QUARTERLY IR UPDATES 1 st Quarter 2019 Financial Results & Updates 25 th April 2019 1
Disclaimer This Presentation is not intended to form the basis of any investment decision with respect to Malaysia Marine and Heavy Engineering Holdings Berhad (MHB). Neither this presentation nor anything contained herein shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. No representation or warranty, express or implied, is or will be made by MHB in relation to, and no responsibility or liability is or will be accepted by MHB as to the accuracy and completeness of, the Information made available, and any liability therefore is expressly disclaimed. This Presentation may contain “forward -looking statements” . Forward-looking statements by their nature involve known and unknown risks, uncertainties and other factors that are in many cases beyond MHB’s control. Although MHB believes that the expectations of its management as reflected by such forward-looking statements are reasonable based on information currently available to it, no assurances can be given that such expectations will prove to have been correct. Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. In any event, these statements speak only as of their dates, and MHB undertakes no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. This Presentation and its contents are strictly confidential and must not be copied, reproduced, distributed, summarized, disclosed referred or passed on to others at any time without the prior written consent of MHB. Except for the yard facilities in the photographs, none of the vessels/structures belong to MHB. 2
Contents • Business Highlights • Projects • Financials • Shareholding Information • Key Focus Areas 3
Key Highlights FINANCIALS • Revenue of RM203.1 mil • Pre-tax loss of RM29.5 mil Heavy Engineering Unit (HEU) milestones: • Awarded Frame Agreement for EPC of fixed offshore structure works for PETRONAS for 6 years Marine Business Unit (MBU) milestones: • Awarded Master Service Agreement for Integrated Turnaround Main Mechanical & Maintenance Static from PETRONAS for 5 years • Completed repair & maintenance of 18 vessels • Secured 26 jobs 4
Contents • Business Highlights • Projects • Financials • Shareholding Information • Key Focus Areas 5
Progress at 49.4% as at March 2019 Bokor Phase 3 Re-Development CPP 6
Progress at 99.7% as at March 2019 Gumusut-Kakap Phase II Extension Subsea Manifold 7
Progress at 99.9% as at March 2019 RAPID Package 3 Area 2 8
Progress at 99.9% as at March 2019 RAPID Package 14 9
Progress at 15.5% as at March 2019 Pluto Water Handling Module 10
Progress at 47.2% as at March 2019 Tembikai NAG Offshore Wellhead Facilities 11
Notable Marine Repair Projects delivered in Q1 2019 LNG Carrier Velikiy Novgorod LNG Carrier Galicia Spirit Vessel owner: Sovcomflot Vessel owner: Teekay Shipping Glasgow Ltd Deadweight: 93,486 tonnage Deadweight: 79,166 tonnage Dry docking & repair (1 st special survey) Job scope: Dry docking & repair and ballast water treatment Job scope: system installation Delivery date: 1 March 2019 Delivery date: 15 March 2019 12
Notable Marine Repair Projects delivered in Q1 2019 (2/2) LNG Carrier Seri Amanah LNG Carrier Trinity Glory Vessel owner: Eaglestar Shipmanagement (L) Pte Ltd “K” Line LNG Shipping (UK) Ltd Vessel owner: Deadweight: 83.400 tonnage Deadweight: 79,605 tonnage Job scope: Dry docking & repair Job scope: Afloat repair Delivery date: 19 March 2019 Delivery date: 4 March 2019 13
Progress at 58.4% as at March 2019 Dry Dock 3 (DD3) 14
Contents • Business Highlights • Projects • Financials • Shareholding Information • Key Focus Areas 15
Financial Updates Income Statement, Sequential Quarter Income Statement (RM 'm) 1Q 2019 4Q 2018 Revenue 203.1 273.2 • Revenue Heavy Engineering 125.4 224.0 • HEU – Lower revenue from ongoing projects Marine 77.7 49.2 • MBU – Higher revenue due to increase in LNG dry docking activities Operating Loss (29.3) (29.2) Heavy Engineering (23.9) 1.7 Marine (7.5) (33.0) • Operating Others 2.1 2.1 • HEU – Increase in operating loss attributed to lesser Finance Cost (0.2) (0.9) close-out of completed projects in the current quarter • MBU – Decrease in operating loss contributed from the higher revenue as well as other cost plus works in the Share of Profit of JV - 3.8 current quarter Pretax Loss (29.5) (26.3) Taxation (0.3) 0.5 • Pre-tax loss • Increase in pre-tax loss attributed to the lower revenue Net Loss (29.8) (25.8) from HEU LPS (1.8) sen (1.6) sen Note : Due to rounding, numbers may not tally with the total 16
