Prosafe Se · OSL:PRS
Prosafe — Q2 2011 Earnings Presentation
45 slides from Prosafe's earnings presentation, Aug 25, 2011
Slide 1: Q2 2011 results
25 August 2011 Q2 2011 results
Slide 2: Disclaimer
2 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 accurat
Slide 3: Agenda
3 Agenda n Intro and the quarter in brief n Financial results n Refinancing and dividend n Operations n Outlook n Attachments
Slide 4: Prosafe – the leading accommodation rig company
4 Prosafe – the leading accommodation rig company n Global leader q The world’s leading owner and operator of accommodation semi- submersible rigs in harsh environments q Strategically focused on high-end accommodation segment n Long track record with versatile operations for national and major oil
Slide 5: PRS – outperformed since listing in 1997
5 PRS – outperformed since listing in 1997 Securities Total return Annual equivalent Prosafe SE 486.26% 13.21% (no dividends) OSE BENCHMARK INDEX 181.91% 7.54% (no dividends) OIL SERVICE SECTOR INDEX 264.88% 9.51% (no dividends) Source: Bloomberg
Slide 6: PRS – total return since listing in 1997
6 PRS – total return since listing in 1997 Securities Total return Annual equivalent Prosafe SE 486.26% 13.21% (no dividends) Prosafe SE 764.86% 16.34% (dividends reinvested) Source: Bloomberg
Slide 7: The second quarter in brief
7 The second quarter in brief n Rig utilisation rate of 85 per cent n New contract awards for MSV Regalia, Safe Bristolia and contract extensions for Safe Hibernia and Jasminia n Safe Concordia commenced operations in Brazil
Slide 8: Agenda
8 Agenda n Intro and the quarter in brief n Financial results n Refinancing and dividend n Operations n Outlook n Attachments
Slide 9: Income statement
9 Income statement (Unaudited figures in USD million) Q2 11 Q1 11 Q2 10 1H 11 1H 10 2010 Operating revenues 125.0 71.1 139.3 196.1 226.7 442.4 Operating expenses (51.7) (41.3) (44.2) (93.0) (76.2) (159.3) EBITDA 73.3 29.8 95.1 103.1 150.5 283.1 Depreciation (15.9) (15.7) (15.4) (31.6) (30.8) (62.0)
Slide 10: Operating revenues
10 Operating revenues (USD million) Q2 11 Q1 11 Q2 10 1H 11 1H 10 2010 Charter income 110.3 64.2 124.9 174.5 206.2 397.1 Mob/demob income 0.0 1.4 2.5 1.4 2.7 6.5 Other income 14.7 5.5 11.9 20.2 17.8 38.8 Total 125.0 71.1 139.3 196.1 226.7 442.4
Slide 11: Balance sheet
11 Balance sheet (Unaudited figures in USD million) 30.06.11 31.03.11 31.12.10 30.06.10 Goodwill 226.7 226.7 226.7 226.7 Rigs 924.2 911.2 898.8 902.9 Other non-current assets 4.7 4.5 4.5 4.5 Total non-current assets 1 155.6 1 142.4 1 130.0 1 134.1 Cash and deposits 87.2 78.7 98.3 89.6 Assets held fo
Slide 12: Key figures
12 Key figures Q2 11 Q1 11 Q2 10 1H 11 1H 10 2010 Operating margin 45.9 % 19.8 % 57.2 % 36.5 % 52.8 % 50.0 % Equity ratio 31.3 % 32.5 % 25.1 % 31.3 % 25.1 % 32.4 % Return on equity 49.4 % 6.5 % 92.0 % 27.9 % 63.7 % 58.9 % Net interest bearing debt (USD million) 672.0 636.3 767.4 672.0 767.4 607.1 Nu
Slide 13: Shareholders
13 Shareholders SHAREHOLDERS AS AT 10.08.2011 No. of shares Ownership Folketrygdfondet 16 646 685 7.2 % Pareto 14 895 872 6.5 % Goldman Sachs (nom) 11 381 553 5.2 % KAS Dep. Trust (nom) 10 010 777 4.6 % Northern Trust (nom) 8 807 871 3.8 % State Street Bank & Trust (nom) 8 328 096 3.6 % Brown Brothe
Slide 14: Agenda
14 Agenda n Intro and the quarter in brief n Financial results n Refinancing and dividend n Operations n Outlook n Attachments
Slide 15: Credit facility
15 Credit facility n Revolving credit facility loan agreement of USD 1,100 million signed with a group of nine banks q Tenor: 6 years q Semi-annual reduction of USD 70 million, balloon of USD 260 million q Priced at LIBOR plus a credit margin of 1.875% n The credit facility will be used to provide f
Slide 16: Financial covenants on credit facility
16 Financial covenants on credit facility n Maximum leverage ratio of 5.0 and 4.5 after second anniversary n Minimum liquidity (including up to USD 25 million of undrawn amounts under the credit facility) of USD 65 million in the group n Minimum value adjusted equity ratio of 35 per cent n Market va
Slide 17: New dividend policy
