Slide 1: Q4 2022 Results
Q4 2022 Prosafe to select new image Results 28 February 2023
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.
Slide 3: Key events
Key events Operations, HSSE and backlog ▪ Q4’22 utilization of 56.1%, five out of seven vessels in operation during the quarter ▪ Full year utilization of 70.6%, highest since 2014 ▪ Good operating and HSSE performance on all vessels ▪ Backlog of USD 332 million at quarter end Q4 22 Financials ▪ Rev
Slide 4: Operations
Operations 4
Slide 5: Good operating performance
Recent operations Good operating performance Caledonia Zephyrus Boreas ▪ Safe Boreas: Completed contract in UK sector and now laid up in Norway pending future work ▪ Safe Caledonia: Operated for TotalEnergies Concordia at the Elgin platform in the UK. Demobilised in December 2022 and laid up in UK p
Slide 6: Backlog tripled YoY, stable since Q2
Order backlog (USD million) Backlog tripled YoY, stable since Q2 24 31 25 332 ▪ Backlog of USD 332 million at end Q4 26 29 300 293 ‒ Signed a 650-day contract with Petrobras to 126 117 use Safe Zephyrus from May 2023 adding USD 73 million to total backlog Q4'21 Q1'22 Q2'22 Q3'22 Q422 Backlog Options
Slide 7: Fleet status
Fleet status Contract overview 2023 operational items ▪ Safe Notos: Actively marketed ‒ ~30 days off-hire in May 2023 for hull cleaning and Petrobras contract modifications ‒ Expected capex1 of USD ~1-2 million and all-in opex of USD ~3-4 million during hull off-hire period ▪ Safe Eurus: ‒ ~35 days
Slide 8: Financials
Financials 8
Slide 9: Improved day rates driving revenues and EBITDA
Improved day rates driving revenues and EBITDA Operating revenues and EBITDA (USD million) ▪ Charter income of USD 35 million in Q4, driven by higher day rates than prior year 8 14 ‒ Utilization in Q2 and Q3 generally higher than rest of the year due to North Sea summer 53 50 season ▪ Other income o
Slide 10: Income statement
Income statement (Unaudited figures in USD million) Q4 2022 Q4 2021 12M 2022 12M 2021 Operating revenues 38.9 29.4 198.9 141.1 Operating expenses (29.3) (25.0) (137.5) (116.2) ▪ Operating result before depreciation of Operating results before depreciation 9.6 4.4 61.4 24.9 USD 9.6 million Depreciati
Slide 11: Balance sheet
Balance sheet (Unaudited figures in USD million) 31.12.22 31.12.21 ▪ Total assets of USD 500 million at end Q4 2022 Vessels 376.8 397.0 Other non-current assets 1.2 2.2 ▪ Cash position increased to USD 91.6 million Total non-current assets 378.0 399.2 from USD 74.5 million at Q3 2022 driven by Accou
Slide 12: Strong operating cash flow in Q4 2022
Strong operating cash flow in Q4 2022 Cash flow in the quarter (USD million) ▪ Strong cash conversion with operating cash flow of USD 24.7 million ▪ Release of working capital following lower activity ▪ Maintenance capex of USD 1.2 million in quarter ▪ Higher interest expenses due to increase of int
Slide 13: Debt profile with first major maturity end-2025
Debt profile with first major NIBD development (USDm) maturity end-2025 349 359 367 348 331 ▪ Favourable terms on debt facilities with limited fixed amortization and low interest rate 92 74 65 75 ‒ Main-tranche: 2.5% + Libor / SOFR, maturing 31 58 December 2025* ‒ COSCO (Safe Eurus): 0% (increasing
Slide 14: Market and outlook
Market and outlook r N NS
Slide 15: Accommodation services are late in the E&P cycle
Accommodation services are late in the E&P cycle E&P activity cycle Development: Production: License award Development Development: De- Exploration Appraisal Hook-up/ Operations & Pre-engineering Construction commissioning commissioning maintenance Oil service demand Seismic Seismic Drilling Drillin
Slide 16: Significant tightening of market balance for high end vessels
Significant tightening of market balance for high end vessels Declining fleet1 Increasing demand (# of vessel years)1 Global accommodation vessel utilisation2 28 28 100% 27 26 26 25 90% 24 23 80% 21 70% 17 15 60% 14 13 50% 13 13 12 13 12 11 40% 10 9 9 8 8 9 7 6 30% 20% 1 10% 0% 2008 2010 2012 2014 2
Slide 17: Dayrates are picking up as the market is tightening
Dayrates are picking up as the market is tightening Brazil day rate development (USD/d) North Sea day rate development (USD/d) 200 000 400 000 180 000 350 000 160 000 300 000 140 000 Latest datapoint 112.5k 250 000 120 000 Latest contract Latest datapoint at 140k 100 000 200 000 80 000 150 000 Lates
Slide 18: Strong development in North Sea demand drivers
