Prosafe Se · OSL:PRS
Prosafe — Q3 2012 Earnings Presentation
38 slides from Prosafe's earnings presentation, Nov 1, 2012
Slide 1: Q3 2012 results
1 November 2012 Q3 2012 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 Introduction Financial results Operations Outlook Attachments 3
Slide 4: Recent Prosafe developments
Recent Prosafe developments Rig utilisation rate of 85 per cent in Q3 Strike steel on Safe Boreas LoI for another newbuild for NCS Commitment for newbuild financing in place Contract extensions Safe Scandinavia in Norway Safe Astoria in Australia 4
Slide 5: Agenda
Agenda Introduction Financial results Operations Outlook Attachments 5
Slide 6: Income statement
Income statement (Unaudited figures in USD million) Q3 12 Q2 12 Q3 11 9M 12 9M 11 2011 Operating revenues 142.3 129.3 131.8 397.3 327.9 449.6 Operating expenses (61.4) (65.2) (45.8) (177.7) (138.8) (192.0) EBITDA 80.9 64.1 86.0 219.6 189.1 257.6 Depreciation (14.4) (14.3) (17.0) (42.7) (48.6) (65.3)
Slide 7: Operating revenues
Operating revenues (USD million) Q3 12 Q2 12 Q3 11 9M 12 9M 11 2011 Charter income 111.7 103.1 119.6 329.9 294.1 400.7 Mob/demob income 0.0 2.0 0.7 2.0 2.1 4.1 Gain on sale of Safe Esbjerg 4.8 0.0 0.0 4.8 0.0 0.0 Other income 25.8 24.2 11.5 60.6 31.7 44.8 Total 142.3 129.3 131.8 397.3 327.9 449.6 7
Slide 8: Balance sheet
Balance sheet (Unaudited figures in USD million) 30.09.12 30.06.12 31.12.11 30.09.11 Goodwill 226.7 226.7 226.7 226.7 Rigs 876.9 909.3 893.7 910.4 New build 71.1 64.1 58.3 0.0 Other non-current assets 22.2 5.0 5.1 4.9 Total non-current assets 1 196.9 1 205.1 1 183.8 1 142.0 Cash and deposits 103.2 7
Slide 9: Key figures
Key figures KEY FIGURES Q3 12 Q2 12 Q3 11 9M 12 9M 11 2011 Operating margin 46.7 % 38.5 % 52.4 % 44.5 % 42.8 % 42.8 % Equity ratio 34.5 % 34.7 % 34.2 % 34.5 % 34.2 % 33.6 % Return on equity 43.1 % 30.4 % 58.2 % 37.5 % 37.5 % 36.2 % Net interest bearing debt (USD million) 661.5 674.0 611.2 661.5 611.
Slide 10: Commitments for newbuild financing
Commitments for newbuild financing Commitments (subject satisfactory documentation) from banks received for a USD 420 million term loan for post delivery financing of Safe Boreas and the second newbuild Closing planned for latter part of Q4 12 Key terms: Tenor of five years Repayment profile 12 year
Slide 11: Robust financial position and falling leverage
Robust financial position and falling leverage 4.0 1200 3.5 1000 3.0 800 Debt/EBITDA USDm 2.5 600 2.0 400 1.5 200 1.0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 Total debt/EBITDA Total debt 12m trailing EBITDA 11
Slide 12: Steady growth in dividend
Steady growth in dividend Dividend payments 0.6 An interim dividend equivalent to USD 0.133 per share declared. 0.5 Trade ex-dividend on 8 November Q4 0.4 Q4 Will be paid in the form of NOK USD per share Q3 0.75 per share on 22 November 0.3 Q4 Q3 DPS of USD 0.532 for 2012 0.2 Q2 Q4 In line with poli
Slide 13: Agenda
Agenda Introduction Financial results Operations Outlook Attachments 13
Slide 14: Safe Boreas progress
Safe Boreas progress Semi-submersible to be built as NCS compliant/ harsh environment Strike steel in October Scheduled delivery from yard end of Q2 2014 Awarded a six-month firm contract (+ options) by Financial status Q3 12 USDm Lundin for operations in Book value o.b. 64 Norway in 2015 Book value
Slide 15: LoI signed for a NCS compliant semi-submersible
LoI signed for a NCS compliant semi-submersible LoI with Jurong Signing of contract expected in near future Similar design as Safe Boreas Ready for operations on the NCS for the summer season 2015 Initial instalment to be paid in Q4 Three options Units for either NCS/North Sea or world-wide operatio
