Subsea 7 S.a. · OSL:SUBC
Subsea 7 — DSND — Q1 2004 Earnings Presentation
22 slides from Subsea 7's earnings presentation, Apr 28, 2004
Slide 1: DSND Inc Presentation 1 Quarter 2004
DSND Inc Presentation 1 Quarter 2004 28 April 2004
Slide 2: Profit and Loss Account 1Q 2004 – DSND Inc
Profit and Loss Account 1Q 2004 – DSND Inc (Unaudited figures in USD 1,000) 1 Q 2004 1 Q 2003 2003 Operating revenue 5 467 8 975 37 964 Operating expenses -4 590 -8 077 -36 111 Ordinary depreciation -440 -1 186 -8 685 Total operating expenses -5 030 -9 263 -44 796 Net operating result 437 -288 -6 83
Slide 3: Operational improvements in 1Q 2004 vs. 1Q 2003
Operational improvements in 1Q 2004 vs. 1Q 2003 Subsea 7: • EBITDA improved by USD 6.6 million (excluding USD 2.0 million of non-recurring items) DSND – other activities: • Operational improvement of USD 1.6 million 3
Slide 4: Balance sheet 1Q 2004 – DSND Inc
Balance sheet 1Q 2004 – DSND Inc (Unaudited figures in USD 1,000) 31.03.2004 31.03.2003 31.12.2003 Fixed assets Intangible fixed assets 6 398 6 146 6 540 Tangible fixed assets 8 115 17 543 8 431 Investment in affiliated companies 79 046 94 788 102 225 Other financial fixed assets 935 145 1 054 Total
Slide 5: DSND – Other activities
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Slide 6: DSND – Other activities
DSND – Other activities z Joides Resolution • 50/50 owned with Transocean • Started on contract to to JAPEX (Japanese Petroleum Exploration Company) 18 January 2004. Contract runs until mid-May 2004. • New contracts actively being pursued. z Big Orange • Well maintenance vessel, 41% owned • Contract
Slide 7: DSND – Other activities – 1Q 2004
DSND – Other activities – 1Q 2004 Improvement in 1Q 2004 vs. 1Q 2003 due to: • Better margin on supply fleet and Joides Resolution • All vessels/projects with operating losses in 2003 have been sold/terminated: z Olympic Princess (redelivered in 1Q 2004) z Buccaneer (sold in 4Q 2003) z Atria, Helder
Slide 8: Subsea 7
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Slide 9: Profit and Loss Account 1Q 2004 – Subsea 7
Profit and Loss Account 1Q 2004 – Subsea 7 (Unaudited figures in USD million) 1Q 2004 1Q 2003 2003 Operating income 145,2 107,8 724,4 EBITDA -11,8 -16,4 34,8 Depreciation & Amortisation -13,8 -12,2 -49,8 Impairment and write-off -8,9 0,0 -3,1 EBIT -34,5 -28,6 -18,1 Exchange gain/(loss) 0,3 1,8 0,0 I
Slide 10: Balance sheet 1Q 2004 – Subsea 7
Balance sheet 1Q 2004 – Subsea 7 (Unaudited figures in USD million) 31.03.2004 31.03.2003 31.12.2003 Fixed Assets Intangible Assets 7,3 17,9 14,9 Tangible assets 309,3 342,6 320,0 316,6 360,5 334,9 Current Assets Other current assets 201,4 158,5 214,3 Cash in bank 30,6 32,9 34,0 232,0 191,4 248,3 To
Slide 11: Subsea 7 – 1Q 2004 vs. 1Q 2003
Subsea 7 – 1Q 2004 vs. 1Q 2003 z Improvement in EBITDA of USD 4.6 million (including USD 2.0 million in one time expenses related to the cancelled ROV-deal). Main reasons for the improvement: • Better technical performance on vessel fleet • Higher utilisation of vessel fleet. z Impairment and write-
Slide 12: Subsea 7 – financial position
Subsea 7 – financial position z Bank debt reduced from initial USD 200 million to USD 160 million through scheduled instalments and sale of vessels z Financial lease obligations reduced from initial USD 26 million to USD 7 million through instalments and purchase of assets z Liquidity USD 31 million
Slide 13: The ROV Drill rig support business
The ROV Drill rig support business • In December 2003, Subsea 7 signed an agreement with Oceaneering International Inc for the sale of the ROV drill rig support business. The transaction was subject to due diligence and other conditions. • In March 2004, Subsea 7 and Oceaneering mutually agreed that
Slide 14: Subsea Market – Backlog and Market outlook
Market outlook Subsea Market – Backlog and Market outlook 14
Slide 15: Backlog 1Q 2004 – Subsea 7
Backlog 1Q 2004 – Subsea 7 z Subsea 7 had at the end of 1Q a worldwide order book of approx USD 501 million, of which USD 323 million for execution in 2004. z Geographical split of the Backlog: UK USD 172 million West-Africa USD 86 million Asia Pacific USD 71 million Norway USD 66 million GoM USD 57
Slide 16: New contracts
New contracts z USD 15 million pipelay contract for Wintershall in Dutch sector (announced 27 April 2004) z Letter of Intent received from Petrobras for Lochnagar: • One year charter form June 2004 • Subject to Petrobras Board approval 16
Slide 17: Status of the oil market
Status of the oil market z Analysis of oil market show that the world needs more oil and needs to develop more fields: • Increase in oil demand forecasted by most analysts • Oil companies have spent comparably less on E&P last three years, do not believe this is a trend shift • High depletion rate f
Slide 18: Market outlook • Norway
Market outlook • Norway • Increased drilling activity compared to last year will have a positive effect on the long-term market picture. • Subsea activity expected to improve for the 2005-2008 period with several key prospects yet to be awarded. • Subsea 7 Norway has established a solid position in
Slide 19: Market outlook • UK
Market outlook • UK • Subsea activity in 2004 in the UK sector of the North Sea expected to remain at levels similar to 2003. Looking forward to 2005 and 2006, total opex spending should remain fairly constant, in the region of USD 6.5 billion. • Subsea capital expenditure forecasted to decrease fro
Slide 20: Market outlook • Brazil • Asia Pacific
Market outlook • Brazil • Large investments planned not only in deeper water, but also in re-development of mature fields leading to an increasing demand for opex support. • Subsea capital expenditure is expected to be at an annual level of USD 2.0 billion long-term • Asia Pacific • Subsea capital e
Slide 21: Market outlook • Gulf of Mexico • West-Africa
Market outlook • Gulf of Mexico • Subsea capital expenditure expected to fluctuate between USD 1.5 billion and USD 1.8 billion in years 2004 - 2007. • The number of projects expected to rise in the medium term reflecting an increasing proportion of smaller projects; however, the regional market in 2
Slide 22: Summary market view
Summary market view • 2004 will be an intermediate year • Long term outlook for industry remains positive • Encouraged by high level of bid activity • Capacity for major types of equipment beginning to be tied up for 2005-2006 22