MODEC, Inc.
2023 Half-Year
Financial Results
Analysts Presentation
August 14, 2023
1

1. Highlight
2. Initiatives for sustainable growth
3. Financial Results(Note)
From the end of FY2021, the Company's consolidated financial results
have applied International Financial Reporting Standards (IFRS) instead of
the conventional Japanese GAAP. In addition, the currency unit has beenchanged to the US dollar instead of the conventional Japanese yen.
As a result, the figures for previous years in this document are handled asbelow.
・ FY2020: Compliant with IFRS (US $)・ FY2019: Japanese standard (Japanese yen) figures are converted toUS dollars at the midpoint of the market price of telegraph spots forcustomers at the end of each year (1 US dollar = 109.54 yen)2

1. Highlight

FY2023 Half-Year：New Order (1)Uaru FSPO➢

Our first project in Guyana➢

Our first order from ExxonMobil since 2003

Client ExxonMobil
Contract EPCI+O&M(10years)
Field Stabroek
Water Depth 1,690m
Oil Production 250,000 bopd

Gas Production 540 mmscfd
Storage 2,000,000 bbls
3

1. Highlight

FY2023 Half-Year：New Order (2)BM-C-33 FPSO➢Our second FPSO with combined
cycle power generation system➢

10th FPSO in the pre-salt region

Client Equinor

Contract EPCI+O&M(1year)
Field BM-C-33
Water Depth 2,900m
Oil Production 125,000 bopd
Gas Production 565 mmscfd

Storage 2,000,000 bbls

4

1. Highlight

FY2023 Half-Year：Order received➢ USD 7,853 million in the first half of the year
➢ Annual Orders are expected to reach a record highEPC(I)
Lease, Charter and O&M

US$M

7,853

8,000

5,804

6,399
2,928

4,000
3,148

2,902

1,444
2,079

1,462

2,875
855

1,704

1,453
823

606

2021

2022020192020

2023 1H

51. Highlight

FY2023 Half-Year：EPC(I) (as of June 2023)
FPSO
Anita Garibaldi
MV33

FPSO
Sangomar

FPSO
Bacalhau

FPSO
Uaru

FPSO
BM-C-33

ClientPetrobras

Woodside

EquinorExxonMobil

EquinorContract

EPCI + Time Charter Purchase Contract( 25 yrs)+ O&M(10 yrs+10 one-year
extension options)

EPCI + Short term
O&M

EPCI + O&M (10 yrs)

EPCI + Short term
O&M

Delivery(Planned)

2023

2024

2024

2026

2027

FieldMarlim

Sangomar

BacalhauStabroek

BM-C-33

Location

BrazilSenegalBrazilGuyanaBrazilWater Depth

670 m

780 m

2,027 m

1,690 m

2,900 mStorage/Production

1,000,000 bbls
80,000 bopd
248 mmscfd

1,300,000 bbls
100,000 bopd
130 mmscfd

2,000,000 bbls
220,000 bopd
500 mmscfd

2,000,000 bbls
250,000 bopd
540 mmscfd

2,000,000 bbls
125,000 bopd
565 mmscfd

6

1. Highlight

FY2023 Half-Year：Charter

FPSO Almirante Barroso MV32

Charter commenced in May 2023

Client Petróleo Brasileiro S.A. (Petrobras)
Contract EPCI + Time Charter (21 yrs)Field Búzios
Water Depth 1,900m
Oil Production 150,000 bopd
Gas Production 212 mmscfd

Storage 1,400,000 bbls
7

As of July 2023
◼ EPC(I) period◼ Time Charter fixed period◼ Time Charter option period◼ O&M period

1. Highlight

EPC(I) / Charter / O&M Period
FPSO BM-C-33

Equinor2

FPSO Uaru

ExxonMobil

3

FPSO Bacalhau

Equinor

1y4

FPSO Sangomar

Woodside

10y

1y
10y5

32.5 FPSO Anita Garibaldi MV33

Petrobras

25y1

35.0 FPSO Almirante Barroso MV32

Petrobras

21y2

35.0 FPSO MIAMTE MV34Eni329.4 FPSO Guanabara MV31

Petrobras

429.4 FPSO Carioca MV30

Petrobras

5Cidade de Campos dos Goytacazes Petrobras
29.4 FPSOMV29625.0 FPSO Prof. John Evans Atta MillsTullow

