Höegh LNG - the FSRU provider
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Presentation at Pareto Oil & Offshore Conference September 12th, 2018
Sveinung J.S. Støhle
President & CEO
Forward looking statements
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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
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▪ Company background
▪ Recent milestones
▪ Market update
▪ Financial update
▪ Summary
HMLP common equity
HMLP-A preferred
HLNG NO
HLNG02 / HLNG03 bond loans
Höegh LNG is the leading owner and operator of FSRUs
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▪ Largest, most modern and most efficient Floating
Storage and Regasification Unit (FSRU) fleet in the
market
▪ Solid backlog with credible counterparts
▪ Actively pursuing backlog extension through on-
going tender processes
▪ Market cap / EV: USD 450m / USD 1.6bn
▪ Assets / equity ratio*: USD 2.1bn / 37%
▪ Revenues / EBITDA**: USD ~300m / USD ~160m
▪ Employees: 125 onshore / 525 offshore
8.7 yearsAvg. remaining contract length
USD 3.2 bnRevenue backlog
* 30 June 2018
** H1 2018 annualised
8 FSRUs in operation
2 FSRUs under construction
2 LNGCs in operation
The fleet at work - Global presence serving credible counterparts
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Cape Ann
PGN FSRU Lampung
Neptune
Independence
Höegh Grace
Höegh Giant
Arctic Princess
Arctic Lady
Höegh Gallant
FSRU intermediate tradingLNG carrierFSRU
Höegh
Esperanza
Recent milestones
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▪ Debt financing secured for FSRU #9
▪ Debt financing secured for FSRU #10Financing
Operational
Commercial
▪ Höegh Esperanza delivered with no LTIs
▪ 100% technical availability across the fleet in 2018
▪ Excellent HSEQ statistics - Zero LTIs last 12 months
▪ 3-year TC for Höegh Esperanza with CNOOC
▪ 15 month interim TCP for FSRU #9 with Naturgy
▪ Progress made on several tendering processes
Natural gas’ share of the global energy mix increasing, enabled by LNG
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▪ Transition to a lower carbon fuel
mix set to continue
▪ Natural gas expected to overtake
oil and coal as the primary fossil
fuel with an annual average
demand growth of 1.6%
▪ Expanding LNG supply, paired
with new regasification
infrastructure, is providing access
in-demand natural gas across
global markets
Source: BP Energy Outlook 2018
Primary energy consumption Shares of primary energy
Prospective LNG importers choosing FSRUs as the tool for accessing LNG markets
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0
100
200
300
400
500
600
700
800
900
2000 2005 2010 2015 2020 2025 2030 2035 2040
mtp
a
World LNG supply and demand
JKT Europe China
India Other Asia MENA
S America RoW LNG Capacity
Source: IHS Markit
FSRU opportunities in Asia
China: 1st FSRU in place, contemplating more
India: 1st FSRU to be installed Q4 2018,
several contemplated
Bangladesh: FSRU in place, contemplating more
Thailand: Contemplating FSRU
Pakistan: 2x FSRUs installed, contemplating more
Indonesia: 2x FSRUs installed
Vietnam: Contemplating FSRU
Myanmar: Contemplating FSRU
Other (Australia, Hong Kong, Sri Lanka,
Philippines): All contemplating FSRUs
Large number of market opportunities backed by diverse drivers of demand
Region Existing Under way Proposed
N America 1 2
S America 6 2 3
Europe 4 1 4
MENA 6 5
Sub-Sahara
Africa1 4
South Asia 4 3 5
Asia/Oceania 4 2 7
Sum 24 10 30 +
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Enabler
Security of supply
Seasonal demand
Back-up for hydro
Balance of trade
New gas-fired generation
Demand drivers
Increasing
supply of
attractively
priced LNG
Transportation
Replacement for coal and oil
Existing and potential FSRU contracts
Source: IHS Markit
FSRU supply well matched against the number of demand-side prospects
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▪ Recent newbuilding contracting:
BW LNGC-to-FSRU conversion
Maran Gas: 1x FSRU ordered, 1x