Financial Updates Income Statement, Year-on-Year Income Statement (RM 'm) 1Q 2019 1Q 2018 Revenue • Revenue 203.1 188.3 Heavy Engineering 125.4 111.3 • HEU – Higher revenue recognised from higher Marine 77.7 77.0 progress of ongoing projects • MBU – Revenue was marginally higher mainly due to revenue derived from LNG dry dockings that Operating Loss (29.3) (24.8) compensated the decrease in revenue for conversion Heavy Engineering (23.9) (12.8) works in the current quarter. Marine (7.5) (7.2) Others 2.1 (4.8) • Operating Finance Cost (0.2) - • HEU – Higher operating loss attributed to higher unabsorbed overheads as expected contract awards Share of Loss of JV - (0.5) have yet to materialise. • MBU – Operating loss comparable to the Pretax Loss (29.5) (25.3) corresponding quarter. Taxation (0.3) (0.3) • Share of results of JVs Net Loss (29.8) (25.6) • Nil as all JVs have turned dormant since Q4 2018 • Pre-tax loss LPS (1.8) sen (1.6) sen • Pre-tax loss due to the operating losses incurred Note : Segmental Revenue and Operating Profit is post inter-segment eliminations : Due to rounding, numbers may not tally with the total 17
Financial Updates Balance Sheet Balance Sheet (RM 'm) Mar 2019 Dec 2018 Non-Current Assets 1,982.2 1,905.6 Inventories 5.1 5.6 Receivables 676.1 648.0 • Total assets of RM3.2bil Cash 517.2 601.5 Higher Non-Current Assets – PPE, mainly due to Others 20.5 20.5 investment in DD3 Total Assets 3,201.1 3,181.2 Higher Non-Current Liabilities – Further drawdown of financing facility to finance the construction of Shareholders' Funds 2,376.9 2,407.1 DD3 Non-Controlling Interests (0.7) (0.3) Lower Cash – Investment in DD3 Long Term Loan 99.7 48.4 Long Term Lease Liabilities 18.8 - • NTA per share of RM1.49 Payables 705.4 726.0 Short Term Lease Liabilities 1.0 - Total Equity & Liabilities 3,201.1 3,181.2 NTA per share RM1.49 RM1.50 Note : Due to rounding, numbers may not tally with the total 18
Backlog & Order Intake MHB Backlog RM (‘000) 2,000 Backlog 1,500 1,000 1,273 500 1,023 864 785 629 CPP Bokor 0 Dec15 Dec16 Dec17 Dec18 Mar19 March 2019 RM864 mil New Order Intake RM (‘000) 2,000 Tembikai NAG Sepat Phase 2A 1,500 Besar F12 RAPID Woodside Pluto 1,000 CPOC Turret 1,145 500 652 Marine Business Unit 182 144 0 24 Dec15 Dec16 Dec17 Dec18 Mar19 * New Order Intake excludes Marine Business segment 19
Contents • Business Highlights • Projects • Financials • Shareholding Information • Key Focus Areas 20
Corporate Updates Shareholding Information & Share Price Share Price (RM) Technip 8.50% Technip 8.50% 2.00 1.80 Urusharta Urusharta 1.60 Jamaah 6.60% Jamaah 6.60% 0.86 1.40 14/03/2019 PNB & PNB Unit PNB & PNB Unit As of 1.20 As of Trust Funds 1.84% Trust Funds 1.90% 0.55 31 Dec 2018 31 Mar 2019 1.00 EPF 1.63% EPF 1.66% 31/12/2018 Lembaga Tabung Lembaga Tabung 0.80 Angkatan Tentera Angkatan Tentera 0.60 2.25% 2.25% 0.40 Other Malaysian Other Malaysian 0.20 Shareholders Shareholders 10.44% 10.15% 0.00 31-Dec-18 31-Jan-19 28-Feb-19 31-Mar-19 Foreign Foreign Investors 2.24% Investors 2.44% 21
Contents • Business Highlights • Projects • Financials • Shareholding Information • Key Focus Areas 22
Key Focus Areas • HEU tenders worth ~ RM6.3 billion have been submitted as of March 2019 • Strategy & Initiatives Continue pursuing existing business of Marine & Heavy Engineering, seizing available floaters conversion opportunities and expanding marine capacity through additional dry dock Develop new business, namely modular fabrication, offshore wind farm and plant turnaround work Deployed a number of in-house processes and explore strategic partnership and collaboration opportunities to promote competitive price offerings Implement productivity improvement initiative to achieve operational excellence Upskill manpower through capability development programmes 23
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