1. business and industrial

Analyst Forum Presentation - 2nd June 2014
0
Agenda
I. 
Introduction, Corporate Governance & Safety review:
Bode Makanjuola, CEO
II.  Financial Review
Samuel Ileoma, CFO
III.  Closing Remarks
Bode Makanjuola, CEO
IV.  Questions & Answers
1
Introduction
2
An Indigenous Marine & Aviation Logistics Service Provider
3
Board of Directors
Management Team
Mr. Adeniyi Makanjuola
Chief Operating Officer
Mrs. Joy Okebalama
GM, External Relations
Capt. Charles De’ Mannoury
Director, Operations
Mrs. Titilola Adigun
GM, Internal Audit
Mr. Robert Strating
Director, Safety & Quality
Mr. Tolu Osunsanya
GM, Finance
Mr. Kingsley Uwagbale
Director, Strategy & Planning
Corporate Governance & Safety Review
6
Corporate Governance Framework
Robust Corporate Governance & Adherence to Best
Practices
Audit Committee
§ 
§ 
■ 
§ 
Implemented KPMG Corporate Governance
framework recommendations
Chairman: Mr. Bashiru Bakare (Non-Exec. Director)
Mandated to examine the auditors report and make
recommendations thereon to the General Meeting
Meets once every quarter
Governance & Implementation Committee
■ 
■ 
Balanced Board of Execs & Non-Execs
Full compliance with SEC’s code of corporate
governance for public companies
BOARD COMMITEEES
§ 
§ 
§ 
Chairman: Chief Raymond Ihyembe (Independent Director)
Tasked with overseeing the Corporate Governance policies and
procedures of the Company
Meets once every quarter
Risk & Finance Committee
§ 
Chairman: Mr. Akin Kekere- Ekun (Non-Exec. Director)
Identify, outline and implement the Company’s key risks and
internal controls; design bespoke enterprise risk management
and regulatory compliance framework
§ 
Meets once every quarter
§ 
Safety Committee
§ 
■ 
Safeguards and Minority Protections
§ 
§ 
Chairman: Mr. Bashiru Bakare (Non-Exec. Director)
Oversight of the safety and quality policies, initiatives and
performance of the Company from a macro perspective
Meets once every quarter
7
Safety & operational performance
• 
Transitioned within 4 years from Intra City shuttle service operator and Ad-Hoc charterer to the leading
indigenous Oil & Gas support service operator in Nigeria.
• 
Secured two of the most prestigious Oil & Gas support contracts for Shell and Total. A clear indicator
for our Safety Performance and Operational Excellence.
• 
In 4years our owned fleet grew from 2 to 7 and staff strength increased to over 600 without major
incidents and accidents both on the ground and in the air.
NUMBER OF FLIGHT HOURS AND FLIGHTS PER YEAR
30000
25000
20000
Flight Hours
15000
Number of Flights
10000
5000
0
2008
2009
2010
2011
2012
2013
8
Safety & operational performance - contd
• 
Solid Safety Performance since inception of the Company.
