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Boardroom Lunch Presentation/webinar today: EWC.ASX - solving LNG access constraints in Asia

Posted by Justin Rosenberg on 15-Mar-2018 01:20:05
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We're pleased to invite you to a boardroom lunch presentation & webinar on Thursday 15th at 12.30pm at our office: Gleneagle, Level 27, 25 Bligh St, Sydney. Please click on following button to register your interest in either attending in person or via webinar:
 
Register your interest
 
EWC are conducting a non-deal roadshow. They have been below the radar since they first raised over $250m pre-2009, but they have been quietly progressing their projects to near completion status, despite having had to deal with very some strong stock market headwinds and negative publicity.  You will see below that they have, without market support, built a sizable and arguably undervalued, infrastructure network in SE Asia, which is significantly de-risked:
  • Sengkang Power Plant (Indonesia)
    • Fully commissioned and operating 315 MW in South Sulawesi
    • Capacity has more than doubled under current management
    • Gas sourced from EWC owned field
    • Power sold into grid under PPA which is expires in 2022. (Currently being re-negotiated at invitation of Regulator, application will be submitted in June-18)
  • Sengkang Gas Field
    • 100% owned producing field
    • 2P reserve of 203 BCF (estimates over 7 TCF gas in place)
      • Sufficient gas in reserve to meet power and LNG requirements
    • PSC expires in 2022.  (Currently being re-negotiated at invitation of Regulator)
  • Pagbilao Power Plant (Philippines)
    • 650 MW Combined cycle power plant coming on line in phases commencing Q3-18
    • Final key piece to commissioning was granting of a site for substation and approvals securing right of way to build, operate and maintain transmission lines to connect to grid (announcement Dec-17)
    • In total EWC can connect, via two lines, 800 MW into the
    • Gas will be sourced from adjacent Terminal either from own sources or spot market (see below)
    • Sales will be into spot market initially
  • LNG Hub (Philippines)
    • In final commissioning: Will service EWC adjacent power plant but long term vision is to create a market for small scale seaborne LNG in the Philippines
  • Sengkang LNG (Indonesia)
    • Comprises 4 modular 500,000 tpa LNG plants
    • “80% complete”
    • Gas sourced from EWC’s field above
    • EWC has a Permit to export LNG, subject to meeting Indonesian gas requirements. (i.e. Potential source for Philippines LNG terminal and Power plant above)
    • Construction continuing modestly whilst negotiations with regulator regarding off take and sale price of gas to LNG plant advance.
In terms of its financial performance:
  • 2017 EBIT US$51.2 million
This has increased from US$31.2m in 2013 primarily due to building and commissioning additional power in Indonesia. (an area in particular where they performed)
  • EBITDA of US$91m
    • 1H FY18 EBITDA (US$45m) down compared to prior year by ~US$3m because of decreased gas production which also effects power production. Compressor and new wells expected return flow rates to previous levels.
 
Valuation:
  • Net Debt of US$651m of which US$432.5m is owed to Related Parties (i.e shareholder funds used to continue construction whilst capital markets “closed”)
    • Above is calculated after post balance sheet date conversion of US$24m of bonds at 50c (i.e. a premium to market, and early expiry 2019) by EWC Chairman.  (announced Nov-17)
    • Net Debt to Book Equity 0.97
  • Market Cap: AUS$520m (US$405m)
  • EV of US$1.06 bn
    • Book Value of Projects (FY17 PPE) of US$1.3bn of which US$1.0bn is categorised as “Under Construction” (at cost)
    • EWC’s estimate of Projects’ valuation at completion/ in production: US$4.0bn
Please click here to see the investor presentation.
 
Hope to see you at the lunch!
 

Justin Rosenberg

Corporate Finance - Executive Director

Gleneagle Securities (Aust) Pty Limited

Level 27, 25 Bligh Street, Sydney NSW 2000

Mob: +61 414 450 154

Ph: +612 8277 6683 | Fax: +612 9475 0154

Email: justin.rosenberg@gleneagle.com.au

 
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Topics: Boardroom Presentation