MACQUARIE - WESTERN AUSTRALIA FORUM

2 December 2019

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IMPORTANT NOTICES & DISCLAIMER

This document contains general information about the activities of MMA Offshore Limited (MMA) current at the date of this presentation. It is information in a summary form only and does not contain all the information necessary to fully evaluate any transaction or investment. It should be considered in conjunction with MMA's other periodic and continuous disclosure announcements to the Australian Securities Exchange available at www.asx.com.au.

MMA makes no representation or warranty (express or implied) as to the accuracy, reliability or completeness of this document. MMA and its directors, officers, employees, advisors, agents and associates will have no liability for any statements, opinions, information or matters (express or implied) arising out of, or contained in or derived from, or for any omissions from this document, except liability under statute that cannot be excluded.

Not a prospectus: This document is not a prospectus or a product disclosure statement under the Corporations Act 2001 (Cth) and has not been lodged with the Australian Securities & Investments Commission.

Not investment advice: The information provided in this document is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account the recipient's investment objectives, financial circumstances or particular needs. Any investment decision should be made based solely upon appropriate due diligence. Recipients of this document are advised to consult their own professional advisers. An investment in any listed company, including MMA, is subject to significant risks of loss of income and capital.

Future performance: This document contains certain forward-looking statements. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan' and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of MMA, and its officers, employees, agents and associates, that may cause actual results to differ materially from those expressed or implied in such statements. Actual results, performance or outcomes may differ materially from any projections and forward-looking statements and the assumptions on which those assumptions are based. You should not place undue reliance on forward-looking statements and neither MMA nor any of its directors, officers, employees, advisors, agents or associates assumes any obligation to update such information.

Risks: An investment in MMA securities is subject to investment and other known and unknown risks, some of which are beyond the control of MMA and MMA's directors, officers, employees, advisors, agents or associates. MMA does not guarantee any particular rate of return or the performance of MMA nor does it guarantee the repayment of capital from MMA or any particular tax treatment.

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ABOUT MMA

MMA is one of the largest providers of marine services to the offshore Oil & Gas industry in the Asia Pacific region

Head office in Fremantle, Australia with international

Listed on the Australian Stock Exchange since 1999

headquarters in Singapore. Over 1,000 Employees.

Market Cap $166m. EV $366m

We differentiate ourselves through our operational excellence, technical expertise and our ability to deliver innovative and cost-effectivemarine solutions to our

clients.

MMA

OVERVIEW

Modern Fleet of 30+ high-specification vessels

supported by onshore facilities in Singapore and Batam.

BV of Vessel Assets $480m

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EXPANDED SERVICE OFFERING

Core OSV business with expanded service offering in Subsea and Project Logistics

  • Fleet of 30+ specialised offshore support vessels
  • Offtake Support, Supply Operations, Drilling Support, Construction Support, Seismic & Survey Support, Anchor Handling and Towing, Accommodation and Walk to Work Services
  • Delivery of complex marine projects
  • MMA currently services the subsea market predominantly as a vessel provider
  • Neptune acquisition will enable MMA to provide additional services to existing and new clients (FY19 Revenue A$84m)
  • Current Neptune service offering improved with access to MMA vessels
  • Project management of large marine spreads and complex marine logistics
  • New entity "MMA Global Projects" established to service EPC contractors in developing energy hubs globally

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OFFSHORE SERVICES

Core OSV business with focus on innovation and marine solutions

  • Modern well-maintained fleet - positioned to benefit from improving utilisation and rates
  • Long term production support contracts underpin earnings and cash flow - INPEX, Woodside, ConocoPhillips, Santos, BHP
  • Balanced with exposure to improving spot market for remainder of fleet
  • Strong in-house marine capability which has been maintained during the downturn
  • Focus on innovative solutions to deliver productivity and efficiency benefits to clients:
    • Accommodation and Walk to Work services
    • Cost efficient rig movements
    • Innovative vessel modifications
    • Innovative contracting arrangements
  • We differentiate ourselves by being a service provider, not just a vessel provider

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SUBSEA SERVICES

The combination of MMA's vessels and Neptune's subsea expertise enhance our subsea service offering

