Prosafe Se · OSL:PRS
Prosafe — Q3 2014 Earnings Presentation
36 slides from Prosafe's earnings presentation, Nov 5, 2014
Slide 1: Q3 2014 results
5 November 2014 Q3 2014 results
Slide 2: Disclaimer
Disclaimer All statements in this presentation other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate.
Slide 3: Agenda
Agenda Recent developments Financial results Operations/projects Outlook Appendix 3
Slide 4: Recent developments
Recent developments Q3 utilisation of 96 per cent Best operating result ever in Q3 Construction of first new build approaching completion Safe Bristolia operation suspended due to weather damages to equipment Near-term outlook still uncertain – demand softness in the North Sea region 4
Slide 5: Agenda
Agenda Recent developments Financial results Operations/projects Outlook Appendix 5
Slide 6: Income statement
Income statement (Unaudited figures in USD million) Q3 14 Q2 14 Q3 13 9M 14 9M 13 2013 Operating revenues 169.5 133.4 159.4 394.6 388.7 523.5 Operating expenses (59.9) (62.4) (50.8) (175.9) (163.5) (216.9) EBITDA 109.6 71.0 108.6 218.7 225.2 306.6 Depreciation (16.6) (16.0) (18.2) (47.8) (47.1) (61.
Slide 7: Operating revenues
Operating revenues (USD million) Q3 14 Q2 14 Q3 13 9M 14 9M 13 2013 Charter income 148.8 114.7 146.0 344.0 348.8 469.2 Mob/demob income 3.0 3.7 0.0 7.8 5.4 9.1 Other income 17.7 15.0 13.4 42.8 34.5 45.2 Total 169.5 133.4 159.4 394.6 388.7 523.5 7
Slide 8: Balance sheet
Balance sheet (Unaudited figures in USD million) 30.09.14 30.06.14 31.12.13 30.09.13 Goodwill 226.7 226.7 226.7 226.7 Vessels 1 004.1 995.8 946.9 926.2 New builds 293.7 275.6 248.9 152.5 Other non-current assets 5.2 5.1 4.9 16.5 Total non-current assets 1 529.7 1 503.2 1 427.4 1 321.9 Cash and depos
Slide 9: Key figures
Key figures KEY FIGURES Q3 14 Q2 14 Q3 13 9M 14 9M 13 2013 Operating margin 54.9 % 41.2 % 56.7 % 43.3 % 45.8 % 46.8 % Equity ratio 41.1 % 40.9 % 45.7 % 41.1 % 45.7 % 45.7 % Return on equity 37.8 % 24.2 % 49.9 % 23.2 % 30.4 % 31.7 % Net interest bearing debt (USD million) 773.8 799.2 613.7 773.8 613.
Slide 10: Solid funding structure in place
Solid funding structure in place Interest-bearing debt portfolio Facility Commitment Maturity Margin USD 1,100 million credit facility (2011-17) USD 655 million Q3 2017 187.5 bps USD 420 million credit facility (2012-17) USD 420 million Q4 2017 295 bps USD 288 million credit facility (2014-2021) USD
Slide 11: Dividend policy
Dividend policy Paying out up to 75 per cent of previous year’s net profit Exact level to be paid in each period dependent on Supply/demand balance in the market Investment level Overall financial position of the Group Detailed guidance: 40-60 per cent normally Up to 75 per cent in stronger periods
Slide 12: Dividend
Dividend Declared an interim dividend equivalent to USD 0.053 per share The shares will trade ex- dividend on 13 November The dividend will be paid in the form of NOK 0.36 per share on 26 November Reflecting a payout ratio of 25 per cent of last year’s net profit 12
Slide 13: Agenda
Agenda Recent developments Financial results Operations/projects Outlook Appendix 13
Slide 14: Operations
Operations Solid operations in Q3 Utilisation rate of 96 per cent Safe Bristolia sustained damages to lifeboats after experiencing extreme weather conditions around mid October 14
Slide 15: Safe Boreas
Safe Boreas Commissioning ongoing Sea trials to commence during next few weeks On track for start-up of operations in Norway in late April/early May First contract for Lundin at the Edvard Grieg field in Norway Financial status Q3 14 USDm Book value o.b. 109 Book value c.b. 117 Capitalised in quarte
Slide 16: Safe Boreas
Safe Boreas 16
Slide 17: Safe Zephyrus
Safe Zephyrus Major items of equipment installed Installation of cabins ongoing Ready for operations in 2015 Financial status Q3 14 USDm Book value o.b. 79 Book value c.b. 84 Capitalised in quarter 4 Estimated total cost 350 17
Slide 18: Safe Notos and Safe Eurus
Safe Notos and Safe Eurus Projects developing as planned Fast start: Steel cutting taking place 4 months after contract and keel lay 8.5 months after contract Engineering and procurement progressing well Strong capabilities The most advanced and flexible vessels for worldwide operations excluding No
Slide 19: State of the art North Sea fleet
State of the art North Sea fleet Safe Boreas – new build Safe Zephyrus – new build Safe Notos – new build Safe Eurus – new build Safe Scandinavia – life extension in 2014 (20 years) Safe Caledonia – life extension in 2013 (20 years) Regalia – life extension in 2009 (20 years) Safe Bristolia – conver