Slide 16: Safe Caledonia refurbishment and life extension
Safe Caledonia refurbishment and life extension Caledonia at Remontowa yard Rig life to be extended by 20 years Slight cost increase due to prolonged yard stay Contract with BP in the UK North Sea scheduled to commence second half of January 2013 16
Slide 17: Total capital expenditure 2012
Total capital expenditure 2012 Actual Q3 YTD: USD 90 million Expected Q4: USD 90-110 million Includes initial instalment of second newbuild Expected 2012 FY: USD 180-200 million Major items: Safe Caledonia life extension Initial instalment second newbuild Safe Boreas newbuild project Safe Astoria up
Slide 18: Contract backlog continues to increase
Contract backlog continues to increase 1,000 Firm USD 747 + Option USD 118m 900 = Total USD 865m 800 700 2015 2012 6% 13 % 600 USD million 500 400 2014 42 % 2013 300 39 % 200 100 Options Firm contracts 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 08 08 08 09 09 09 09 10 10 10 10 11 11 11
Slide 19: Growing North Sea contract coverage for 2013-15
Growing North Sea contract coverage for 2013-15 Safe Boreas Safe Scandinavia Regalia Safe Caledonia Safe Bristolia Safe Astoria Safe Concordia Safe Hibernia Safe Britannia Safe Regency Safe Lancia Jasminia 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Contract Option Yard 19
Slide 20: Operating cost per day
Operating cost per day Region DP semis Anchored semis Safe Scandinavia, Safe Caledonia, Safe Regalia, Safe Concordia, Safe Caledonia Bristolia, Safe Astoria NCS 85-95,000 65-75,000 UKCS 65-75,000 45-55,000 Brazil 80-90,000 n/a All figures in USD. Includes IRM and non-cash elements Cost per day in op
Slide 21: Agenda
Agenda Introduction Financial results Operations Outlook Attachments 21
Slide 22: Prosafe is the clear market leader
Prosafe is the clear market leader No. of accommodation semis by owner No. of accommodation semis by regional capabilities 26 26 Axis Off. 24 24 22 Yantai 22 20 ETESCO 20 18 FOE 18 16 16 Rest of World COSL 14 14 Pemex UK 12 12 10 Cotemar 10 Norway 8 Floatel Int. 8 6 6 Consafe 4 4 Prosafe 2 2 0 0 22
Slide 23: Norway - solid demand
Norway - solid demand High focus on improved recovery resulting in Latest year of production Brage Draugen increased field life expectancy as of 1992-95 Ekofisk estimate Upgrade of existing Gullfaks Statfjord facilities Varg Latest year Tie-ins of production Veslefrikk as of 2002 estimate High explo
Slide 24: UK – old infrastructure supports demand
UK – old infrastructure supports demand A significant amount of infrastructure in the UKCS is over 30 years old Increased maintenance and renewal of existing facilities needed to sustain integrity and improve reliability Increasing number of tie-backs could imply upgrade of existing facilities Capit
Slide 25: Positive development in North Sea demand index
Positive development in North Sea demand index North Sea demand index 110 Growing underlying 100 101 100 99 demand trend 90 90 91 90 87 81 79 78 New prospects for 2014- 80 70 76 2015 have appeared 70 65 67 64 recently 60 50 Increasing amount of Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 09 0
Slide 26: North Sea dayrates (time charter)
North Sea dayrates (time charter) 400 350 300 250 USD k 200 150 100 50 0 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Safe Boreas Regalia Safe Caledonia Safe Scandinavia Safe Bristolia (DP3) (NMD3) (DP2/Posmoor) (Moored) (Moored) 26
