Prosafe Se · OSL:PRS

Prosafe — Q2 2017 Earnings Presentation

28 slides from Prosafe's earnings presentation, Aug 24, 2017

  1. Slide 1: Q2 2017 results and market update

    24 August 2017 Q2 2017 results and market update

  2. 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.

  3. Slide 3: Agenda

    Agenda  Highlights  Financial results and guidance  Plan the work – work the plan  Status and outlook  Summary 3

  4. Slide 4: Highlights

    Highlights  Good operating performance  Safety focus – zero mindset – no compromise  Utilisation of 38.5 per cent in the quarter  Q3 event: Safe Notos off hire for 35 days for preventative repair and maintenance of gangway  Safe Boreas commenced firm 13 month contract early August for Statoil a

  5. Slide 5: Agenda

    Agenda  Highlights  Financial results and guidance  Plan the work – work the plan  Status and outlook  Summary 5

  6. Slide 6: Income statement

    Income statement (Unaudited figures in USD million) Q2 17 Q1 17 Q2 16 6M 17 6M 16 2016 Operating revenues 61.7 75.7 115.4 137.4 218.4 474.0 Operating expenses (37.3) (44.9) (53.8) (82.2) (111.5) (220.8) EBITDA 24.4 30.8 61.6 55.2 106.9 253.2 Depreciation (33.8) (33.4) (29.1) (67.2) (52.5) (115.7) Im

  7. Slide 7: Balance sheet

    Balance sheet (Unaudited figures in USD million) 30.06.17 31.03.17 31.12.16 30.06.16 Goodwill 226.7 226.7 226.7 226.7 Vessels 1 967.0 1 997.8 2 029.3 1 559.0 New builds 124.9 123.3 122.2 654.9 Other non-current assets 12.3 13.9 13.9 4.3 Total non-current assets 2 330.9 2 361.7 2 392.1 2 444.9 Cash a

  8. Slide 8: EBITDA and capex guidance

    EBITDA and capex guidance Current guidance 2017 EBITDA Ca. MUSD 120 1) Capex per year MUSD 10-15 2) 1) May vary with currency movements 2) Incl. SPS for the Safe Caledonia 8

  9. Slide 9: Agenda

    Agenda  Highlights  Financial results and guidance  Plan the work – work the plan  Status and outlook  Summary 9

  10. Slide 10: TSV Safe Scandinavia – Westcon dispute

    TSV Safe Scandinavia – Westcon dispute  Court proceedings commenced 22 August 2017  The yard’s budget for the work matured to approx. NOK 1.07 billion after several revisions  Total cost claimed by yard approx. NOK 2.4 billion • Prosafe has already paid approx. NOK 2.1 billion • Yard has claimed

  11. Slide 11: Contributing to fleet renewal and high-grading

    Contributing to fleet renewal and high-grading 11

  12. Slide 12: Fleet renewal – controlling new builds at COSCO

    Fleet renewal – controlling 3 new builds at COSCO  Negotiations with COSCO regarding Nova, Vega and Eurus ongoing • The standstill agreement between Prosafe and COSCO related to Safe Nova and Safe Vega has been extended until December 2017  Looking for optionality and value creation potential from

  13. Slide 13: Protecting the runway

    Protecting the runway 250  Good cash flow generation Cash actual Q2 2017 • Reduced cost and capex 200 ~ Cash neutral EBITDA level  Cash neutral at EBITDA of approx. 150 USD 100 million1) 100 50 0 1) 2017 is, however, impacted by USD 30 million repayment of sellers credit to Jurong in June. On the

  14. Slide 14: Agenda

    Agenda  Highlights  Financial results and guidance  Plan the work – work the plan  Status and outlook  Summary 14

  15. Slide 15: Johan Sverdrup contract - building order book and longevity

    Johan Sverdrup contract - building order book and longevity  Will provide longevity of operations for the Safe Zephyrus and generate firm cash flow in a soft market  Statoil has nominated the 12 month firm period with start-up 1 June 2018 +/- 30 days • Firm contract value of MUSD 53 and this inclu

