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May 28, 2014 Prosafe SE: First quarter 2014 resultsOperating profit for the first quarter came to USD 22.9 million and net profit amounted to USD 18.3 million. An interim dividend of NOK 0.95 per share was resolved. The gross value of the contract backlog amounted to approximately USD 2.5 bn (incl. options) at the end of the quarter, by far the highest level ever seen in Prosafe's history. Financials Operating profit for the first quarter amounted to USD 22.9 million (USD 19 million). Utilisation of the fleet was 76 per cent (74 per cent). Safe Caledonia, Safe Astoria, Safe Concordia, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia and Safe Regency were in full operation throughout the quarter. Safe Concordia was on contract in Brazil with an average effective day rate in the quarter of approximately USD 136 000. Safe Caledonia completed operations for BP on 31 March. The vessel is currently at Burntisland in the UK for preparatory work before mobilising for a contract with Nexen in the UK commencing early June 2014. Regalia completed the planned yard work and a five-year special period survey (SPS) at Keppel Verolme and commenced operation for Statoil in Norway on 28 February. Safe Scandinavia remained at the Remontowa yard in Poland undertaking a life extension refurbishment and a five-year SPS before it commenced a contract with Statoil in Norway late April 2014. Safe Bristolia undertook maintenance work at Burntisland in the UK during the quarter, and commenced a contract with ConocoPhillips in May 2014. Safe Astoria continued its operation for Swiber in Indonesia throughout the first quarter. In addition, Prosafe and Swiber have agreed an extension period of 43 days which commenced early April 2014. Net financial expenses for the first quarter were USD 4 million (USD 18.6 million). The reduction is mainly related to favourable revaluation of forward exchange contracts. Net profit amounted to USD 18.3 million (net loss of USD 0.7 million), and earnings per share were USD 0.08 (USD 0.00). Total assets at 31 March amounted to USD 1 597.5 million (USD 1 459.2 million), while the book equity ratio rose to 43.9 per cent (42 per cent). Net interest-bearing debt stood at USD 728.9 million (USD 608.1 million). Dividend Financing Outlook Over the past few years there has been a strong growth in demand related to hook-up and commissioning of new production installations in the North Sea. The activity level in this area is set to remain high for the next couple of years, but based on the oil companies' announced plans and schedules, the pace of new developments seems to be slowing down beyond 2016. However, with an aging infrastructure combined with a continuous drive for higher recovery rates, demand for accommodation vessels in the North Sea should remain at a robust level in the foreseeable future. As a result of increased activity in shallow waters in Mexico, the market has developed positively over the past few years. This development is expected to continue based on the number of drilling jack-ups scheduled to enter the market. Recently introduced reforms are expected to open up for international oil companies in Mexican waters and as such are supportive for the long-term outlook in deep water areas. Demand in the Brazilian market continues to require accommodation vessels with Petrobras having increased its requirements from zero accommodation vessels under contract in 2010, to nine vessels currently under contract. So far, all the vessels are deployed in the Campos basin, but it is anticipated that demand will also emerge from other areas in the future. The strong demand growth in Brazil has attracted new suppliers. This has resulted in a competitive and fragmented market (the nine contracted vessels are owned by eight different companies). It is therefore difficult not only to realise economies of scale and establish efficient cost structures, but also to achieve the desired level of return in the Brazilian market despite the strong demand growth. Although there are signs of increasing day rates, it is likely that returns in the Brazilian market remain below the returns in other core markets over the next few years. Prosafe is the world's leading owner and operator of semi-submersible accommodation/service rigs. Operating profit reached USD 245.1 million in 2013 and net profit was USD 199.1 million. The company operates globally, employs 610 people and is headquartered in Larnaca, Cyprus. Prosafe is listed on the Oslo Stock Exchange with ticker code PRS. For more information, please refer to www.prosafe.com. For further information, please contact: Karl Ronny Klungtvedt, Chief Executive Officer Cecilie Helland Ouff, Senior Manager Finance and Investor Relations
Q1 2014 report Q1 2014 presentation |