• 
Zero Accidents and Zero Incidents despite rapid growth and challenging operational environment
• 
Implementation of modern proactive Safety Management System exceeding Regulatory and Client
requirements
• 
Our drive for safety and “aim for zero” in Nigeria or anywhere else in the Sub-Saharan region makes our
value proposition very attractive and socially responsible
FATAL ACCIDENT RATE PER MILLION FLIGHT HOURS
9
8
7
6
Industry Average
5
OGP Average
4
Comuter Average
Commercial Average
3
Caverton Average
2
1
-
0
2008
2009
2010
2011
-
Source: - IHST OGP ASC presentation 4 March 2013
- IAGC/OGP Joint HSE forum presentation 2 Nov 2010
2012
9
A Growing Diverse Portfolio of Operating &
Strategic Assets
Caverton Marine Vessels
Operating Assets"
LIV K:
§  Accommodates up to 42 personnel
§  Deadweight of 1380mt
§  Suitable for general offshore support services
§  Vessel is DP 1 and fitted with a FIFI Class 1
System
Caverton Helicopters – 22 Aircraft
8x
2x
Caverton has had an impressive track record in ownership and
management of vessel, which meets current major oil company standards
Anchor Handling Tug Supply Vessels (or AHTS) carry out operations for
positioning, maintaining and moving oil and gas platforms. They are
equipped with powerful engines and winches and can tow drilling rigs,
position and lift anchors, and deploy a range of equipment necessary for oil
production
2x
Platform Supply Vessels
(or PSV) take equipment and special products to offshore platforms. In
addition to a large deck area for the transport of all types of equipment,
including extra-large and non-standard dimension packages, they offer
sizable storage capacity
3x
7x
Facilities"
Caverton Helicopters
Lagos Hangar Facility
§  Located at Murtala
Muhammed International
Airport
§  1250sq meters
§  Offers specialized
maintenance and repair
Lagos Heliport, Victoria Island
§  Located at the centre of
business metropolis
§  Transit point for business &
offshore travellers
§  Only licensed heliport in Lagos
AgustaWestland AW139:
§  15 seater; Large passenger cabin
§  High speed
§  Powered by two pratt & whitney PT6C-67C
turboshaft engines
Bell Helicopters 412 EP:
§  11 seater
§  Twin turbine
§  Advanced technology design
§  For on-site and off-shore logistic services
DHC6-400 & DHC6-300 Twin Otter:
§  Twin engine
§  20-passenger STOL utility aircraft
§  150-300km/hr speed range
S-76C Sikorsky Series :
§  12 seater
§  Technologically advanced; Powerful engines
§  High level safety features
EC155 Eurocopter Helicopter & Dauphin N3:
§  5-ton twin engine
§  The EC155 is an enhanced version of the
Dauphin family
§  Low noise level
Port Harcourt Hangar
Facility
§  Located at NAF Base
Port Harcourt
§  1200sq meters
§  9 bay hangar with
workshops
10
Why the AgustaWestland AW-139 ?
Equipped with the 7 key safety enhancing features required by Shell, Total and other IOCs
1.  Late FAR 29 designs with glass cockpits
2. High fidelity flight simulators available
3. HUMS Vibration Monitoring
4. Flight Data Monitoring and Satellite tracking installed
6. Performance Class 1 available due to lightweight construction and strong engines
7. Enhanced Safety Features like Ground Proximity Warning and Traffic Collision Avoidance Systems
11
Caverton Strategic Logistics & Support Facilities
Lagos Hangar Facility
§  Located at Murtala Muhammed
International Airport
§  1250sq meters
§  Offers specialized maintenance and repair
Port Harcourt Hangar Facility
§  Located at NAF Base Port Harcourt
§  1250sq meters
§  Fully equipped 9 bay hangar
§  maintenance and repair service including
Avionics, blades, dynamic components
Lagos Heliport, Victoria Island
§  Located at the centre of business metropolis
§  Transit point for business travellers
§  Only licensed heliport in Lagos
§  Contemporary floating helideck and a
heliport with i-Fi facilities
Warri Hangar Facility
§  Modern hangar facility
§  Serves as a base for the company’s
upstream oil and gas operations
§  Offers specialized maintenance and repair
Caverton Integrated Services Facility (1)
§  Ultra modern Maintenance Repair and overhaul
facility
§  Will include an aviation training centre for pilots
and air crew