Slide 27: Robust demand in Mexico
Robust demand in Mexico Mexico has been a stable market for many years The activity level has been high lately, which should bode well for demand for offshore accommodation going forward Three contracts up for renewal in the coming quarters 27
Slide 28: Gulf of Mexico dayrates (bareboat)
USDk Gulf of Mexico dayrates (bareboat) 100 90 | 70 60 50 40 30 20 10 0 T ; T T T T T 7 T Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 eeeSafe Britannia mmmSafeRegency =—SafeLancia ===SafeConcordia =—=Safe Bristolia ==—=Safe Hibernia Jasminia (DP2/TAMS) (DP2) (DP2) (DP2) (Mo
Slide 29: Current demand comes from the Campos basin
Current demand comes from the Campos basin Currently three units working in the Campos basin Likely that more units are needed in the short- to medium-term In the long-term, there should be significant growth potential in other areas Financial return has not been adequate – may limit long- term grow
Slide 30: Demand in Asia and Australia appears promising
Demand in Asia and Australia appears promising The market in Australia and Southeast Asia appears promising A number of concrete prospects have been identified in the region 30
Slide 31: Rest of World dayrates (time charter)
USD k Rest of World dayrates (time charter) 300 250 200 ee —= 150 — rs ——_ 100 — LT 50 0 T T T 1 T T 1 1 T T Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 ===Regalia === Safe Caledonia === Safe Concordia Safe Scandinavia =—=SafeBristolia —=—=Safe Astoria (NMD3)
Slide 32: Summary
Summary Market outlook for the next couple of years appears promising Fleet growth in the high-end segment of the accommodation market Prosafe is well positioned Clear market leader High-quality, diversified fleet Robust financial position High dividend combined with fleet growth and renewal 32
Slide 33: Agenda
Agenda Introduction Financial results Operations Outlook Attachments 33
Slide 34: Debt as of end Q3 2012
Debt as of end Q3 2012 Credit facility Total commitments end of Q3: USD 927 million Maturity: August 2017 The current applicable credit margin on the credit facility is 1.875% The availability under the credit facility is reduced semi-annually with USD 68 million. Balloon of USD 247 million. NOK 500
Slide 35: Debt as of end Q3 2012
Debt as of end Q3 2012 Total interest-bearing debt USD 764.7 million: Credit facility: USD 526 million (long-term) Bond loan: NOK 360.5 million (long-term) Bond loan : NOK 500 million (long-term) Bond loan : NOK 500 million (long-term) 35
Slide 36: Financial covenants on credit facility
Financial covenants on credit facility Maximum leverage ratio of 5.0 and 4.5 after August 2013 Minimum liquidity (including up to USD 25 million of undrawn amounts under the credit facility) of USD 65 million in the group Minimum value adjusted equity ratio of 35 per cent Market value vessels/total
Slide 37: Shareholders
Shareholders SHAREHOLDERS AS AT 24.10.2012 No. of shares Ownership State Street Bank & Trust (nom) 26 227 800 11.4 % Folketrygdfondet 16 611 685 7.2 % State Street Bank & Trust (nom) 13 626 675 5.9 % Goldman Sachs (nom) 11 664 087 5.1 % Pareto 10 811 398 4.7 % FLPS 7 900 000 3.4 % Prosafe SE 6 975 8
Slide 38: Largest shareholders as of August 2012
The table below shows the 20 largest shareholders as of 22 August 2012 and the change from the previous analysis dated 22 May 2012.* Fund Manager Shares Absolute % at change 22 Aug. 12 M&G Investment Management 21,076,000 2,798,203 9.17 Folketrygdfondet 18,543,222 -650,000 8.06 State Street, USA (va