Prosafe Se · OSL:PRS
Prosafe — Q2 2023 Earnings Presentation
31 slides from Prosafe's earnings presentation, Aug 17, 2023
Slide 1: Q2 2023 Results
Q2 2023 Prosafe to select new image Results 17 August 2023
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: Key events Q2 2023
Key events Q2 2023 Operations, HSSE and backlog ▪ Utilisation of 33.1%, three out of seven vessels operating during the quarter ▪ Safe Zephyrus on hire in Brazil from 30 April ▪ Safe Concordia on hire in U.S. Gulf of Mexico from 9 August ▪ Safe Notos back on hire from 14 June ▪ Good operating perfor
Slide 4: Operations
Operations 4
Slide 5: Good operating performance
Recent operations Good operating Caledonia performance Boreas ▪ Safe Zephyrus successfully mobilised to Brazil. Started contract with Petrobras on 30 April 2023 Concordia ▪ Safe Eurus and Safe Notos continued to Zephyrus work for Petrobras in Brazil ▪ Safe Notos completed hull cleaning and Eurus Not
Slide 6: Stable backlog since Q2
Order backlog (USD million) Stable backlog since Q2 2022 24 31 25 25 19 332 ▪ Backlog of USD 298.7 million at end Q2 300 293 316 299 ‒ Mainly reflecting Safe Eurus, Safe Notos and Safe Zephyrus contracts with Petrobras ▪ No additions to backlog in Q2 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Backlog Options Exp
Slide 7: Utilisation improving with Zephyrus and Concordia on hire
Utilisation improving with Zephyrus and Concordia on hire Contract overview 2023 operational items ▪ Safe Eurus: Actively marketed ‒ ~35 days off-hire moved to Nov/Dec 2023 for hull cleaning, Petrobras contract modifications and SPS ‒ 2023: Expected capex1 of USD ~6-7 million and all-in opex of ~3-4
Slide 8: Financials
Financials 8
Slide 9: Operating revenues
Operating revenues Operating revenues and EBITDA (USD million) 70 ▪ Charter income of USD 19.2 million in Q2, 60 reflecting lower utilisation 8 14 ‒ USD 1.8 million standby fee for Safe Boreas 50 53 50 included as other revenue 40 4 ▪ Good operational performance 30 35 ‒ 100% commercial uptime for S
Slide 10: Income statement
Income statement (Unaudited figures in USD million) Q2 2023 Q2 2022 6M 2023 6M 2022 12M2022 ▪ Operating result before depreciation Operating revenues 21.0 60.9 35.3 96.4 198.9 (EBITDA) of negative USD 9.8 million Operating expenses (30.8) (38.1) (51.5) (68.8) (137.5) Operating results before ‒ OPEX
Slide 11: Balance sheet
Balance sheet (Unaudited figures in USD million) 30.06.23 30.06.22 31.12.22 ▪ Total assets of USD 490.8 million at end Q2 Vessels 389.7 389.3 376.8 2023 New builds 0.0 0.0 0.0 Other non-current ▪ Cash position decreased to USD 75.2 million assets 1.3 1.6 1.2 Total non-current assets 391.0 390.9 378.
Slide 12: Operating cash flow in Q2 2023
Operating cash flow in Q2 2023 Cash flow in the quarter (USD million) ▪ Negative operating cash flow of USD 7.5 million ▪ Proceeds of USD 28.1 million from the private placement in May ▪ Strong support from existing and new shareholders demonstrated by oversubscribed May private placement ▪ Capex of
Slide 13: Debt profile with first major maturity end-2025
Debt profile with first major NIBD development (USDm) maturity end-2025 367 348 331 346 345 ▪ Favourable terms on debt facilities with limited fixed amortization and low interest 75 92 75 75 58 rate ‒ Main-tranche: 2.5%+ Credit Adjustment Spread Q2'22 Q3'222 Q4'22 Q1'23 Q2'23 + SOFR, maturing 31 Dec
Slide 14: Market and outlook
Market and outlook a i IN 1
Slide 15: Significant tightening of market balance for high end vessels
Significant tightening of market balance for high end vessels Stable fleet1 Increasing demand (# of vessel years)1 Global accommodation vessel utilisation2 28 28 100% 27 26 26 90% 25 24 24 23 80% 21 70% 17 16 60% 50% 14 13 13 13 13 13 12 40% 10 11 11 11 10 30% 8 8 9 6 20% 4 10% 0% 2010 2012 2014 201
Slide 16: Dayrates are picking up as the market is tightening
Dayrates are picking up as the market is tightening Brazil day rate development (USD/d) North Sea day rate development (USD/d) 200 000 400 000 180 000 350 000 160 000 Latest datapoint 300 000 140 000 117k Latest datapoint at 190k 250 000 120 000 Latest contract 100 000 200 000 Latest contract 80 000
Slide 17: Strong development in North Sea demand drivers
Strong development in North Sea demand drivers North Sea activity (# of vessel years) Historical PDO’s1) delivered and well-count on the NCS Well count No. PDO’s 7 160 14 6 140 12 5 120 10 4 100 8 80 3 6 60 2 4 40 1 2 20 0 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2012 201
Slide 18: Increasing flotel demand in Brazil
Increasing flotel demand in Brazil Brazil activity (# of vessel years) Number of FPSOs working in Brazil 10 9 Actual activity 70 lower than 67 8 65 illustrated 62 62 61 61 60 7 due to Covid-19 55 56 54 53 51 6 47 46 44 5 40 35 33 4 3 2 1 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Slide 19: High contract activity driving improved utilisation
High contract activity driving improved utilisation ▪ Limited North Sea activity for 2023, new tenders Firm Expected Year Option(s) Region award Expected vessel / type expected in Q3/Q4 for 2024 and 2025 requirements Duration timing ▪ Safe Boreas is the only DP3 semi-submersible vessel 2024 0.6 - 1.
