Prosafe Se · OSL:PRS

Prosafe — Q3 2016 Earnings Presentation

32 slides from Prosafe's earnings presentation, Nov 3, 2016

  1. Slide 1: Q3 2016 results

    3 November 2016 Q3 2016 results

  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  Quarter highlights  Work the plan  Financial results  Operations review  Strategy and Outlook  Summary 3

  4. Slide 4: Quarter highlights

    Quarter highlights  Working the plan • Completed comprehensive financial restructuring and secured runway through 2020 • Significantly improved debt structure and cash flow • Limited covenants and significantly improved room to manoeuvre • Phase1 re-organization and cuts in cost and capex ongoing t

  5. Slide 5: Agenda

    Agenda  Quarter Highlights  Work the plan  Financial results  Operations review  Strategy and Outlook  Summary 5

  6. Slide 6: 1. Work the plan: Refinancing

    1. Work the plan: Refinancing - A billion dollar runway through 2020  Improved cash flow 2017-2020 of more than USD 1 billion from • Reduction of debt/new build investment USD 530 million • Reduction of amortisation of USD 470 million • Interest saving from swap restructuring of approx. USD 23m  B

  7. Slide 7: 2. Work the Plan: Reorganization

    2. Work the Plan: Reorganization  From matrix to simple line organization  Fewer departments  Slimmer management team  Phase 1 complete at start of 2017 • Total headcount reduction 35-40% • From ca 800 to ca 500, of which ca 115 onshore as of Q1 2017  Phase 2 being planned 7

  8. Slide 8: 3. Work the Plan: Cost and capex cut targets

    3. Work the Plan: Cost and capex cut targets 2011-2015 annual Revised target levels Target savings 2017 average levels Offshore opex1) USD 180m USD 140 – 150m USD 30-40m (20%) Onshore opex USD 40m USD 28m USD 12m (30%) Annual fleet capex2) USD 60m USD 10-15m USD 40-45m (70%) Headcount reduction (in

  9. Slide 9: 4. Work the Plan: Rightsizing by scrapping

    4. Work the Plan: Rightsizing by scrapping New & modern fleet (5x rigs) Zephyrus (‘16) Notos (‘16) Boreas (‘15) Concordia (’05/’15) Eurus (’19E) Seasoned fleet (5x rigs) Regalia (’85/’09) Astoria (‘83/’12) Bristolia (’83/’08) Caledonia (’82/’12) Regency (‘82/’03) Scrapping candidates (1x rigs) Lanci

  10. Slide 10: 5. Work the Plan: Indicative Operating Model

    5. Work the Plan: Indicative Operating Model - Three divisions Mid Water | High End | Operated Drilling Support | Operated Opportunities Operated/Managed Further consolidation opportunities at different levels: Zephyrus (‘16) Notos (‘16) Boreas (‘15) Regalia (’85/’09) Astoria (‘83/’12) Scandinavia (

  11. Slide 11: Agenda

    Agenda  Quarter Highlights  Work the plan  Financial results  Operations review  Strategy and Outlook  Summary 11

  12. Slide 12: Income statement

    Income statement (Unaudited figures in USD million) Q3 16 Q2 16 Q3 15 9M 16 9M 15 2015 Operating revenues 129.8 115.4 154.1 348.2 370.8 474.7 Operating expenses (61.5) (53.8) (56.5) (173.0) (159.3) (211.8) EBITDA 68.3 61.6 97.6 175.2 211.5 262.9 Depreciation (29.1) (29.1) (26.3) (81.6) (62.0) (86.5)

  13. Slide 13: Specification of non-recurring cost items

    Specification of non-recurring cost items - refinancing and reorganization  Non-recurring cost items of MUSD 18 expensed (P&L effect) in the quarter • Britannia/Hibernia/Jasminia (have been sold for scrap/recycling): MUSD 2.6 • Financial restructuring: MUSD 8.7 • Resizing of organization: MUSD 6.7

  14. Slide 14: Balance sheet

    Balance sheet (Unaudited figures in USD million) 30.09.16 30.06.16 31.12.15 30.09.15 Goodwill 226.7 226.7 226.7 226.7 Vessels 1 887.3 1 559.0 1 578.6 1 698.3 New builds 318.8 654.9 228.5 213.6 Other non-current assets 4.1 4.3 4.9 5.5 Total non-current assets 2 436.9 2 444.9 2 038.7 2 144.1 Cash and

  15. Slide 15: Covenants - large headroom

    Covenants - large headroom  Liquidity minimum MUSD 65 • Q3: MUSD 183.4  Interest coverage ratio (adjusted EBITDA : Net interest expense over previous 12 month period) minimum 1.0 • Q3: 4.7 15

  16. Slide 16: Agenda

    Agenda  Quarter Highlights  Work the plan  Financial results  Operations review  Strategy and Outlook  Summary 16