  • 6 modern MPSV vessels in the fleet capable of supporting a range of subsea and maintenance activities
  • Neptune acquisition to deliver strategic benefits:
    • Improved service offering to clients
    • Increased asset utilisation
    • Enhanced return on assets
    • Revenue and cost synergies
  • Positive client feedback with first combined project already underway - Survey & ROV project in Malaysia on "MMA Vigilant"
  • Integration progressing well with a number of quick wins already achieved including consolidation of facilities and IT services
  • Combined business expected to benefit from a recovery in subsea investment

PROJECT LOGISTICS

Asset light business with strong project pipeline

  • MMA has significant experience in managing large marine spreads for construction projects in the Australian market
  • MMA Global Projects recently established to focus on emerging growth markets for LNG and renewables construction projects
  • Recruited experienced and capable in-house team with strong international track record
  • Asset light business - predominantly using third party assets
  • ROA enhancing
  • Strong project pipeline of major projects in East Africa and Taiwan
  • MMA Global Projects is well positioned to service this market

FY2019 HIGHLIGHTS

50%

72%

Broad consensus that the OSV market is in the early stages of a recovery

Increase in EBITDA

Utilisation increasing with higher weighting to larger vessels

Rates increasing in the more specialised vessel segments

Strong safety performance, well above industry average

ROA and debt metrics improving and remain our key priority

Neptune acquisition to deliver subsea expansion strategy

Executing our growth strategy to deliver improved returns for shareholders

MACRO CONDITIONS

Market commentary supports the view that the fundamentals for a market recovery remain strong

"Capital expenditure budgets are up in 2019, for the first time since 2014, and are expected to grow another ~5% in 2020"

"The hurdle rate for new offshore projects amongst

the participants in our E&P survey is down ~35-40%

  • hurdle rates have now stabilised around USD~45/bbl, well below the current oil price"

"E&P cash flow generation has never looked better

.. Oil companies are stacking cash even at $50/bbl"

"Utilisation is improving from low levels, especially

on the high end. With higher utilisation, high spec

vessel segments are best positioned to see further pricing increases"

"Although the offshore recovery looks to be

a tad slower than earlier anticipated, we observe multiple data points of a recovery (e.g. growing seismic activity, field sanctioning has surpassed 2018 levels, offshore E&P spending is upped, and

international oil companies are resurfacing"

Arctic Securities, Aug 2019

"With an already observed increase in sanctioning/exploration activity we have already

witnessed a solid improvement in the demand for

offshore drilling rigs"

Pareto Securities, E&P Survey Sep 19

"2019 is expected to represent the low point in the cycle for the Group's profitability … Looking ahead, demand for offshore wind farm construction services is expected to increase and, as larger greenfield oil and gas projects are sanctioned, a continued gradual recovery is expected for deepwater SURF activity"

Quarterly results, Nov 2019

"Higher demand has been helping dayrates rise off

the bottom .. High spec PSV demand has risen 20% since bottoming in 2017"

"Many stacked vessels have not worked for several

years .. Long-term stacked vessels face substantial costs to re-enter the market"

"OSV stocks now reflect asset values far below

indicated levels by shipbrokers for second hand market sales .. The gap between the equity market and secondhand market has never been bigger"

Clarksons Platou Securities, Oct 2019

"Demand trending higher - we see

recovery towards c. 80% [AHTS and PSV] utilisation in 2020"

"Bifurcation process in full swing - older vessels struggle. More than 90% of all

contracts awarded in 2018 have been to

vessels less than 15 years of age"

Fearnley Market Update, Aug 2019

MMA's high quality modern fleet is well positioned to benefit from increased activity

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STRONG PIPELINE OF MAJOR PROJECTS

Overall increase in project activity to drive global fleet utilisation

MMA Key

Operating Regions

Project sanctioned

To be sanctioned

Marjan (Aramco)

Berri (Armaco)

Zuluf (Aramco)

Anchor (Chevron)

KG D6 (Reliance / BP)

Middle East

Gulf of Mexico

India

PNG LNG (Exxon)

West Africa

South East Asia

Limbayong (Petronas)

East Africa

Bonga SW (Shell)

Brazil

Zabazaba/Etan (Eni)

Coral South FLNG (Eni)

Pecan (Aker Energy)

Mozambique LNG (Anadarko)

Tortue / Ahmeyim (BP)

Rovuma LNG (Exxon/Eni)

Australia

ACCE (Total)

Preowei (Total)

Kalimba (Eni)

Buzios #5 (Petrobras)

SNE (Woodside)

