
$7.2
$1.1
$138.1
H1 2014 Revenue
New Growth
Change in Existing
Contracts
Roll Off
H1 2015 Revenue
•
Australia
•
Libya
•
Bangladesh
•
Botswana
•
Martinique
•
Yemen
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Cash Flow, Financing and Investing
Sources and uses of funds
$ in millions
$ in millions
15
Net Operating Cash Flow
• Net interest paid: $10.0m (H1 2014:
$12.2m)
• Cash tax paid: $11.9m (H1 2014: $5.9m)
• Working Capital change: $(1.7m) (H1 2014:
$22.6m)
Net Debt Movement
• Cash Flow from investing of $69.9m
o PP&E Additions: $21.2m
o Maintenance: $7.6m
o Install Costs: $1.0m
o GE Turbine Payment: $40.1m
• Debt issuance costs of $4.4m related to
H1 2015 facility amendment
70.9
40.3
143.6
18.5
H1 2012
H1 2013
H1 2014
H1 2015
Net Operating Cash Flow
546.1
18.5
69.9
4.4
601.9
YE 2014 Net
Debt
Cash from
Operations
Cash Flow from
Investing
Debt Issuance
Costs
H1 2015 Net
Debt
Emphasis on Cash & Capital Controls
•
Continued focus on collection of receivables
o $10.7 million received from Libya, with ongoing effort to secure
outstanding amount
o $8.4 million received from Yemen, reflecting payment in full
o Payments offset by Angola provision of $7.0 million
•
Driving down supply chain costs
o Better terms and conditions
o Cost avoidance
•
Actively managing capex and SG&A spend
o $20 million reduction in 2015 maintenance expenditures vs. plan,
reflecting lower utilisation
o No additional new fleet capex in 2015
o $15 million in annualised SG&A reductions
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Banking Discussions
*Adjusted EBITDA: EBITDA added back for stock compensation charge, Uruguay asset sale, and provision for Libya receivables
Actively working to amend current loan facilities
• Total Leverage Ratio:
o
Net Debt/Adjusted EBITDA*
o
Elevated in Q1’15 through Q2’16
with max of 4.75x in Q2-Q3’15
• Fixed Charge Coverage Ratio:
o
(Adjusted EBITDA* –
Mob/Demob/Maint – Taxes Paid) /
(Interest Expense + Dividends +
Debt Amortisation)
o
Minimum 1.2:1
• LIBOR Spread:
o
LIBOR plus 2.25% - 3.75%
dependent upon the total leverage
ratio
Existing facility key terms
17
Breach currently anticipated at Q3 2015
testing date (30 Sept 2015) and at
subsequent testing dates, in the absence
of amendment to the terms of the facilities
Advisors actively engaged with company
pursuing potential solutions
Amendment discussions ongoing with
banking syndicate with a view to allowing
the group to avoid any breach or return
the group to compliance and for securing
the necessary amendments
Strategic Focus for H2
Laurence Anderson
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Strategic Focus H2
•
Relentless focus on business development execution
o Improved opportunity management for greater visibility
o Flattened organisation; streamlined process for faster decision-making
o Closer coordination with GE on pipeline opportunities
o Continued focus on project extensions, expansions
•
Increase flexibility around size and term of contracts
•
Drive increased utilisation and operational efficiencies;
lever improvements made in global operating platforms
•
Achieve flexible long-term capital structure
Position business for a strong 2016
Summary
•
Intensified focus on business development in key regions
•
New contracts and expansions in Egypt, Botswana, Indonesia,
Myanmar, Senegal
•
762MW of contract extensions, including 250MW in Uruguay
•
Majority of assets removed from Libya, with some assets
already deployed to new projects; collection of past dues
•
Post-period positive progress in Yemen
•
Progressing on banking negotiations
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy. Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Thank you.
Questions?
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
Summary Statement of Comprehensive Income
H1
Reported 2015
(Unaudited)
H1
Reported 2014
(Unaudited)
H1
Adjusted 2015
(Unaudited)
H1
Adjusted 2014
(Unaudited)
$m (unless otherwise stated)
Revenue
122.2
254.2
122.2
254.2
Cost of sales
(151.3)
(160.9)
(127.1)
(160.9)
Amortisation of intangible assets
-
(17.2)
-
-Gross profit
(29.1)
76.1
(4.9)
93.3
Doubtful accounts expense
6.9
-
6.9
-SG&A expenses
(23.0)
(21.4)
(23.0)
(21.4)
Operating profit
(45.2)
54.7
(21.0)
71.9
GE acquisition related costs
-
(2.2)
-
-Founder securities revaluation
-
17.5
-
-Foreign exchange (loss)/gain
0.3
(0.2)
0.3
(0.2)
Finance income
1.0
0.7
1.0
0.7
Finance costs
(14.5)
(16.2)
(14.5)
(13.3)
Profit/(loss) before taxation
(58.4)
54.3
(34.2)
59.1
Taxation
(6.1)
(7.1)
(6.1)
(7.1)
Profit /(loss) for the year
(64.5)
47.2
(40.3)
52.0
Summary Statement of Financial Position
30-June
31-Dec
30-Jun
$ millions
2015
2014
2014
Goodwill
-
-
622.6
Intangible assets
-
-
53.1
Fixed assets
1,072.6
1,139.3
1,289.6
Other non-current assets
3.4
4.0
12.8
Inventories
78.5
79.5
67.9
Trade and other receivables
122.1
127.4
144.3
Cash and cash equivalents
15.1
118.9
52.0
Other current assets
6.7
4.0
11.0
Total assets
1,298.4
1,473.1
2,253.3
Trade and other payables
68.0
111.1
159.4
Decommissioning provisions
37.0
47.0
56.6
Deferred revenue
4.7
5.7
18.2
Borrowings
603.1
655.5
563.6
Other liabilities
16.6
18.1
18.9
Total liabilities
729.4
837.4
816.7
Equity
569.0
635.7
1,436.6
Copyright © 2015 APR Energy. All Rights Reserved. APR Energy, its logo, and “Powering Your Progress” are trademarks of APR Energy.
