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February 09, 2015 Prosafe SE : Fourth quarter 2014 resultsOperating profit for the fourth quarter came to USD 77.4 million and net profit amounted to USD 51.0 million. The utilisation of the fleet was 92 per cent in the fourth quarter. An interim dividend of NOK 0.36 per share was resolved. Financials Full year 2014 Operating profit for 2014 amounted to USD 248.3 million (USD 245.1 million), with utilisation of the fleet rising to 87 per cent (83 per cent). Net financial expenses for 2014 amounted to USD 57 million (USD 41.3 million). The main reason for this increase is fair value adjustments of currency forward contracts. In accordance with IFRS, interest costs totalling USD 7.9 million (USD 4.5 million) have been allocated to new build and refurbishment projects, and consequently capitalised as part of the vessel costs. Net profit for 2014 equalled USD 178.8 million (USD 199.1 million) and diluted earnings per share were USD 0.76 (USD 0.85). Operating profit for the fourth quarter amounted to USD 77.4 million (USD 67 million). Utilisation of the fleet was 92 per cent (82 per cent). The rise in operating profit is mainly due to the increased utilisation. Safe Caledonia, Safe Scandinavia, Regalia, Safe Concordia, Safe Astoria, 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 fourth quarter was approximately USD 162,000. As announced previously, Safe Bristolia sustained damage to lifeboats after experiencing bad weather during work at the Everest field in UK in early October. Operations were suspended, and the vessel was brought to a shipyard in Norway to carry out repair work. A provision of USD 7.5 million has been made in the fourth quarter accounts to cover extra-ordinary expenses related to the Safe Bristolia incident. Net financial costs amounted to USD 25.3 million (USD 6.8 million). This increase is mainly due to a fair value adjustment of currency forward contracts. Net profit equalled USD 51 million (USD 59.7 million), corresponding to diluted earnings per share of USD 0.22 (USD 0.25). Total assets at 31 December amounted to USD 1 817 million (USD 1 618 million). Net interest-bearing debt equalled USD 707.7 million (USD 666.2 million), while the book equity ratio declined to 41.2 per cent (45.7 per cent). Refinancing Prosafe has entered into a new USD 1,300 million loan facility for the refinancing of the existing USD 1,100 million and USD 420 million facilities. The new loan has a seven-year tenor and an interest rate of LIBOR plus 1.90 per cent for the first five years and LIBOR plus 2.15 per cent thereafter. Despite the falling oil price and challenging market conditions, the new loan facility has been entered into on improved terms and conditions, including both a lower interest rate and longer maturity and repayment profile than the refinanced facilities. This demonstrates the strength of Prosafe's reputation in the credit markets and the banks' strong commitment to the company. With the new facility, Prosafe has put in place a robust long-term funding structure, with financial flexibility and lower refinancing risk for the coming years. This should further strengthen the company's leading position in the global accommodation support vessel market. Dividend The Board of Directors has resolved to declare an interim dividend equivalent to USD 0.048 per share to shareholders of record as of 19 February 2015. The shares will trade ex dividend on 18 February 2015. The dividend will be paid in the form of NOK 0.36 per share on 3 March 2015. Outlook Safe Scandinavia will work at the Solan field in UK for Premier Oil throughout February. Thereafter works will commence at a yard in Norway to convert the unit to a tender support vessel in preparation for the long-term contract with Statoil at Oseberg Øst in Norway. Regalia is under contract with Talisman UK until November 2015. Safe Caledonia is under contract with Nexen until April 2015. In July it will commence a 13-month contract with BP for work at the ETAP field in UK. Safe Bristolia is scheduled to commence the contract with BG in the second quarter of 2015. Safe Astoria is working for Shell at the Malampaya field in the Philippines under a contract that expires at the end of July 2015. Shell has the option to extend the contract by up to two months. Safe Concordia is under a long-term charter with Petrobras in Brazil. In mid-February the vessel will go the Maua yard in Brazil to undergo a special periodic survey. As a result, the vessel will be off-hire for approximately 10 weeks before re-commencing the contract with Petrobras. Safe Britannia and Safe Hibernia are currently working on shorter term contract extensions in Mexico. The new build, Safe Boreas, was delivered from Jurong Shipyard in Singapore in January. The vessel is currently in transit to Norway, where it will commence a six-month contract with Lundin Norway for support in connection with the hook-up and commissioning of the Edvard Grieg platform in late April or early May. The client has the option to extend the contract by two months. Increasingly over the past 12 to 18 months, oil companies have announced reduction of spending and cost cutting programmes. Consequently this has resulted in lower demand for assets and services related to exploration, development and production of oil and gas resources. In the accommodation support market, the reduction in demand has been particularly visible in the North Sea segment. However, although the outlook has weakened relative to earlier expectations, opportunities still exist which could lead to new contracts being awarded over the coming year. In Mexico, long-term demand outlook continues to look promising, although the recent drop in oil price has caused some near-term uncertainty. The cost of shallow water production in Mexico is relatively low, and the recent drop in the price of oil is not expected to affect production volumes negatively. As such, demand for services to support the oil recovery rate, including accommodation support, is expected to continue. In Brazil, accommodation support vessels are mostly used for safety and maintenance purposes on producing fields. All the vessels servicing the Brazilian market currently operate in the Campos basin. In the longer term it is likely that there will also be demand from other areas. Accordingly, the outlook for further growth in Brazil remains positive, despite higher, near-term uncertainty resulting from recent developments in the global oil market. Prosafe is the world's largest owner and operator of semi-submersible accommodation vessels, with the longest track-record in terms of operations and HSEQ. In addition, through its highly competitive cost structure from economies of scale, cost efficient fleet and strong financing structure, Prosafe is well placed to take advantage of weaker market conditions to further enhance its position in the accommodation market over the coming years. 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 This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. Q4 2014 presentation Q4 2014 report |