Slide 1: Q3 2022 Results
Q3 2022 Prosafe to select new image Results 3 November 2022
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 ▪ High quarterly activity with all 6 active vessels in operation ▪ Utilisation of 77.3%, highest Q3 level since 2016 ▪ Good operating and HSSE performance on all vessels ▪ Backlog of USD 293 million at quarter end, with potential Petrobras award after quarter
Slide 4: Operations
Operations 4
Slide 5: Good operations in the quarter
Recent operations Good operations in the quarter Caledonia Zephyrus Boreas ▪ High quarterly activity with all 6 active vessels in operation and utilisation of 77.3% ▪ Good operating and HSSE performance Concordia ▪ Safe Boreas: Commenced contract with a UK client Eurus Notos ▪ Safe Zephyrus: Operate
Slide 6: Backlog stable since Q2, tripled last 12 months
Order backlog (USD million) Backlog stable since Q2, tripled last 12 months 24 31 300 293 ▪ Backlog of USD 293 million at end Q3 23 26 29 ‒ bp exercised a one-month option for Safe 104 126 117 Zephyrus ‒ The UK client for Safe Boreas exercised the Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 first 15-day option. T
Slide 7: All active vessels working during 2022
All active vessels working during 2022 Contract overview Comment ▪ Prosafe remains focused on securing further work for its vessels in 2023 ▪ Outlook for 2024 is positive with signs that clients are accelerating tender processes ▪ Overall favourable demand outlook in core Brazilian and North Sea mar
Slide 8: Financials
Financials 8
Slide 9: Increased activity driving revenues and EBITDA
Increased activity driving revenues and EBITDA Operating revenues and EBITDA (USD million) ▪ Charter income of USD 50 million in Q3 , driven by improved utilisation and higher day rates 8 14 ‒ Utilisation in Q2-Q3 generally higher than rest 53 of the year due to North Sea summer season 50 6 ▪ Other
Slide 10: Income statement
Income statement (Unaudited figures in USD million) Q3 2022 Q3 2021 9M 2022 9M 2021 FY 2021 ▪ Lower net financial costs reflect reduced Operating revenues 63.6 45.8 160.0 111.7 141.1 interest expenses and decreased other Operating expenses (39.4) (33.3) (108.2) (91.1) (116.2) financial items after c
Slide 11: Balance sheet
Balance sheet (Unaudited figures in USD million) 30.09.22 30.09.21 31.12.21 Vessels 383.2 400.4 397.0 ▪ Total assets of USD 503 million at end Q3 Other non-current assets 1.3 2.4 2.2 Total non-current assets 384.5 402.8 399.2 2022 Accounts and other receivables 39.8 38.0 17.6 ▪ Cash position increas
Slide 12: Strong cash conversion
Strong cash conversion Cash flow in the quarter (USD million) ▪ Strong cash conversion with operating cash flow of USD 24.5 million ▪ Maintenance capex of USD 2.6 million in quarter ▪ Significantly reduced interest expenses after the completion of the financial restructuring last year ▪ Cash positio
Slide 13: Financially restructured with first major maturity end-2025
Financially restructured NIBD development (USDm) with first major maturity 1 469 end-2025 NIBD Cash ▪ Favourable terms on debt facilities with limited fixed amortization and low interest rate 349 359 367 348 ‒ Main-tranche: 2.5% + Libor / SOFR, maturing 31 107 74 65 75 58 December 2025* Q3'21 Q4'21
Slide 14: Market and outlook
Market and outlook r N NS
Slide 15: Significant tightening of market balance, especially for DP3 and equivalent
Significant tightening of market balance, especially for DP3 and equivalent Declining fleet1 Increasing demand (# of vessel years)1 Global accommodation market vessel utilisation2 30 30 100% 28 28 27 26 26 90% 25 25 24 25 22 80% 21 20 70% 20 17 16 60% 15 14 15 13 13 13 13 50% 12 12 10 11 11 40% 10 1
Slide 16: North Sea day rates improving, key trigger increased hook-up jobs
North Sea day rates improving, key trigger increased hook- up jobs North Sea day rate development (USD/d) North Sea activity (# of vessel years) 400 000 60 7 350 000 6 50 300 000 5 40 250 000 4 200 000 30 3 150 000 20 100 000 2 10 50 000 Current North Sea opex: USD 25-60k/d1 1 0 0 - 2012 2013 2014 2
Slide 17: New FPSOs coming into Brazil lead to higher demand