Strong development in North Sea demand drivers North Sea activity (# of vessel years) Historical and expected PDO’s1 on the NCS 10 Rig years # of PDO1 M&M Hook-up TSV 9 50 40 8 45 35 40 7 30 35 6 25 30 5 25 20 4 20 15 3 15 10 2 10 1 5 5 - 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20
Slide 19: Increasing flotel demand in Brazil
Increasing flotel demand in Brazil Brazil activity (# of vessel years) Number of FPSO’s working in Brazil 10 9 70 67 65 Actual activity 62 62 8 lower than 60 61 61 illustrated due 55 56 7 54 53 to Covid-19 51 46 47 6 44 40 5 35 33 4 3 2 1 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 20: Tendering activity
Tendering activity Ongoing tenders Comments ▪ Slow 2023 market in the North Sea, currently no visible tenders Year Firm Duration Option (s) Region Expected competition ▪ Expectation of 1-3 additional tenders in the North Sea for 2024 2024 4 months 4 months UK Semi-submersible ▪ Petrobras likely to a
Slide 21: Indicative earnings potential in an improving market
Indicative earnings potential in an improving market Fleet EBITDA potential Historical EBITDA/vessel1 for Prosafe vessels per region Average1 Average1 Peak1 70 USD million 2011-22 2011-16 2014-15 61 60 56 54 EBITDA/vessel 22 35 41 49 50 45 42 # of vessels on long-term charter in Brazil 2 2 2 40 # re
Slide 22: Summary
Summary 22
Slide 23: Summary
Summary ▪ High activity in 2022 linked to tie-back and life extension projects ▪ Slow 2023 North Sea market with low visibility ▪ Focus on mobilization and preparations for new contracts in Brazil and US GoM ▪ Several initiatives being undertaken to remain in compliance with the minimum liquidity co
Slide 24: Appendix
Appendix 24
Slide 25: Option to take delivery of two newbuilds available at yard
Option to take delivery of two newbuilds available at yard ▪ Prosafe has option to take delivery of the only two DP3 newbuild semis available at yard ‒ 500 POB and well suited for Petrobras requirements ‒ Long-term contracts at higher than prevailing day rates required to justify delivery ‒ Ongoing
Slide 26: Rest of World contract overview
Rest of World contract overview RoW day rate development (USD/d) Comments 350 000 80 ▪ Large variation in contract rates on global basis 300 000 70 ▪ Highest rates in Australia due to operating 250 000 60 cost and mobilization 200 000 50 ▪ Rates in Americas have recently been in 40 USD 90k to 125k p
Slide 27: Analytical information
Analytical information Item 2023 (USDm) Comment SG&A ~17-181 In a tightening market SG&A is likely to increase somewhat Depreciation ~30-33 Straight line depreciation Interest expense ~25-30 Exposed to rising interest rates Tax ~2 Norwegian deferred tax assets of USD 1.9 bn, local and contract speci
Slide 28: Prosafe recent firm period fixtures
Prosafe recent firm period fixtures Vessel Client Award date Start Finish # months Region Positioning Work type Day rate Total Award Safe Zephyrus Petrobas Des-22 May-23 Feb-25 21 Brasil DP H&M $112 500 $73 125 000 Safe Concordia Confidential Oct-22 Jul/Oct-23 Jun/Sept-24 11 US GoM DP HUC $93 500 $3
Slide 29: SG&A and Opex increasing driven by inflationary pressure
SG&A and Opex increasing driven by inflationary pressure SG&A1 cost development (USDm) Opex per day (USDk/day) 45 9 UK (DP – Boreas/Zephyrus) $35 – 45k 40 40 40 41 40 8 UK (Moored - Caledonia) $25 – 30k 35 7 30 6.7 6.7 30 6 Brazil $48 – 52k (incl. fuel) 25 5.7 5.9 22 21 19 5 Norway (DP – Boreas/Zeph
Slide 30: Historic SPS and maintenance capex
Historic SPS and SPS and maintenance capex (USDm)1 maintenance capex 18 16 14 14 15 15 16 16 14 17 2.4 3.0 2.5 10 12 2.0 10 ▪ Maintenance capex of ~USD 1-2 million per 10 8 1.7 1.5 vessel per year 1.6 8 1.3 1.4 1.4 6 1.3 1.3 1.0 1.2 ▪ 5-year SPS cost of USD 5 to 6 million per 4 0.9 3 0.5 vessel 2 0
Slide 31: Outstanding debt
Outstanding debt Two tranches Main tranche COSCO Sellers Credit Debt maturity profile Outstanding debt $343m (250m + 93m Notos) $93m Pledged vessels Boreas, Zephyrus, Caledonia, Concordia, Eurus Scandinavia, Notos Interest rate LIBOR/SOFR* + 2.5%. Unhedged 0% (increase to 2% from 2026) COSCO Amortiz
Slide 32: Tax
Tax ▪ Prosafe SE is a permanent tax resident in Norway. As of end 2022, the company has deferred tax assets of approximately USD 1.9 billion, which can be utilized as tax deduction in the future and is not recognised in the accounts ▪ The company will from time to time operate in countries where loc
Slide 33: We are headquartered in Norway and have offices in the UK, Brazil and Singapore
We are headquartered in Norway and have offices in the UK, Brazil and Singapore Head office: Forusparken 2 N-4031 Stavanger Norway prosafe.com