729.4 FPSO Cidade de Caraguatatuba MV27

Total

8

29.4 FPSO Cidade de Itaguai MV26

Petrobras

929.4 FPSO Cidade de Mangaratiba MV24

Petrobras

1034.0 FPSO Cidade de Sao Paulo MV23

Petrobras

1142.5 FPSO Cidade de Angra dos Reis MV22

Petrobras

15y

1270.0 FPSO Cidade de Santos MV20

Petrobras

15y1367.0 FPSO Cidade de Niteroi MV18Petrobras

9y1465.0 FSO Rang Dong MV17

JVPC

9y

15

40.6 FSO Cidade de Macae MV15

Petrobras

1642.0 FSO Rong Doi MV12KNOC

1750.0 FPSO Baobab Ivoirien MV10CNR

1FPSO Raroa

OMV2FPSO Pyrenees Venture

BHPB

3

FPSO Fluminense

Shell

2030

1

2028

2026

2024

2022

2020

2018

2016

2014

2012

2010

2008

2006

2004

(*)

MV32
Charter commenced

15y
22y
21y
20y
10y
20y

20y
20y
20y

6y
8y

20y

8y

7y

5y

10y

3y

15y
15y
22.3y

(*) Share % owned by MODEC group companies (Equity method companies)81. HighlightOrder Backlog (Charter)
Secure long-term stable earnings with a large backlog of orders
US$M
8,000
7,464

7,318

7,289

6,013

5,958

2022

2023 1H

4,00002019

2020

2021

91. Highlight

Floating Production Systems Planned or Under Study
Projects in Planning Pipeline (Appraisal, Planning, and Bidding/Final Design) as of July 2023
World Total
55

Bidding & Final Design

85

Planning

41

Appraisal

ChinaCanada

0Northern Europe
4320

1

1

6

Southeast Asia

2GOM

13

519

Mediterranean
453Southwest Asia & Middle East

157Brazil

2

78Africa

14213187Australia, New Zealand

102281Other South America,Hawaii & Caribbean

2410
Source: : EMA July 2023 Floating Production Systems Report1. Highlight

FY2023 : Outlook➢ Full-year revenue is expected to be US$3,000M due to progress of new EPCI projects (Exxon Uaruand BM-C-33) in addition to existing projects (Woodside Sangomar and Equinor Bacalhau).
➢ Although additional repair costs are forecasted, we expect to achieve the full-year earnings
guideline by progress of new EPCI projects and equity-method investment income and interest
income from charter projects.
Profit Attributable to Owners of Parent

Revenue
US$M

US$M
3,899

4,000

100
Full-year
forecast
3,000

3,036
2,736

2,739

Full-year
Forecast
4550

37

0

1H Actual23(50)
2,000(100)
1H Actual
1,588

(131)

(150)
(166)

(200)
(350)
(363)

0
2019

2020

2021

2022

2023

(400)
(250)
2019

2020

2021

2022

2023

11

1. Highlight

Third-party allotment capital increase【Overview】➢Number of new shares issued : Common stock 11,937,300 shares➢Amount of funds raised: JPY 15,088,747,200➢

Use of funds: Investment and loan to SPCs➢

Underwriter: Mitsui O.S.K. Lines, Ltd. (10,162,300 shares)

MITSUI & CO., LTD. (1,775,000 shares)➢

Other: Concluded a business alliance agreement with underwriters【Purpose】⚫ Maintaining and strengthening financial structure to expand FPSO business⚫ Strengthen the ability to raise funds from financial institutions by strengthening cooperative
relationships with underwriters and increasing the creditworthiness of projects.
⚫ Synergies generated by mutual utilization of management resources, know-how, brands,
customer base, increase of our presence in the industry, and enhancement ofcompetitiveness.
12

1. Highlight

Shareholder return【Annual dividend per share (JPY)】
Capital reduction

Special dividend/commemorative dividend
Ordinary dividend
45

7.5

7.5

10

12.5

15

17.5

20

22.5

25

27.5

30

32.5

35

37.5
1045

1042.54015➢ Increased dividends until 2019 since being listed on the 1st Section of the Tokyo Stock
Exchange in 2004.
➢ No dividend in 2022 due to deterioration in performance due to the impact of COVID-19➢ Making an effort for resumption of dividend【Capital reduction】
The purpose of capital reduction this time is to improve the financial structure, andensure the flexibility and mobility of future capital policies, including shareholder returns
by compensating for the deficit in non-consolidated retained earnings.