New FPSOs coming into Brazil lead to higher demand Brazil day rate development (USD/d) Brazil activity (# of vessel years) 200 000 80 10 180 000 8 70 160 000 6 60 140 000 4 50 120 000 2 100 000 40 - 80 000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 30 60 000 20 Current Brazil opex: USD 4
Slide 18: Indicative earnings potential in an improving market
Indicative earnings potential in an improving market Current fleet EBITDA potential Historical EBITDA/vessel1 for Prosafe vessels per region Indicative Average1 Average1 Peak1 70 USD million 2022 2011-22 2011-16 2014/15 EBITDA/vessel 13 22 35 41 61 60 56 54 # of vessels on long-term charter in Brazi
Slide 19: Summary
Summary 19
Slide 20: Summary
Summary ▪ On target for 2022 with high activity linked to tie-back and life extension projects ▪ North Sea is expected to be weak in 2023 with low visibility and opportunities moving from 2023 to 2024 ▪ Capex and modification costs for ongoing and new contracts will impact EBITDA and liquidity in 20
Slide 21: Supplementary Information
Supplementary Information 21
Slide 22: Preparing for two new contracts in 2023
Preparing for two new contracts in 2023 Safe Concordia – US GoM Safe Zephyrus – Brazil ▪ 330-day firm contract + 6 monthly options, commencing July-October 2023. ▪ 650-day contract subject to final contract with Petrobras, commencing Low probability of securing work in period prior to contract 2023.
Slide 23: Newbuild status: Safe Nova and Safe Vega
Newbuild status: Safe Nova and Safe Vega ▪ 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 dialogue with the
Slide 24: Actively reducing fuel consumption and emissions
Actively reducing fuel consumption and emissions Indicative fuel consumption (m3/d) Comments What has been done: ▪ Target of 50% fuel and CO2 ▪ 2+1 engine configuration Next priorities: reduction by 2030 ▪ ISO 50.001 certified (Boreas and Zephyrus) ▪ ▪ HVAC-systems ▪ Solutions that reduce Advisory s
Slide 25: 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 26: Analytical information
Analytical information Item 2022 (USDm) 2023 (USDm) Comment SG&A ~16 In a tightening market SG&A is likely to increase somewhat Depreciation ~28 Straight line depreciation Interest expense ~20 Exposed to rising interest rates Tax ~2 Norwegian deferred tax assets of USD 1.9 bn, local and contract spe
Slide 27: 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 Concordia Confidential Oct-22 Jul/Oct-23 Jun/Sept-24 11 US GoM DP HUC $93 500 $33 364 900 Safe Eurus Petrobras Jun-22 Mar-23 Mar-27 48 Brasil DP M&M $86 000 $125
Slide 28: Estimated OPEX per region and vessel
Estimated OPEX per region and vessel Historical opex per day Current opex per day 75 UK (DP – Boreas/Zephyrus) $35 – 40k/d UK (Moored - Caledonia) $25 - $30k/d 60 55 Incl. fuel Brazil $45 – 50k/d (incl. fuel) allowance Norway (DP – Boreas/Zephyrus) $55 – 60k/d Opex / day ($k/d) 45 40 RoW (Concordia)
Slide 29: Significant cost improvements since 2015
Significant cost improvements since 2015 SG&A1 cost development (USDm) ▪ Significant cost improvement since 2015 has been driven by 6.7 6.7 ‒ Reduction in number of active vessels (from 14 to 7) 45 7 40 40 40 41 ‒ Reduced onshore headcount (from ~150 to 60) 40 6 ‒ Adapting cost structure to be more
Slide 30: Historic SPS and maintenance capex
Historic SPS and SPS and maintenance capex (USDm)1 maintenance capex 18 16 3.0 2.5 14 12 2.0 ▪ Maintenance capex of ~$1-2m per vessel 10 1.5 per year 8 6 1.0 ▪ 5-year SPS cost of USD 4 to 5 million per 4 0.5 vessel 2 - - ▪ SPS usually takes 1-2 months to complete 2012 2013 2014 2015 2016 2017 2018 2
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% 0% (increase to 2% from 2026) COSCO Amortizations Cas
Slide 32: Tax
Tax ▪ Prosafe SE is a permanent tax resident in Norway. As of end 2021, the company has deferred tax asset of approximately USD 1.9 billion, which can be utilized as tax deduction in the future and not recognised in the accounts. ▪ The company will from time to time operate in countries where local
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