17 New dividend policy n Prosafe’s objective is to provide shareholders with a competitive, risk-adjusted yield on their shares through a combination of share price appreciation and direct return in the form of dividend n The level of dividend will reflect the underlying financial development of the
Slide 18: Dividend
18 Dividend n Resolution on 24 August to declare an interim dividend equivalent to USD 0.166 per share to shareholders of record as of 5 September n The shares will trade ex- dividend on 1 September. The dividend will be paid in the form of NOK 0.89 per share on 15 September
Slide 19: Agenda
19 Agenda n Intro and the quarter in brief n Financial results n Refinancing and dividend n Operations n Outlook n Attachments
Slide 20: Operations in Brazil
20 Operations in Brazil n Safe Concordia commenced three-year contract with Petrobras in the quarter n The first time a DP vessel has been gangway- connected to a turret moored FPSO n Tuning of DP-system was required in connection with start-up of new operation n Operations have been running as plan
Slide 21: Recent contract awards
21 Recent contract awards n Contract for MSV Regalia for Talisman at Yme in Norway q 107 days, scheduled to commence early November 2011 n Contract for Caledonia for BG at North Everest in the UK North Sea q firm contract for BG until 17th March 2012, in addition two one-week options
Slide 22: Utilisation rate and charter revenue
22 Utilisation rate and charter revenue 100 % 450 90 % 400 80 % 350 70 % Charter revenue (USD m) 300 Utilisation rate 60 % 250 50 % 200 40 % 150 30 % 100 20 % 10 % 50 0% 0 2008 2009 2010 2011 2012 2013 2014 Firm Option Firm charter charter utilisation revenue revenue rate
Slide 23: Contract status
23 Contract status Safe Astoria Safe Esbjerg Safe Caledonia Safe Scandinavia MSV Regalia Safe Bristolia Safe Concordia Safe Britannia ç 2001 Safe Lancia ç 1998 Safe Regency ç 1997 Jasminia ç 1998 Safe Hibernia ç 2002 2006 2007 2008 2009 2010 2011 2012 2013 2014 Contract Option Yard Mob/De-mob
Slide 24: Agenda
24 Agenda n Intro and the quarter in brief n Financial results n Refinancing and dividend n Operations n Outlook n Attachments
Slide 25: Market outlook – supply
25 Market outlook – supply Dynamically positioned semi rigs Anchored semi rigs Advanced units with high operational Primary strengths: versatility: Shallow to medium water depths All water depths, any seabed Fixed installations infrastructure Some floaters, e.g. TLPs Against fixed installations and
Slide 26: Market outlook – demand
26 Market outlook – demand UK and Norwegian North Sea Drivers: maintenance, modifications, IOR projects and tie-ins of satellite fields to existing installations Oil companies’ E&P spending is expected to increase both in 2011 and 2012 Recent new discoveries should contribute positively to the activ
Slide 27: Market outlook – demand
27 Market outlook – demand Mexico ■ Drivers: q Construction support q Maintenance support q Hotel/catering/ logistical support ■ Pemex indicates increased E&P spending in the coming years ■ The demand for accommodation rigs in Mexico appears to be stable going forward
Slide 28: Market outlook – demand
28 Market outlook – demand Brazil Fixed installation Semi-submersible FPSO
Slide 29: Market demand
29 Market demand Emerging markets North Sea Mexico West Africa Southeast Asia Brazil and Australia Current location Previous operations Mature regions Emerging markets / potential growth regions
Slide 30: North Sea dayrates (time charter)
USDk 400 350 300 250 200 150 100 50 Jan-04 North Sea dayrates (time charter) = Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 MSV Regalia ==—=SafeCaledonia --===SafeScandinavia ==—Safe Bristolia (NMD3) (DP2/Posmoor) (Moored) (Moored) @9 Prosafe
Slide 31: Gulf of Mexico dayrates (bareboat)
Gulf of Mexico dayrates (bareboat) 100 so 80 — 70 60 « 4 g 2 —_—_—_— 40 _ se 30 20 10 9 T T T T Jan-04 Jan-0S Jan-05 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 eesaiePritennia mmmSzfe Regency emmSafelancis mmmSaieConcorcia. « eeSafe Sristalis Safe Hibercia Jasminia {DP2/TAMS} (OP2} {D2} iMoore
Slide 32: Rest of World dayrates (time charter)