13

1. Highlight
2. Initiatives for sustainable growth
3. Financial Results

14

2. Initiatives for sustainable growth

Overview of initiatives
Sustainable Development Goals (SDGs)▪ While Modec recognizes that its business activities may directly or indirectly impact all 17SDGs adopted by UN Member states in 2015, the Company will focus on Goals 5, 7, 8, 13
and 14 which are most impacted by our operations▪ Modec has signed the United Nations Global Compact(“UNGC”) consisting of ten principles on human rights, labor,environment and anti-corruption, and joined the Global
Compact Network Japan, a local network in Japan.
▪ Modec is committed to the ten principles related to “humanrights protection”, “elimination of unfair labor”,“environmental protection” and “anti-corruption”.

Pathway Towards Net Zero 2050
▪ Modec aspires to achieve “Net Zero”1 by 2050 as a result of implementing the above business strategy including FPSO decarbonization with significantly reduced FPSO Carbon Intensity andNew Business Development.
Continuing contributions to stable oil and gas
supply by FPSOs, while minimizing GHGemissions

Accelerating the business model evolution tocontribute to clean energy generation

Notes:
1. - The MODEC GHG emissions in Scope 1, Scope 2 and Scope 3 (Category 13 - Downstream Leased Assets only) are to be reduced, and residual emissions are to be offset by GHG reduction
contribution through our New Business, for example, we consider generated electricity by FOW as relative reduction contribution against conventional energy.
- Aim to achieve net zero for Scope 1 and 2 by 2030 in the above path15

2. Initiatives for sustainable growth

MODEC in future

Image of revenue composition ratio
FPSO with lowercarbon

Other2050<Image>CurrentFPSO

Digital solution

Floating offshore wind16

2. Initiatives for sustainable growth

Efforts to reduce the carbon footprint of FPSOs⚫ Oil and gas are expected to continue to be one of
the world's major energy sources over themedium to long term.
⚫ Accelerating efforts to reduce the carbon
footprint of FPSOsCurrent efforts⚫ Equinor Bacalhau FPSO is equipped with acombined cycle power generation systemthat combines a gas turbine and a steamturbine. It contributes to reducing carbon
dioxide emissions during FPSO operation.

⚫ GHG emissions from FPSOs in operation have been
published on the website from 2021

CO2e: Value converted from total GHG to CO2 amount based on global warming potential

FY 2019

FY 2020

FY 2021

Scope 100

Scope 20.2万t – CO2e0.1万t – CO2e

Scope 3-FY 2022
000.1万t – CO2e 0.1万t – CO2e- 380万t – CO2e 520万t - CO2e17

2. Initiatives for sustainable growth

Floating offshore wind (1)182. Initiatives for sustainable growth

Floating offshore wind (2)192. Initiatives for sustainable growth

Digital solution20

1. Highlight
2. Initiatives for sustainable growth
3. Financial Results

3. Financial Results

Revenue
EPC(I)
Lease, Charter and O&M⚫ The progress of construction
work of Woodside Sangomar,
Equinor Bacalhau, and Uaru
contributed to revenue.