  16. Slide 16: TSV Safe Scandinavia

    TSV Safe Scandinavia  Firm contract with Statoil till summer 2018 at Oseberg on the NCS  Strong operational and technical performance • Drilling program well ahead of plan  Focus on Safety & Compliance  Focus on positioning the TSV Safe Scandinavia towards and beyond 2018 • Unique vessel charact

  17. Slide 17: Contract portfolio

    Contract portfolio Firm order book at end Q2 2017 of approx. MUSD 443 17

  18. Slide 18: Outlook

    Age of fixed facilities in the North Sea Outlook  For the near term, continued oil price volatility and low E&P spending are causing uncertainty  In the longer term, a combination of cost Number of fixed facilities reduction, the low reserve replacement in the North Sea Latest year of ratios and a

  19. Slide 19: Prospects and tendering

    Prospects and tendering Tenders and Prospects - outlook is generally three years  The near term market activity in terms of bidding is reduced compared to April this year • Compared to April, some tenders, like Johan Sverdrup has been awarded and some tenders have been cancelled • Current tenders p

  20. Slide 20: Proactive in restructuring of industry

    Proactive in restructuring of industry Regalia (’85/’09) «Next phase Fleet renewal Engaging in M&A: restructuring» Growth and and rightsizing: consolidation: 1. Acq. Of 1.Consolidation Creation: 1. Renewal Nova/Vega 2. More scrapping 1. Acq. of Discoverer ASA 2. Conversion to Merger between 2. Acq.

  21. Slide 21: Position and strategy

    Position and strategy  Prosafe is restructured – financially and organisationally  Cost and capex reductions protect runway in a lower for longer scenario  69% of current order book available for 2018 onwards  Prosafe is well positioned across a global market  TSV niche and bespoke characterist

  22. Slide 22: Agenda

    Agenda  Highlights  Financial results and guidance  Plan the work – work the plan  Status and outlook  Summary 22

  23. Slide 23: Summary

    Summary  Good operating performance  Safety focus – zero mindset – no compromise  Utilisation of 38.5 per cent in the quarter  Q3 event: Safe Notos off hire for 35 days for preventative repair and maintenance of gangway  Safe Boreas commenced firm 13 month contract early August  Statoil nomina

  24. Slide 24: Appendix

    Appendix @ Prosafe

  25. Slide 25: Operating revenue

    Operating revenue (USD million) Q2 17 Q1 17 Q2 16 6M 17 6M 16 2016 Charter income 56.3 66.3 109.1 122.6 165.3 375.5 Mob/demob income 1.3 1.1 0.5 2.4 14.4 34.0 Other income 4.1 8.3 5.8 12.4 38.7 64.5 Total 61.7 75.7 115.4 137.4 218.4 474.0 25

  26. Slide 26: Update on vessel's cost per day

    Update on vessel’s cost per day  CPD in operation being reduced by an average of ca. 30% since 2014 Opex (CPD k/d)* NCS/UK NCS (TSV) UKCS Brazil (figures in USD) DP Moored Moored DP 2014 75-80/60-65 100-105 50-55 60-65 2017e 60-65/40-45 85-90 30-35 40-45 % reduction 19%/32% 15% 38% 32% * Excl. fuel

  27. Slide 27: Update on cost and capex

    Update on cost and capex 2011-2015 Initial target annual Run rate levels average (May 2017) levels Offshore opex1) USD 180m USD 140 – 150m USD 130 – 140m Onshore opex USD 40m USD 28-30m USD 22m (-25-30%) (-45%) Annual fleet USD 60m USD 20-30m USD 10-15m capex2) Headcount 35-40% onshore Ca. 50% onsho

  28. Slide 28: Order book

    2017 2020 2018 2019 31 % 6% 48 % 15 % Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Firm order book at end Q2 2017 of approx. MUSD 443 Q1 16 Q4 15 Q3 15 Q2 15 Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Q4 13 Q3 13 Firm contracts Firm contracts Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Q4 11 Q3 11 Order book Q2 11 Q1 11 Q4 10 Q3 10 Q2

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