§  Currently under construction
Cameroon Hangar Facility
§  1250sq meters
§  Serves as a base for the company’s
upstream oil and gas operations
§  Offers specialized maintenance and repair
Best in-class strategically located facilities including a new simulation and training centre for pilots
1. Picture of a replica Maintenance Repair and Overhaul facility as CIS centre is still under construction
12
Financial Review
13
Historical Financial Performance
Revenue
EBITDA & EBITDA Margin
NGN BN
7.0
18.7
18.0
16.1
6.0
16.0
10.9
12.0
7.0
8.0
6.0
4.2
30%
3.0
5.4
2.0
4.0
2.4
25%
2.7
1.5
20%
15%
1.5
10%
1.0
2.0
0.0
5%
0.0
Net Income
EPS :
3.80
13.0
10A
CHL
12.0
11A
CML
1.80
12A
13A
40.6
DPS :
56.0
1,875
2,000
1,360
60.0
350
50.0
300
40.0
30.0
1,000
500
436
20.0
402
128
10.0
60
0
0.0
08A
09A
10A
Net Income (LHS)
11A
09A
10A
EBITDA (LHS)
11A
12A
13A
EBITDA Margin (RHS)
Dividends
2,500
1,500
0%
08A
12A
13A
EPS (RHS)
NGN Millions
09A
Kobo
08A
5.00
7.50
8.00
318
251
268
168
150
100
50
0
09A
10A
Dividends (LHS)
11A
Audited FS 2008 -2011 NGAAP,
2012 and 2013 IFRS
9.50
250
200
45%
35%
4.0
10.0
50%
40%
4.5
5.0
14.0
NGN Millions
6.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Kobo
NGN BN
20.0
12A
DPS (RHS)
14
An Service Provider
Financial review – FY 2013 vs 2012
N'000
2013
2012
Δ (N'000)
Δ (%)
Operating Revenue
18,662,906
16,132,083
2,530,823
16%
Operating Expenses
11,208,740
10,094,669
1,114,071
11%
G & A Expenses
2,213,519
2,352,304
(138,785)
-6%
Depreciation
1,559,576
983,107
576,469
59%
Loss on asset disposed
1,927,917
1,113
1,926,804
173118%
EBIT
1,753,154
2,700,890
(947,736)
-35%
Other Income
2,664,604
862,105
1,802,499
209%
Interest Expense-debts
1,258,904
1,400,140
141,236
-10%
Income Tax Expense
1,283,839
802,688
(481,151)
60%
Net Income
1,875,015
1,360,167
514,848
38%
EBITDA
5,977,334
4,546,102
1,431,232
31%
32%
28%
2,530,823
4%
EBITDA margin
Growth in revenue driven by"
-  Increased activity on IOCs Contracts 23% "
-  Vessel Charter 8% "
-  Offset by Ad-hoc Helicopter Charter (15%)"
"
Operating expense"
-  Crew salary up 9%, Vessel hire 3% reduced
by consumables 1%"
Disposal loss due Tanker Vessel sale at
best offer after several failed disposal
attempts "
15
Capitalisation & Financial Policy
31-Dec-13
N'000
Cash and Cash Equivalents
1,642,287
Secured Debts
11,465,425
Others
8,773,518
Total
20,238,943
Net debt
Cost of Debt
N‘Billions
Value
Tenor
% Interest
IOC Loans
8.8
2017
2.5%
Banks
10.8
2017
11.3%
Others
0.6
2017
11%
Weighted Cost
20.2
7.32%
18,596,656
Capital Structure - FY 14 to 17
Shareholders' equity
11,380,060
Total capitalisation
31,619,003
Net Debt / EBITDA
3.11x
EBITDA / Interest expense
4.75x
Net debt / Net capitalisation
62%
Total debt /Total capitalisation
64%
97% of our debts are linked to specific contracts
whose repayments are spread to terminate within
the contract tenor.
The near term capital structure will mirror FY13
position except as reduced by yearly debt
repayments and organic growth of shareholders’
equity.
Future acquisitions will be evaluated to
determine the optimal capital mix along with the
long term implication for our capital structure
16
COSG – Revenue Segmentation
Revenue by Business Segment
Revenue Contribution by Business Segment
%
2.2
2014E 2015E 2016E 2017E
0.9
Helicopters
83%
80%
70%
65%
Marine
14%
15%
20%
20%
Maintenance & Repair
3%
5%
8%
10%
Training
0%
0%
2%
5%
16.4
15.2
12A
13A
CHL
CML
Agency
3%
Ad-hoc
charter
2%
Maintenance
2%
IOC
contracts
96%
FY13 A - CHL Revenue segmentation
Contract
97%
FY13 A - CML Revenue
segmentation
AD HOC
CONTRACTS
Key Revenue Drivers – Helicopter segment
Revenue
=
=
Revenue
Fixed Monthly
Rate
40%
60%
Source : IOC contract documentation
Variable
( Hrs x Rate)
Variable Hourly Rate (non –contract based)
Helicopter Contract Structure
Variable
Hourly
Rate
+
Fixed
Monthly
Rate
Per Helicopter
Operating Fleet - Aircraft
Owned
Leased/ 3rd Party1
Total
AW 139
5
3
8
S 76++
0
3
3
EC155
0
6
6
Dauphine N3
0
1
1
Twin Otter DH400
1
0
2
Twin Otter DH300
1
0
Bell 412
0
2
2
Total
7
15
22
1Comments:
Except for the EC 155 and Bell 412 aircrafts which are directly under our management , the
others are leased and operated through 3rd party.
