November 05, 2014 Prosafe SE : Third quarter 2014 resultsFinancials Operating profit for the third quarter amounted to USD 93 million (USD 90.4 million). This quarterly result is the highest ever in Prosafe's history. Utilisation of the vessels was 96 per cent (91 per cent). Safe Scandinavia, Safe Caledonia, Safe Concordia, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia and Safe Regency were in full operation throughout the quarter. Safe Concordia is operating on a three-year contract with Petrobras in Brazil. The average effective day rate in the third quarter was approximately USD 158,000. Regalia completed the work for Statoil at the Grane field in Norway in early-August and commenced the contract with Talisman for accommodation support at the Montrose field in the UK in late-August. Safe Bristolia was off-hire for 9 days between completion of the contract with ConocoPhillips at the Judy field in the UK and commencement of the work for BG Group at the Everest field. Operation of the vessel was suspended in mid October due to storm damage to her lifeboats and the vessel has been demobilised for repair works to be carried out. Safe Astoria completed its Indonesian operations for Swiber in May. In mid-July, the vessel commenced mobilisation to the Malampaya field in the Philippines, with the firm contract period of 11 months starting 1 August. Net financial costs amounted to USD 17.7 million (USD 3.4 million). This change is mainly due to revaluation of forward exchange contracts. Net profit equalled USD 67.4 million (USD 85.2 million), corresponding to diluted earnings per share of USD 0.29 (USD 0.36). Total assets at 30 September amounted to USD 1 769 million (USD 1 543 million). Net interest-bearing debt equalled USD 773.3 million (USD 613.7 million), while the book equity ratio declined to 41.1 per cent (45.7 per cent). Dividend Dividend policy The exact level of dividend to be paid in each period will depend on the supply/demand balance in the market, the investment level and the overall financial position of the Group. On the basis of a faster fleet growth, the Board will normally target a pay out ratio in the range of 40 to 60 per cent of the preceding year's net profit. In periods with exceptional conditions the pay-out ratio may be outside that range. Guidance for the coming period New builds Delivery of the first vessel, Safe Boreas, is on track for delivery during the fourth quarter, giving adequate time for mobilisation for the first contract, commencing in April/May 2015. Its sister vessel, Safe Zephyrus, will be ready for operations during the summer of 2015. Construction of the Safe Notos and Safe Eurus at COSCO Quidong in China is progressing as planned and the vessels should be ready for operations during the first and second half of 2016 respectively. Outlook As a result of E&P companies' spending and cost cutting initiatives there has been a softening of demand for accommodation vessels in the North Sea region. Several projects both in Norway and in the UK have been descoped and/or postponed, resulting in a temporary reduction in demand for accommodation support. Overall, this will most likely lead to a reduction in the North Sea contract inflow going forward, compared to the levels experienced during the past two to three years. The demand outlook in Mexico remains positive. The activity level in shallow waters is high, evidenced by substantial growth in the number of drilling jack-ups under contract in the region. This bodes well for continued robust demand for accommodation support services in the short-to-medium-term. The recently introduced energy reform in Mexico should encourage increased exploration and, eventually, development activity in the deep-water areas. Although this does not affect demand for accommodation support services in the near-term, it represents substantial potential opportunities in the longer-term. The outlook for further demand growth in Brazil is positive and there should be potential for further contract awards in the coming year. However, the Brazilian market is characterised by a crowded and fragmented supply side. Accordingly, competition for contracts will continue to be strong. 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 650 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. Larnaca, 5 November 2014 For further information, please contact: Karl Ronny Klungtvedt, Chief Executive Officer Q3 2014 report Q3 2014 presentation |