Slide 20: Agenda
Agenda Recent developments Financial results Operations/projects Outlook Appendix 20
Slide 21: Substantial growth in semi accommodation fleet
Substantial growth in semi accommodation fleet No. of accommodation semis by owner Overview of incoming vessels 2012-2016 34 32 POSH 30 Jasper 28 26 OOS POSH; 2 24 Axis Off. 22 20 Jasper; 1 Prosafe; 4 ETESCO 18 16 FOE 14 OOS; 2 COSL 12 10 Pemex Floatel Int. ; 3 8 Cotemar Axis Off.; 2 6 4 Floatel Int
Slide 22: North Sea – weaker demand
North Sea – weaker demand Short-to-medium term weakness North Sea accommodation demand index More uncertain demand situation 120 112 109 due to reduced spending by oil 110 106 103 101100 companies 99100 100 100 95 94 90 91 90 87 Several maintenance, modification 90 81 79 78 and upgrade projects de-s
Slide 23: North Sea day rates (time charter)
North Sea day rates (time charter) 23
Slide 24: Mexico – stable outlook
Mexico – stable outlook GoM infrastructure map High activity level in shallow waters evidenced by an increasing number of drilling jack-ups under contract Interesting potential also in other shallow water areas besides Cantarell Energy reform has been approved Opening up for international oil compan
Slide 25: Mexico day rates (bareboat)
Mexico day rates (bareboat) 25
Slide 26: Brazil – continued demand growth
Brazil – continued demand growth Positive demand outlook High activity in the Campos basin Primarily maintenance requirements Santos basin opportunities Operators other than Petrobras showing interest in accommodation vessels Potential for further contract awards in Number of accommodation vessels i
Slide 27: Rest of the world – interesting opportunities
Rest of the world – interesting opportunities Australia Some demand related to hook-up and commissioning As fields are getting older, there should be potential for more maintenance and modification related work South East Asia Some demand for semis in mid and deep waters, mostly related to hook-up a
Slide 28: Rest of the World day rates (time charter)
Rest of the World day rates (time charter) 28
Slide 29: High contract visibility
High contract visibility Zephyrus | ; | J | Boreas , | | | sl | sconcnvie i SoS et SSE SSE! = Ss fick _ iis Seas caedonia ST a | rio a ‘ono = Astoria [i —— a = = UU —_ Hibernia La Britannia ES Regency Ss Lancia a ee Jasminia ——————————== 009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 m=C
Slide 30: Robust contract backlog
Robust contract backlog But no new contracts signed over past six months Gross value of charter contracts Status end Q3 14 2 500 Firm contracts USD 1,371m + Options (1) USD 783m = Total USD 2,154m 2 000 Options Letter of Intent Firm contracts USD million 1 500 2017 2014 15 % 10 % 2018-22 5% 1 000 20
Slide 31: Summary
Summary New build projects Safe Boreas in completion phase Safe Zephyrus ready for operations in 2015 Positive outlook in Mexico and Brazil Weak North Sea demand Dividend reduced in order to strengthen balance sheet and securing financial flexibility in a weaker market 31
Slide 32: Agenda
Agenda Recent developments Financial results Operations/projects Outlook Appendix 32
Slide 33: Vessel motion characteristics
Vessel motion characteristics Six degrees of freedom refers to the freedom of movement of a rigid body in a three-dimensional space The body is free to move (translation) along three axes Surge (forward/backward or forward/astern) Sway (left/right or port/starboard) Heave (up/down) The body is free
Slide 34: Vessel motion characteristics
Vessel motion characteristics Gangway connecting to a fixed target Connect the gangway – Maintain position Accommodation vessel should move as little as possible Gangway connecting to a moving target Connect the gangway – Follow target Accommodation vessel should move as required Key variables for o
Slide 35: Vessel motion characteristics DP vessels
Vessel motion characteristics DP vessels See appendix and latest issue of the “Prosafe Now” magazine (can be found at www.prosafe.com) for more details Source: Prosafe estimates based on available technical specifications 35
Slide 36: Harsh environment capabilities DP vessels
Harsh environment capabilities DP vessels Airgap in operation (m) 14,0 12,0 11,0 11,5 9,5 9,5 10,0 10,0 9,5 7,6 8,0 meters 8,0 6,7 6,7 7,0 6,0 4,0 2,0 0,0 Floatel Reliance Safe Concordia Floatel CSS Olympia Regalia Posh Xanadu Floatel Superior Floatel Endurance Safe Eurus/Notos Safe Axis Nova/Vega V