US$M
3,899

4,000
3,036
3,000

2,739

2,736
3,115

2,000

2,168

1,775

1,949

1,588
1,096

1,000868

786783

964

2019

2020

2021

2022

0492
2023 1H

EPC(I)period2023 1H
construction revenue(US$M)

BM-C-33
Uaru
Bacalhau
Sangomar

Bacalhau
Sangomar
Uaru
BM-C-33

MV33
MV32
MV34
MV31

: 200
: 150
: 550
: 50

MV30
2020

2021

2022

2023

2024

2025

22

3. Financial Results

Operating Profit / Profit Attributable to Owners of Parent
Operating Profit US$49M / Profit Attributable to Owners of Parent US$23M / EBIDA US$173M(refer to P26)

Profit Attributable to Owners of Parent

Operating Profit
US$M

US$M

MV3230010050200372310075

49

0(50)

0(44)

(100)

(100)
(138)

(131)

(150)

(200)

(166)
(300)

(350)
(200)
(317)

(363)

(400)

(250)
(400)

2019

2020

2021

2022

2023 1H(Note) Shifted to IFRS from FY2020, and record equity in earnings of affiliates, etc. as operating income

2019

2020

2021

2022

2023 1H23

3. Financial Results

Equity in Earnings of Affiliates / Interest Income
Steady growth in charter-related income (equity in earnings of affiliates and interest income)Interest Income (Charter related)

Equity in Earnings of Affiliates
US$M

US$M

150

4039363734

126

100

20185650

4130
2000
2019

2020

2021

2022

2023 1H

2019

2020

2021

2022

2023 1H24

3. Financial Results

Order Backlogs⚫ Order backlog for construction work increased significantly due to two new orders received.
⚫ Charter/O&M order backlog remains at a high level with long-term contracts.

US$M

Order backlogs for MODEC Group’s share in the “Lease,Charter and O&M services” of the affiliates accounted for by
the equity method

EPC(I)
Lease, Charter and O&M

20,00017,83916,0006,645
12,662

12,74911,67112,000
3,788

3,288

10,790
2,252

1,341
7,464

8,000

7,318

7,289
6,013

5,958

2022

2023 1H

11,194
4,000

8,873

9,461

9,419

9,449

20192020

2021

2022

02023 1H

2019

2020

2021

25

3. Financial Results

Adjusted EBITDA

GAPP

Adj. GAAP(*)

EPCI + O&M Operations$ 64MM$64MM

Charter Operations$ 86MM$99MM

Service Fee (PL / CF)

$

22MM$

21MM

Interest received (PL / CF)$23MM$

22MM

Equity method investment income (PL)/ Dividend received (CF)

$42MM

$

56MM

SGA (PL)$ ▲78MM$ ▲78MM

Depreciation (CF)$$Payment by repayment of leaseobligations (CF)$ ▲12MM$ ▲12MM

One-off cost$$

Adjusted EBITDA$21MM80MM160MM$

21MM80MM
173MM⚫

Dividends received (Adj. GAAP): Dividends received from SPC✓ Dividends paid mainly from charter profits up to theprevious fiscal year

※ Dividends are paid based on the balance of cash and deposits ateach point in time based on the agreement between thesponsors, so there is a difference in the timing of recognition
from equity method income.

⚫

Adjust for one-off cost increase factors

Covid-19 impact
Aggregate EPCI construction delays costs due to Covid-19
Special Maintenance Campaign
Aggregated repair work costs using floatel on MV22(*) Charter Operations of Adj. GAAP is based on Cashflow

26

3. Financial Results

Financial position and cash flow
Financial Position
Unit：US$M

2022.122023.6

Variance

Cash and cash equivalents

49255765

Trade & Other receivable

478

504

26

Contract assets

257

261

4

1,114

1,113-1

LT loan receivable

365

355-10Total assets

3,136

3,216

80

Investment accounted for using equity method2022.122023.6VarianceTrad &Other payable

921

961

40

Contract liabilities

499

438

-61

LT Bond & borrowings

374

345

-29

2,295

2,235-60

Share capital / Capital surplus

563

378

-185

Retained earnings

131

447

316

Other components of equity

118

113

-5

Equity attributable to owner of parent

811

938

127

Non-controlling interests

2943

14

841
3,1360.5倍

981
3,2160.4倍

14080-0.1points

Total liabilities

Total equity
Total liabilities and equity
D/E ratio

Cash flow
Unit：US$M
Cash flows from operating activities
Cash flows from investing activitiesFree cash flows

2022.62023.6-192-2-195

Variance
-40
10-29

152
12
16627

Thank you