Vessel operations
Following a strategic decision to move out from the low-margin LPG tanker
operations, we disposed of certain assets to enable us to reposition for the
acquisition of supply vessels for the oil and gas industry.
An Service Provider
We currently have Joint Venture relationship with RK Offshore who operate
a pool of 22 Offshore Supply Vessels. A vessel (owned by CAVERTON ) in this
pool is on contract with an IOC
Vessel contracts are based on Fixed Daily Rate. We estimate EBIT margin to
be approximately 20% of revenue.
20
Dividend policy
Historically, we have consistently paid dividend since 2009. "
Unit Year kobo 2013 kobo 2012 EPS DPS 0.56 0.41 0.095 kobo 2011 0.02 0.08 kobo 2010 kobo 2009 0.12 0.075 0.13 0.05 Our dividend policy into the future will be a balance between
the requirement for organic growth and the need to reward our
loyal shareholders."
21
Closing remarks
22
Current contract status
2010
2011
2012
2013
2015
2014
2016
2017
2018
2019
2020
2021
Jun 2010
5 yr contract with a 2 yr extension option (which has already been exercised)"
Mar 2011
Helicopters"
3 year contract"
Early 2012
2 year option"
5 year contract"
2 year option"
Aug 2013
3 year contract "
Aug 2013
4 year contract
Ad-hoc
"
Ad-hoc Charter"
Marine"
3 month rolling contract"
23
Looking Forward: Contract opportunities - Marine "
TENDER STAGE COMMENCEMENT DATE TYPE OF VESSEL BASE OF OPERATIONS DURATION STATUS Technical Stage TBA 1 x Platform Supply Vessel Escravos TBA CM to undergo last stage of audit on 30/5/14, and be prequalified to receive ITT Technical Stage Q4, 2014 PlaQorm Supply Vessel(1) TBA 3+1 Ongoing Technical Stage Q3, 2014 PlaQorm Supply Vessel Lagos TBA ITT received 24
Contract opportunities - Helicopters
TENDER STAGE COMMENCEMENT DATE Technical Stage Q4, 2014 Technical Stage Q4, 2014 C o m m e r c i a l Stage Prequalifica^on Stage Technical Stage Technical Stage/
C o m m e r c i a l Proposal Technical Stage Technical Stage Not Specified(NS) Q1, 2015 (1st March) Q1, 2014 NS NS NS NO. OF HELICOPTERS S76D (3) BASE OF OPERATIONS L a g o s & P o r t Harcourt S76D (3) Ibeno (QIT) and Port Harcourt B412(3) & B407(7) Escravos, lagos,PH 7 Warri Helicopters(2) 7 Ghana Fixed wing(1) S76D (1) Nacase HELICOPTER (1) Brass Island & PH DURATION 5 TENDER STATUS Ongoing 5 Ongoing NS Ongoing NS Ongoing 5 NS Ongoing Submieed F i x e d W i n g ( 1 -­‐ Lagos private Jet) Helicopters (2/3) George Airport, South Africa 5 S u b m i e e d 22/3/2013 Ongoing 5 Evaluation of aircraft orders is based on certainty of converted opportunities.
Orders are placed as soon as this is determined along with the appropriate
financing mix (i.e debt and/or equity financing) for the asset acquisition.
25
Compelling proposition
We have shown capacity to maintain a high level of operational
safety which is key to our industry. "
Our corporate governance structure is now fully embedded
within the group."
Our revenue base is solid and has grown substantially over the
last 5 years."
"
Looking to the future, we plan a growth rate of between 13 and
17% on revenue year on year."
"
26
Thank You
Q&A
27