Presentation

Höegh LNG is a provider of LNG services, predominantly through owning and operating floating storage and regasification units (FSRUs). With over 40 years of industry experience, Höegh is a pioneer in the LNG space and still controlled by the Höegh family (48.9% stake). The company was listed on the Oslo Stock Exchange in 2011 and currently has a market capitalization of USD 100m, with net debt of USD 1.6bn as of Q2’20. In 2014 an MLP was established, Höegh LNG Partners, currently listed in the US and controlled by Höegh LNG who owns 46% of the shares outstanding.

Höegh owns and operates ten FSRUs (five through the MLP), on a mix of long-term contracts through at least 2024 and short-term charters where the vessels operate as interim LNGCs. In addition, the company has two LNG carriers on contracts with solid counterparties through at least 2025. Short term contract coverage is solid, with ~100% uptime for 2020. However, five vessels are coming off contracts in 2021 and the depressed state of the LNGC market means that these should preferably be engaged in FSRU projects.

Höegh had a busy Q1’20 where all refinancing for 2020 was completed, as well as securing additional liquidity. The result is a much more solvent company, which we believe will stay afloat without further equity-needs until the HLNG03 maturity in Q1’22 (NOK 1.5bn). While we see a potential value in Höegh of > NOK 30 per share if proper FSRU-contracts are achieved, the near-term outlook is clouded due to the lack of recently awarded work.