32 Rest of World dayrates (time charter) 300 250 200 USD k 150 100 50 0 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 MSV Regalia Safe Caledonia Safe Concordia Safe Scandinavia Safe Bristolia Safe Astoria (NMD3) (DP2/Posmoor) (DP2) (Moored) (Moored) (Moored)
Slide 33: Strategy going forward
33 Strategy going forward n Prosafe’s objective is to provide shareholders with a competitive, risk-adjusted yield on their shares through a combination of share price appreciation and direct return in the form of dividend n New dividend policy with payout ratio of up to 75 per cent leaves room for
Slide 34: Summary
34 Summary n Good market outlook n Leading market position n High quality and versatile rig fleet n Increased dividend
Slide 35: Agenda
35 Agenda n Intro and the quarter in brief n Financial results n Refinancing and dividend n Operations n Outlook n Attachments
Slide 36: Debt as of end Q2 2011
36 Debt as of end Q2 2011 n Credit facility q Credit facility was initially drawn in May 2008 at USD 1.1 billion q Maturity of seven years q The applicable margin on the credit facility will vary in the range from 0.65% to 0.95% per annum depending on the leverage ratio q Current credit margin 0.75%
Slide 37: Debt as of end Q2 2011
37 Debt as of end Q2 2011 n Total interest-bearing debt USD 759.2 million: q Credit facility: USD 570 million (USD 540/30 million long-term/short- term) q Bond loan: USD 3.6 million (short-term) q Bond loan: NOK 500 million (USD 92.8 million) (long-term) q Bond loan : NOK 500 million (USD 92.8 milli
Slide 38: Financial covenants as of end Q2 2011
38 Financial covenants as of end Q2 2011 n Financial covenants in the credit facility: q Minimum cash of USD 65 million in the group q Maximum leverage ratio of 4.5 q Minimum value adjusted equity ratio of 35 per cent q Market value vessels/total commitments above 150 per cent q Working capital (inc
Slide 39: Contract history by rig and client
39 Rig name Location Client name Type of contract Firm contract Option Dayrate Current contract MSV Regalia UK North Sea, Auk South Talisman Time charter March 12 - Aug 12 USD 225 000 Norwegian North Sea, Yme Talisman Time charter Nov 11- Feb 12 USD 300 000 Norwegian North Sea, Valhall BP Time chart
Slide 40: Safe Caledonia contracts
40 Safe Caledonia UK North Sea BG Time charter Nov 11- mid March 12 March 12 USD 200 000 UK North Sea BG Time charter March 11 - Nov 11 USD 200 000 UK North Sea, Dunbar Elgin Total Time charter Jun 10 - Sep 10 USD 220 000 Apr 09 - Jun 10 USD 150 000 May 07 - Apr 09 USD 140 000 Yard/mobilisation 1.5
Slide 41: Fleet overview
41 Fleet overview Name MSV Regalia Safe Scandinavia Safe Caledonia Geographical area Harsh environment, NCS Harsh environment, NCS Harsh environment Mooring system DP 12 point chain winches 10 point wire winches Station keeping NMD3 Moored DP2 / TAMS No of beds 282 583 387 Deck area 3,250 m2 400 m2
Slide 42: Fleet overview
42 Fleet overview Name Safe Astoria Safe Bristolia Safe Esbjerg Geographical area Moderately harsh env. Moderately harsh env. Harsh environment Mooring system 8 point wire winches 8 point wire winches 4 point wire winches Station keeping Moored Moored Jack-up No of beds 245 587 (UK: 316) 139 Deck ar
Slide 43: Fleet overview
43 Fleet overview Name Safe Britannia Safe Lancia Safe Hibernia Geographical area Harsh env. Moderately harsh env. Harsh environment Mooring system 9 point wire winches 8 point chain winches 12 point wire winches Station keeping DP2 / TAMS DP2 Moored No of beds 812 600 500 Deck area 1,300 m2 1,100 m
Slide 44: Fleet overview
44 Fleet overview Name Safe Regency Safe Concordia Jasminia Geographical area Harsh environment Benign environment Benign environment Mooring system 8 point wire winches 4 point wire winches 8 point wire winches Station keeping DP2 DP2 Moored No of beds 771 390 535 Deck area 800 m2 1,300 m2 690 m2 P
Slide 45: Financial calendar and IR contacts
45 Financial calendar and IR contacts Financial calendar IR contact Cecilie Ouff Finance and IR Manager n 2 November 2011 – Publication of cecilie.ouff(a)prosafe.com third quarter 2011 results Phone: +47 51 64 25 20 n 16 February 2012 - Publication of Cell phone: +47 99 10 94 67 fourth quarter 2011/