Prosafe Se · OSL:PRS

Prosafe — Q1 2017 Earnings Presentation

28 slides from Prosafe's earnings presentation, May 11, 2017

  1. Slide 1: Q1 2017 results and market update

    11 May 2017 Q1 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  Plan the work - Work the plan  Financial results and guidance  Status and outlook  Summary 3

  4. Slide 4: Highlights

    Highlights  Awarded important long-term contract for Safe Zephyrus at Johan Sverdrup field in Norway  Good operating performance  Focus on safety and compliance  Utilisation of 40 per cent in the quarter  Safe Concordia still on contract in Brazil, with potential for a short extension  Options

  5. Slide 5: Awarded Johan Sverdrup contract

    Awarded Johan Sverdrup contract  Important contract for the company to win  Will provide longevity of operations for the Safe Zephyrus and generate firm cash flow in a soft market  The award is anticipated to position Safe Zephyrus well for any additional work for the Johan Sverdrup development 

  6. Slide 6: Agenda

    Agenda  Highlights  Plan the work - Work the plan  Financial results and guidance  Status and outlook  Summary 6

  7. Slide 7: Plan the work - Work the plan

    Plan the work - Work the plan Rebuilding of Prosafe  Reorganisation and substantial cost cuts  Capex reduction and liquidity preservation  Optimising lay-up, stacking and reactivation  Fleet high-grading and industry restructuring  Commercial strategy adapted to circumstances  Positioning the

  8. Slide 8: Lead the industry restructuring

    Lead the industry restructuring 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. of Safe

  9. Slide 9: Contributing to replacement and rebalancing

    Contributing to replacement and rebalancing 9

  10. Slide 10: 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 positioning the Safe Scandinavia towards and beyond 2018 10

  11. Slide 11: New builds – dialogue with COSCO

    New builds – dialogue with COSCO  Negotiations with COSCO regarding Nova, Vega and Eurus ongoing  Looking for optionality and value creation potential from financing terms, price and timing of delivery  Solid downside protection in cancellation rights with approx. USD 60 million secured by a refu

  12. Slide 12: Agenda

    Agenda  Highlights  Plan the work - Work the plan  Financial results and guidance  Status and outlook  Summary 12

  13. Slide 13: Income statement

    Income statement (Unaudited figures in USD million) Q1 17 Q4 16 Q1 16 2016 Operating revenues 75.7 125.8 103.0 474.0 Operating expenses (44.9) (47.8) (57.7) (220.8) EBITDA 30.8 78.0 45.3 253.2 Depreciation (33.4) (34.1) (23.4) (115.7) Impairment 0.0 (84.7) 0.0 (84.7) Operating profit/(loss) (2.6) (4

  14. Slide 14: Balance sheet

    Balance sheet (Unaudited figures in USD million) 31.03.17 31.12.16 31.03.16 Goodwill 226.7 226.7 226.7 Vessels 1 997.8 2 029.3 1 581.6 New builds 123.3 122.2 635.3 Other non-current assets 13.9 13.9 4.7 Total non-current assets 2 361.7 2 392.1 2 448.3 Cash and deposits 250.6 205.7 71.0 Other current

  15. Slide 15: 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

  16. Slide 16: 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

  17. Slide 17: Protecting the runway

    Protecting the runway  Good cash flow generation 300 Cash actual Q1 2017 • Reduced cost and capex 250 ~ Cash neutral EBITDA level  Cash neutral at EBITDA of approx. 200 USD 100 million1) 150 100 50 0 1) 2017 is, however, impacted by USD 30 million repayment of sellers credit to Jurong in June. On

  18. Slide 18: 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 18

  19. Slide 19: Agenda

    Agenda  Highlights  Plan the work - Work the plan  Financial results and guidance  Status and outlook  Summary 19

  20. Slide 20: Increased firm contract visibility beyond 2017

    Increased firm contract visibility beyond 2017 20

  21. Slide 21: Order book

    Order book Firm order book at end Q1 2017 of approx. MUSD 450 2 500 Firm contracts Q2 2017 YTD: MUSD 51-53 contract inflow 6% with the Johan 2 000 11 % Sverdrup contract award in April USD million 1 500 43 % 1 000 2017 500 2018 40 % 2019 2020 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q

  22. Slide 22: Moderate capex fall in 2017 and an increase in 2018

    Moderate capex fall in 2017 and an increase in 2018 Global E&P capex change y-o-y (USDm)*  Expecting moderate fall in 2017, after two years of sharp decline  Note that a modest drop in 2017 spending may imply a small uptick in activity  And an increase in capex expected in 2018 * Capex changes 20

  23. Slide 23: General MMO indicators

    Age of fixed facilities in the North Sea General MMO indicators  Oil and gas fields in the North Sea on stream longer than initially planned for Number of fixed facilities  Current market remains Latest year of in the North Sea predominantly hook-up and Veslefrikk reported production as of 2015 La

  24. Slide 24: Prospects and tendering

    Prospects and tendering Tenders and Prospects - outlook is three years  Number of prospects and tenders increased compared to the previous three years  Generally slow decision making but early contact. Activity level moving sideways  Indicating an anticipated gradual improvement from 2018/2019 Nu

  25. Slide 25: Agenda

    Agenda  Highlights  Plan the work - Work the plan  Financial results and guidance  Status and outlook  Summary 25

  26. Slide 26: Summary

    Summary  Good operating performance - 40% utilisation in the quarter  Safety focus – zero mindset – no compromise  Awarded Johan Sverdrup contract for Zephyrus with firm revenue in 2018 and 2019  Focus on positioning the Safe Scandinavia towards and beyond summer 2018  Market remains generally

  27. Slide 27: Appendix

    Appendix @ Prosafe

  28. Slide 28: Operating revenue and expenses

    Operating revenue and expenses (USD million) Q1 17 Q4 16 Q1 16 2016 Charter income 66.3 95.8 56.2 375.5 Mob/demob income 1.1 17.5 13.9 34.0 Other income 8.3 12.5 32.9 64.5 Total 75.7 125.8 103.0 474.0 28

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