Prosafe Se · OSL:PRS
Prosafe — Q3 2015 Earnings Presentation
27 slides from Prosafe's earnings presentation, Nov 5, 2015
Slide 1: Q3 2015 results
5 November 2015 Q3 2015 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 3
Slide 4: Recent developments
Recent developments Contract inflow of approx. USD 260 million in the quarter Q3 utilisation of 81 per cent Eight vessels were fully contracted during the quarter In light of the near term reduction in industry activity levels, it has been decided to temporarily suspend dividend payments 4
Slide 5: Agenda
Agenda Recent developments Financial results Operations/projects Outlook 5
Slide 6: Income statement
Income statement (Unaudited figures in USD million) Q3 15 Q2 15 Q3 14 9M 15 9M 14 2014 Operating revenues 154.1 92.5 169.5 370.8 394.6 548.7 Operating expenses (56.5) (51.0) (59.9) (159.3) (175.9) (236.1) EBITDA 97.6 41.5 109.6 211.5 218.7 312.6 Depreciation (26.3) (18.7) (16.6) (62.0) (47.8) (64.3)
Slide 7: Operating revenues
Operating revenues (USD million) Q3 15 Q2 15 Q3 14 9M 15 9M 14 2014 Charter income 139.9 80.0 148.8 331.7 344.0 481.2 Mob/demob income 2.1 0.8 3.0 3.9 7.8 8.8 Other income 12.1 11.7 17.7 35.2 42.8 58.7 Total 154.1 92.5 169.5 370.8 394.6 548.7 7
Slide 8: Balance sheet
Balance sheet (Unaudited figures in USD million) 30.09.15 30.06.15 30.09.14 31.12.14 Goodwill 226.7 226.7 226.7 226.7 Vessels 1 698.3 1 611.5 1 004.1 1 027.3 New builds 213.6 211.1 293.7 311.8 Other non-current assets 5.5 6.0 5.2 5.7 Total non-current assets 2 144.1 2 055.3 1 529.7 1 571.5 Cash and
Slide 9: Debt profile
Debt profile 500,0 ~ NOK bond loans (total USD 313 million as at 30 Sept 2015) 450,0 + mUSD 288 million credit facility (2014-21) @ USD 1,300 million credit facility (2015-22) 400,0 - 350,0 - 300,0 - nN peal o o L , USD million nN Qo Oo oO 1 ? 150,0 ~ 100,0 - 50,0 - 0,0 1 Q1 Q2 03 24 Ql Q2 O38 OA Ql
Slide 10: Adjustment mechanism in bank covenant leverage ratio
Adjustment mechanism in bank covenant leverage ratio Leverage ratio is reported with certain adjustments EBITDA contribution from new builds or acquired vessels that have not been in operation for a full year is annualised and debt related to new builds under construction is excluded Reported levera
Slide 11: Temporary suspension of dividend payments
Temporary suspension of dividend payments The company believes that this will be beneficial for the company, both from a commercial, financial and strategic perspective, and it will improve financial robustness and optionality The company reaffirms the long-term dividend policy as described in the Q
Slide 12: Agenda
Agenda Recent developments Financial results Operations/projects Outlook 12
Slide 13: High fleet utilisation in the third quarter
High fleet utilisation in the third quarter Utilisation rate of 81 per cent in the quarter Eight vessels were fully contracted 13
Slide 14: New build update
New build update Construction of the new builds is progressing within the timeframes previously communicated Capex forecasts remain as previously guided Advanced and flexible vessels for North Sea and worldwide operations DP and moored capabilities Contracts in place for clients in the North Sea and
Slide 15: Safe Scandinavia TSV project
Safe Scandinavia TSV project 3 years firm (+4 years of options) contract with Statoil as a Tender Support Vessel (TSV) at Oseberg Øst in Norway Arrived at Westcon yard in Norway for TSV conversion in March Operations expected to commence towards the end of Q4 2015 15
Slide 16: Capital expenditure 2015
Capital expenditure 2015 Maintain previous guidance of capital expenditure in 2015 of up to USD 900 million Major capex items in 2015 New builds Safe Scandinavia TSV conversion Safe Concordia SPS and upgrade Safe Bristolia repair work 16
Slide 17: Agenda
Agenda Recent developments Financial results Operations/projects Outlook 17
Slide 18: Near-term demand drying up as projects are temporarily postponed
Near-term demand drying up as projects are temporarily postponed Based on firm contracts, extension options, projects in the tendering phase and prospects likely to go to tender in the next 36 months. Index based on number of days in demand. Q4 11 = 100 Source: Prosafe 18
Slide 19: Activity level forecasted to rebound in 2018 when cost levels have been reduced
Activity level forecasted to rebound in 2018 when cost levels have been reduced Source: Norwegian Ministry of Finance Index based on the industry total capex and the cost level going forward Lower cost – Higher activity (given same capex) Peak cost level assumed in 2014 25% cost reduction assumed by
Slide 20: North Sea – expect increase in activity from 2018
North Sea – expect increase in activity from 2018 Projects have been postponed Cost reduction is crucial to improve the competitiveness of the North Sea E&P companies are stating they are seeing cost reductions for future projects in the range of about 20-25 per cent In addition the NOK depreciation
Slide 21: Mexico – short-term uncertainty
Mexico – short-term uncertainty Safe Britannia has received a contract extension until end December 2015 Short /medium term uncertainty Prosafe has been informed that Pemex payment terms will be up to 180 days until further notice from September 2015 Safe Hibernia continues to be deployed on the Jas
Slide 22: Brazil – three-year contract awarded in Q3
Brazil – three-year contract awarded in Q3 Three-year contract signed in August with Petrobras Short term, Petrobras focuses on reducing costs Long term outlook remains positive for high end vessels Recent tender only allowed DP semi- submersibles 22
Slide 23: How is Prosafe placed to handle the down-turn?
How is Prosafe placed to handle the down-turn? Vessels Large and versatile fleet High quality vessels Fleet renewal and new builds Operations and organisation By far the largest operator in high-end offshore accommodation Unmatched operational track-record from accommodation operations worldwide Hig
Slide 24: What is Prosafe doing to handle the down-turn?
What is Prosafe doing to handle the down-turn? Vessels (capex) Long-term planning of fleet investments to ensure optimal capital allocation both short and long term Operations and organisation (opex) Substantial operating cost reduction as a consequence of activity level adjustments, natural currenc
Slide 25: Contract coverage
Contract coverage Safe Zephyrus [ | | a Safe Boreas | | _ — Safe Scandinavia | EE ee ee ee Safe Notos — | Safe Eurus | | sae coeds i a a a safe Priston a a a ol | Safe Astoria I = a oo ry Safe Concordia ——— | Safe Hibernia ] | | | | Safe Britannia ——— as = Safe Regency | | Safe Lancia HR | | | | | |
Slide 26: Contract backlog robust
Contract backlog robust Increased backlog end Q3 compared to previous quarter Gross value of charter contracts Status end Q3 15 2 500 Firm contracts USD 1084 + Options (1) USD 621 = Total USD 1705 2 000 Options Letter of Intent Firm contracts USD million 1 500 1 000 500 0 Q2 08 Q3 08 Q4 08 Q1 09 Q2
Slide 27: Summary
Summary The oil and gas services market remains challenging near term Increase in activity is expected from 2018 onwards Prosafe is well placed in the competitive landscape with a high quality and versatile fleet and an unmatched operational track record 27