FSRU order cancelled (LNGC)
Botas 1x FSRU for own project
▪ Single-purpose FSRUs are
intended for a pre-determined
project, rather than participation in
competitive tenders8 8
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2
1
2
1
1
2
1
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2
4
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8
10
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Höegh LNG Excelerate Golar LNG BW Gas Other Single-purpose
Un
its
FSRU fleet and orderbook1 by owner/employment
Committed Available Committed NB Uncommitted NB
MOL
Exmar
Maran
Dynagas
Dynagas
Gazprom
Kol/Kal
SWAN
Java-1
OLT
Botas
Built EBITDA Charterer
USDm/yr
Höegh LNG Holdings
Arctic Princess* 2006 19** Equinor
Arctic Lady* 2006 19** Total
Independence 2014 47 KN
Höegh Giant 2017 Naturgy / Tendering
Höegh Esperanza 2018 CNOOC / Tendering
FSRU#9 2018 Naturgy / Tendering
FSRU#10 2019 Tendering
Höegh LNG Partners
Neptune 2009 33** Total
GDF Suez Cape Ann 2010 33** Total
PGN FSRU Lampung 2014 40 PGN
Höegh Gallant 2014 38 Egas
Höegh Grace 2016 42 SPEC
Long-term contract LNGC interim trading Extension option Under constructionFSRU and/or LNGC
intermediate charter
2019 2021 2023 2025 2027 2029 20312020 2022 2036 20382024 2026 2028 2030 2032 2033 2035 20372034
Modern fleet marketed in active tendering market
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* LNG carriers
** 100% basis, units are jointly owned
Delivery November 2018
Delivery May 2019
Höegh LNG is fully financed at attractive terms
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Höegh
Esperanza
FSRU #9 FSRU #10
Delivery April 2018 November 2018 May 2019
StructureExport credit and
commercial debt
Export credit and
commercial debt
Sale and
leaseback
Leverage (% of
delivered cost)65-75% 65% 70-80%
Amortisation
profile16-18 years 16 years 20 years
Tenor 12 / 5 years 12 / 5 years 12 years
Fixed interest
rate~4% ~5% ~6%
▪ With commitments received for
the financing of FSRU #10,
Höegh LNG is fully equity and
debt financed
▪ Lending group consisting of
leading international banks and
credit institutions
Solid balance sheet and robust liquidity situation
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FSRUs, 1,837
Other, 85
Cash & eq., 195
Interest-bearing debt, 1,003
Bonds, 314
Other, 17
Equity, 782
0
500
1,000
1,500
2,000
2,500
Assets Liabilities
US
Dm
Group balance sheet1 at 30 June 2018
1) Adjusted for mark-to-market of hedging reserves
Available liquidity at 30 June 2018 USDm
Cash, net of HMLP 117
Marketable securities 50
Revolving credit facility 45
Debt for FSRU #9 177
Debt for FSRU #10 180
Available liquidity 569
Increased leverage on Höegh Giant /
Höegh Esperanza / FSRU #1085
Targeted available liquidity 654
Outstanding capital expenditures, 30 June 380 - 400
Earnings growth – Higher contribution expected from Höegh Esperanza and Höegh Giant in H2 2018
▪ Q2 2018 earnings reflecting full
technical and commercial
uptime
▪ H2 2018 earnings expected to
reach higher
Höegh Giant on index-linked LNGC
contract producing higher revenues
Höegh Esperanza starting
FSRU/LNGC contract in June
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0
10
20
30
40
50
60
70
80
1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16 4q16 1q17 2q17 3q17 4q17 1q18 2q18
US
D m
illio
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Total income
-10
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10
20
30
40
50
1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16 4q16 1q17 2q17 3q17 4q17 1q18 2q18
US
D m
illio
n
EBITDA
Höegh LNG – Investment summary
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Order backlog of USD 3.2 Bn with credible counterparties producing stable cash flows
Consistent and solid operational performance across the global fleet
Strong financial platform with diversified financing sources
Rapid growth in the supply of LNG driving FSRU demand
FSRUs under construction marketed in positive tender market
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Questions?