Barossa (ConocoPhillips)

Browse (Woodside)

Mero #2 (Petrobras)

Ichthys Phase 2 (INPEX)

Itapu (Petrobras)

Scarborough (Woodside)

Sepia (Petrobras)

Gorgon Stage 2 (Chevron)

Lapa (Total)

Significant number of new projects planned in MMA's operating regions

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GROWTH STRATEGY

Our growth strategy is focused on delivering increased returns for our shareholders

OPERATIONAL

1 EXCELLENCE

  • High quality, well maintained fleet
  • Superior safety performance
  • Robust environmental management
  • Commitment to total compliance
  • Quality service delivery
  • Strong commercial management
  • Cost discipline

2 OPERATIONAL

LEVERAGE

  • Drive Return on Assets through:
    • Releasing the operating leverage of the asset base as the market recovers
    • Utilising operating skills and systems to extract value through the deployment of third party assets
    • Building on strong client network and relationships

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EXPANDING OUR

SERVICE OFFERING

  • Drive the OSV fleet further into service focused contracts such as:
    • Safe offshore personnel transfer via motion compensated gangway technology (Walk to Work)
    • Cost efficient rig movements
    • Innovative vessel modifications and contracting arrangements to deliver true cost efficiency to clients
  • MMA Global Projects - use our skills, in- house systems and project management experience to deliver broader marine logistics services to large scale projects using owned and third party assets
  • Subsea Services (Neptune acquisition) increasing MMA fleet utilisation whilst building a stronger growth platform for the subsea services business

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BALANCE SHEET

MANAGEMENT

  • Pro-activeBalance Sheet management
  • Focus on continuing to improve key debt metrics

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OPERATIONAL LEVERAGE

Increasing ROA is MMA's primary focus which will also improve the Company's debt metrics

EBITDA Return on Assets

Notes

1 EBITDA figures are Vessel Segment EBITDA less unallocated corporate overhead adjusting for major one-off projects in 2014 and 2015

  1. FY14 asset base and EBITDA is based on pre Jaya acquisition numbers (Jaya transaction completed on 4 June 2014)
  2. All figures are in AUD

Core Business Improvement

  • UTILISATION
  • RATES
  • COSTS
  • THIRD PARTY VESSELS

Expanded Service Offering

  • SUBSEA SERVICES
  • PROJECT LOGISTICS
  • WALK TO WORK

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BALANCE SHEET MANAGEMENT

The Company is cash flow positive and trading within its banking covenants

MMA Target Net Debt / EBITDA

1

2

3

4

5

6

Gross Debt A$271m (US$120m; A$100m)

Term expiry 30 September 2021

Amortisation holiday until June 20201

Trading within covenants2

Weighted average interest rate 5.99%3

LVR (Net Debt / PPE) 42%

  1. Amortisation payment of A$5.0m due on 30 June 2020
  2. Covenant testing resumed 30 Jun 19 based on earnings from 1 Jan 2019
  3. Weighted spot interest rate at reporting date

MMA remains focused on improving our key debt metric (Net Debt / EBITDA)

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INVESTMENT PROPOSITION

MMA has a clear growth strategy and is well positioned to benefit from a recovery in market demand

High quality earnings and

cashflow

  • Long term production support contracts underpin earnings and cash flow
  • High specification and well maintained fleet positions the business well to secure higher rates and utilisation as demand increases

Significant operating leverage

  • Bottom of the cycle
  • Long term fundamentals remain compelling with broad market consensus that recovery is underway
  • Earnings significantly leveraged to utilisation and rate increases
  • Growth in ROA through packaged services and third party charters
  • Trading at discount to NTA with asset values at a low point in the cycle

Strong operational track

record

  • Leading marine services company with strong operational centres in Australia and South East Asia
  • Blue chip client base
  • Strong services capability with proven track record in delivering complex projects
  • Industry leading safety record
  • Experienced leadership team with deep industry knowledge and clear strategy

Growth strategy

  • Maximise operating leverage as the market recovers
  • Increase ROA through expansion of higher margin services offering:
    • Specialised offshore services
    • Subsea
    • Project Logistics
  • Clear focus on strengthening Balance Sheet and improving debt metrics

Significant opportunity to grow return on assets

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corporate@mmaoffshore.com

mmaoffshore.com

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MMA Offshore Limited published this content on 02 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 December 2019 04:32:09 UTC