  17. Slide 17: Operations overview

    Operations overview Key comments  In operation: • Safe Boreas, Repsol, Montrose A, UKCS • Safe Concordia, Petrobras, P48, Brazil • Safe Scandinavia (TSV), Statoil, Oseberg Ost, NCS • Safe Zephyrus, Det Norske, Ivar Aasen, NCS  Mobilising: • Safe Notos; mobilisation in Brazil  Lay-up/yard: • Safe

  18. Slide 18: Contract portfolio

    Contract portfolio Contract Yard Option 18

  19. Slide 19: Firm order-book as of end of Q3 2016

    2016 2017 2018 2019 2020 39 % 19 % 4% 8% Firm order-book as of end of Q3 2016 30 % Q3 16 Q2 16 Q1 16 Q4 15 Q3 15 Q2 15 Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Q4 13 Q3 13 Q2 13 Firm contracts Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Q4 09 Q3 09 Q2 09 Q1 09 19 800 600 400 2

  20. Slide 20: Agenda

    Agenda  Quarter Highlights  Work the plan  Financial results  Operations review  Strategy and Outlook  Summary 20

  21. Slide 21: Semi accommodation market expected to rebalance by 2020

    Semi accommodation market expected to rebalance by 2020 Scrapping, non-delivery and consolidation likely to positively impact market balance  Safe Scandinavia is a Tender Support Vessel (TSV) and has been taken out of 29 accommodation supply in 2016 26  Prosafe has scrapped 3 vessels POSH 20-25 23

  22. Slide 22: Dayrate averages and indications

    Dayrate averages and indications - Bottoming out of market softness – with anticipated recovery from 2018 onwards…  North Sea recent awards indicate a significant dayrate reduction through 2016 and 2017  Other regions less affected  Recovery indicators from 2018 onwards  Leading broker present d

  23. Slide 23: Longer Term Indicators of Market Recovery from 2018

    Longer Term Indicators of Market Recovery from 2018 **RoW includes Canada, US GoM, Australia and West Africa. Source: Rystad Energy research and analysis 23

  24. Slide 24: Shorter Term Market Update

    Shorter Term Market Update Current Historical Prospect Snapshot 24

  25. Slide 25: Taking the lead in consolidation, renewal and scrapping

    Taking the lead in consolidation, renewal and scrapping «Next phase restructuring»: «Fleet renewal and «Growth and rightsizing»: Ambition to take the lead Consolidation»: also in future consolidation 1. Renewal 1. Acq. of Discoverer ASA 2. Conversion to TSV «Creation»: 2. Acq. of Safe Scandinavia 3.

  26. Slide 26: EBITDA and capex guidance

    EBITDA and capex guidance Previous guidance 2016 MUSD 170-220 2017 MUSD 110-140 2016 and 2017 combined MUSD 280-360 Capex per year MUSD 20-30 Current guidance 2016 and 2017 combined MUSD 320+ (in line) Higher in 2016 than previous guidance, lower in 2017 Capex per year MUSD 10-15 26

  27. Slide 27: Agenda

    Agenda  Quarter Highlights  Working the plan  Financial results  Operations review  Strategy and Outlook  Summary 27

  28. Slide 28: Summary

    Summary  Solid underlying performance  On track re cost- and capex cuts • Phase 2 being planned  Consolidation required  Scrapping and fleet rightsizing ongoing  Market anticipated to rebalance towards 2020  Market activity anticipated to improve and demand to gradually pick up from 2018 drive

  29. Slide 29: Appendices

    Appendices ® Prosafe

  30. Slide 30: Operating revenues

    Operating revenues (USD million) Q3 16 Q2 16 Q3 15 9M 16 9M 15 2015 Charter income 114.4 109.1 139.9 279.7 331.7 425.4 Mob/demob income 2.1 0.5 2.1 16.5 3.9 5.4 Other income 13.3 5.8 12.1 52.0 35.2 43.9 Total 129.8 115.4 154.1 348.2 370.8 474.7 30

  31. Slide 31: Q3 Debt overview

    Q3 Debt overview  Prosafe SE - total bank credit facilities MUSD 1383 • Long term portion of MUSD 1366 and short term portion of MUSD 17 • MUSD 1300 facility: fully drawn; outstanding MUSD 1245 • MUSD 288 facility: tranche drawn related to Safe Notos; outstanding MUSD 138 • MUSD 144 tranche undrawn

  32. Slide 32: Significantly improved debt profile

    Significantly improved debt profile  Chart Previous + table with changes.. amortisation profile Current profile after recapitalisation USDm USDm 280 280 240 240 200 200 160 160 Amortisation relief of USD 128m 120 (2 instalments on USD 1,300m facility) 120 already granted 80 80 40 40 0 0 2016 2017 2

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