Slide 20: Indicative earnings potential in an improving market
Indicative earnings potential in an improving market Fleet EBITDA potential Historical EBITDA/vessel1 for Prosafe vessels per region Average1 Average1 Peak1 70 USD million 2011-22 2011-16 2014-15 61 60 56 54 ~110K ~145K ~160K Implied day-rate – 365 days contract Brazil 49 ~175K ~245K ~280K Implied d
Slide 21: Summary
Summary 21
Slide 22: Summary
Summary ▪ Positive development in mid-and long-term demand drivers in Brazil and North Sea (UK and Norway) ▪ Increased tender activity for 2024 and beyond ▪ Slow 2023 North Sea market with low visibility ▪ H1 2023 was a transition period, preparing vessels for contract start-up, with utilisation exp
Slide 23: Appendix
Appendix 23
Slide 24: Option to take delivery of two newbuilds available at yard
Option to take delivery of two newbuilds available at yard ▪ Prosafe has option to take delivery of the only two DP3 newbuild semis available at yard ‒ 500 POB and suited for Petrobras requirements ‒ Long-term contracts at higher than prevailing day rates required to justify delivery ‒ Ongoing dialo
Slide 25: Analytical information
Analytical information Item 2023 (USDm) Comment SG&A ~17-181 In a tightening market SG&A is likely to increase somewhat Depreciation ~30-33 Straight line depreciation Interest expense ~26-30 Exposed to rising interest rates Tax ~2 Norwegian deferred tax assets of USD 1.9 bn, local and contract speci
Slide 26: Prosafe recent firm period fixtures
Prosafe recent firm period fixtures Vessel Client Award date Start Finish # months Region Positioning Work type Day rate Total Award Safe Zephyrus Petrobas Des-22 May-23 Feb-25 21 Brasil DP H&M $112 500 $73 125 000 Safe Concordia Confidential Oct-22 Jul/Oct-23 Jun/Sep-24 11 US GoM DP HUC $93 500 $33
Slide 27: SG&A and Opex increasing driven by inflationary pressure
SG&A and Opex increasing driven by inflationary pressure SG&A1 cost development (USDm) Opex per day (USDk/day) 45 9 UK (DP – Boreas/Zephyrus) $35 – 45k 40 40 41 40 8 UK (Moored - Caledonia) $25 – 30k 35 7 30 6.7 6.7 30 6 Brazil*** $50 – 54k (incl. fuel) 25 5.9 22 21 19 5 Norway (DP – Boreas/Zephyrus
Slide 28: Historic SPS and maintenance capex
Historic SPS and SPS and maintenance capex (USDm)1 maintenance capex 18 16 14 15 15 16 16 14 17 2.4 3.0 2.5 11 10 12 2.0 10 ▪ Maintenance capex of ~USD 1-2 million per 10 8 1.7 1.8 1.5 vessel per year. Higher in Brazil than North 1.6 8 1.3 1.4 1.4 6 1.3 1.0 Sea and increasing over time 4 1.2 0.9 3 0
Slide 29: Outstanding debt
Outstanding debt Two tranches Main tranche COSCO Sellers Credit Debt maturity profile Outstanding debt $343m (250m + 93m Notos) $93m Pledged vessels Boreas, Zephyrus, Caledonia, Concordia, Eurus Scandinavia, Notos Interest rate SOFR + Credit Adjustment Spread* + 0% (increase to 2% from 2026) 2.5%. U
Slide 30: Tax
Tax ▪ Prosafe SE is a permanent tax resident in Norway. As at end 2022, the company has deferred tax assets of approximately USD 1.9 billion, which can be utilized as tax deduction in the future and is not recognized in the accounts ▪ The company will from time to time operate in countries where loc
Slide 31: We are headquartered in Norway and have offices in the UK, Brazil and Singapore
We are headquartered in Norway and have offices in the UK, Brazil and Singapore Head office: Forusparken 2 N-4031 Stavanger Norway prosafe.com