Prosafe Se · OSL:PRS
Prosafe — Q1 2023 Earnings Presentation
33 slides from Prosafe's earnings presentation, May 10, 2023
Slide 1: Q1 2023 Results
Q1 2023 Prosafe to select new image Results 10 May 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 ▪ Q1’23 utilization of 28.6%, two out of seven vessels operating during the quarter ▪ Good operating and HSSE performance on all vessels ▪ Backlog of USD 316 million at quarter end Q1 2023 Financials ▪ Revenue of USD 14.3 million and EBITDA of negative USD 6.4
Slide 4: Operations
Operations 4
Slide 5: Good operating performance
Recent operations Good operating Caledonia performance Boreas ▪ Good operating and HSSE performance ▪ Safe Zephyrus: Successfully mobilized to Concordia Brazil. Started contract with Petrobras on 01 May 2023 Zephyrus ▪ Safe Eurus and Safe Notos: Continued work for Petrobras in Brazil Eurus Notos ▪ S
Slide 6: Stable backlog since Q2
Order backlog (USD million) Stable backlog since Q2 2022 24 31 25 25 332 ▪ Backlog of USD 316 million at end Q1 29 300 293 316 ‒ Backlog largely supported by Safe Eurus, 117 Safe Notos and Safe Zephyrus contracts with Petrobras Q1'22 Q2'22 Q3'22 Q422 Q123 ▪ No additions to back log in Q1 Backlog Opt
Slide 7: Fleet status
Fleet status Contract overview 2023 operational items ▪ Safe Notos: Actively marketed ‒ ~30 days off-hire from mid-May 2023 for hull cleaning and Petrobras contract modifications ‒ Expected capex1 of USD ~2 - 3 million and all-in opex of USD ~3-4 million during hull off-hire period ‒ Capex of USD 0.
Slide 8: Safe Concordia mobilization
Safe Concordia mobilization Safe Concordia – US GoM contract ▪ Contract details ‒ 330-day firm contract + 6 monthly options ‒ Commencement window selected by client is 01 August to mid September 2023 ‒ Firm day rate of USD 93,500, OPEX USD 45-55k per day ‒ Standby rate of USD 28,000 from 01 August 2
Slide 9: Financials
Financials 9
Slide 10: EBITDA
EBITDA Operating revenues and EBITDA (USD million) 70 ▪ Charter income of USD 14 million in Q1, driven by lower utilization 60 8 14 ▪ P&L costs related to Safe Zephyrus and 50 53 50 Safe Concordia mobilization of USD 5.5 40 million in Q1 4 3 35 ▪ Capitalized mobilization costs of USD 4.0 30 32 24 mi
Slide 11: Income statement
Income statement (Unaudited figures in USD million) Q1 2023 Q1 2022 12M2022 ▪ Operating result before depreciation of Operating revenues 14.3 35.5 198.9 negative USD 6.4 million Operating expenses (20.7) (30.7) (137.5) ▪ Higher interest expense due to higher Operating results before depreciation (6.
Slide 12: Balance sheet
Balance sheet (Unaudited figures in USD million) 31.03.23 31.03.22 31.12.22 Vessels 384.3 395.5 376.8 ▪ Total assets of USD 480.4 million at end Q1 New builds 0.0 0.0 0.0 2023 Other non-current assets 1.3 1.9 1.2 ▪ Cash position decreased to USD 74.6 million Total non-current assets 385.6 397.4 378.
Slide 13: Positive operating cash flow in Q1 2023
Positive operating cash flow in Q1 2023 Cash flow in the quarter (USD million) ▪ Positive cash conversion with operating cash flow of USD 6.2 million ▪ Release of working capital with vessels coming off contracts ▪ Capex of USD 14.8 million in quarter ▪ Higher interest expenses due to increased inte
Slide 14: Debt profile with first major maturity end-2025
Debt profile with first major NIBD development (USDm) maturity end-2025 359 367 348 331 346 ▪ Favourable terms on debt facilities with limited fixed amortization and low interest rate 92 65 75 75 ‒ Main-tranche: 2.5% + Libor / SOFR, maturing 31 58 December 2025* ‒ COSCO (Safe Eurus): 0% (increasing
Slide 15: Market and outlook
Market and outlook a i IN 1
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 24 23 80% 21 70% 17 16 60% 14 13 13 50% 13 13 13 12 10 11 11 40% 10 9.1 8 8 8.8 6 30% 4 20% 10% 0% 2009 2011 20
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 Latest datapoint 112.5k at 190k 250 000 120 000 Latest contract 100 000 200 000 Latest contract 80 0
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 North Sea tenders as of 09 May 2023 Comments ▪ Currently no visible North Sea tenders for 2023 Year Firm Duration Option(s) Region Expected competition ▪ 60-day First Right of Refusal agreement for Safe Boreas, expiring mid June 2023 2024 4 months 1 month UK Semi-submersib
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 ~110K ~145K ~160K Implied day-rate – 365 day contract Brazil 49 ~175K ~245K ~280K Implied da
Slide 22: Summary
Summary 22
Slide 23: Summary
Summary ▪ Positive development in long-term demand drivers in Brazil and North Sea ▪ Increased tender activity for 2024 and beyond ▪ Slow 2023 North Sea market with low visibility as anticipated ▪ Focus on mobilization and preparations for new contracts in Brazil and US GoM ▪ Several initiatives bei
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 ~26-30 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 at 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 recognized 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