Conference Philip Adkins (CEO) Cristijn Sarvaas (CFO) September 2008

Transcription

1 Pareto Oil & Offshore Conference 2008 Philip Adkins (CEO) Cristijn Sarvaas (CFO) September 2008

2 9/21/2008 2

3 Fairstar in brief Founded in 2005 to become a leading provider of high-end ocean transportation services for clients seeking reliable and safe transportation of their high-value cargoes Converting two modern barges to self-propelled semi-submersible vessels FJORD in operation since end March 2008 FJELL under conversion, which is expected to be completed within 2008 Operate in an industry with growing demand and a limited number of competitors due to the high barrier of entry Fully certified in-house ship management organisation based in Rotterdam Quoted on the Oslo Stock Exchange under the ticker FAIR 3

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7 Fairstar strategy Fairstar aims to become the preferred heavy transport partner for customers seeking to secure reliable ocean transportation services for their high-value cargoes Fairstar will build a sustainable competitive business by: Proactively building ongoing relationships by focusing on key client project transportation needs Capitalise on unique performance qualities of Fjord and Fjell Maintain and organisation of experienced crews and onshore in-house support Fairstar s biggest challenge is its two-vessel fleet 7

8 Fairstar share price Fairstar Share Price Since Introduction NOK We believe our share price is significantly undervalued due to: Conversion risk: Can the FJELL be successfully completed in Malta? Execution risk: Can Fairstar build a sustainable competitive business? 8

9 Conversion risk: managing yard risk 9

10 Execution risk: building a sustainable business Two modern vessels with unique capabilities Experienced organisation Experienced vessel crews and shore-based staff Fully certified ship management organisation 10

11 Execution risk: building a sustainable business Fairstar has demonstrated its ability to secured leading clients and projects Clients: Daewoo, Heerema Marine Contractors, KBR Utilisation: 2009 Fjord 87%; Fleet 54% Gross revenue: 2009 $43m; 2010 $19m T/C revenue: 2009 $32m; 2010 $14m (T/C dayrates over $80,000 per day) Confirmed Project Utilisation (% vessel utilisation) Confirmed Project Revenues (MUSD) Note: All project timing and T/C revenues are best estimates and subject to change as projects are executed 11

12 Business economics are solid Cash flow per vessel to equity holders (USDk) 1 16,4 12,5 8,8 26,3 Key assumptions: Time charter equivalent revenues: USD 80,000 per day per vessel Vessel utilisation: 80% Opex USD 10,500 and G&A USD 5,900 per vessel per day Interest rate cost of 7-8% on senior debt; NOK 150m bond Nibor + 6% Straight line depreciation over approx. 25 years Dutch tonnage tax close to 0% for at least 10 years T/C equivalent Opex/G&A Interest Loan repayment 2) Free cash flow to equity 1) Based on full year of operations of two vessels 2) Loan repayment excludes bond repayment USD 30m in October 2009 Break-even analysis Solid business case even at lower day rates and utilisation levels Opex/G&A and interest payments covered at a day rate of USD 29,000 At base case day rates the break-even utilisation is 40-45% 12

13 But cost variability must be managed Revenues are locked in during contract negotiations (often 2 years before the project starts) Costs are variable Rigorously manage variability in costs Focus on Gross margin impact Cover potential escalation of project-related costs (bunkers, canal transits, tugs, etc) in contracts Hedge foreign exchange exposure 13

14 Conclusion Is FHT a compelling investment? 14

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16 Contact details Fairstar Heavy Transport NV Postal address Visiting address P.O. Box 2225 Conradstraat CE Rotterdam 6th Floor, Suite E6.170 The Netherlands 3013 AP Rotterdam The Netherlands T +31 (0) F +31 (0) I E fairstar@fairstar.com Philip Adkins, CEO Cristijn du Marchie Sarvaas, CFO M +44 (779) M E philip.adkins@fairstar.com E cristijn.sarvaas@fairstar.com This material has been prepared by Fairstar Heavy Transport NV ( FHT"). This material is for distribution only under such circumstances as may be permitted by applicable law. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. It is published solely for informational purposes. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the materials. It should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed in this material are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of FHT as a result of using different assumptions and criteria. FHT is under no obligation to update or keep current the information contained herein. Neither FHT nor any of its affiliates, nor any of FHT s or any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this material Fairstar Heavy Transport NV. All rights reserved. Fairstar Heavy Transport NV specifically prohibits the redistribution of this material and accepts no liability whatsoever for the actions of third parties in this respect. 16