Prosafe Se · OSL:PRS
Prosafe — Q1 2020 Earnings Presentation
26 slides from Prosafe's earnings presentation, May 27, 2020
Slide 1: Q1 2020 results and market update
26 May 2020 Q1 2020 results and market update
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: Agenda
Agenda Executive summary Re-assessment of outlook and financial implications Update on financial situation Financial results Strategy & summary 3
Slide 4: Executive summary
Executive summary Effects of Covid-19, oil price crash, structural demand shift and over supply Utilisation in Q1 of 32.7 per cent (62.5 per cent) Total liquidity per Q1 of USD 184 million Impairments in Q1 of USD 811 million Strategy 4
Slide 5: Agenda
Agenda Executive summary Re-assessment of outlook and financial implications Update on financial situation Financial results Strategy & summary 5
Slide 6: A new market reality with changed demand drivers
A new market reality with changed demand drivers - Average EBITDA last 4 years from core and recurring MMO activity about MUSD 40 Prosafe EBITDA 2010 - 2019 400 Historically: About 50 per cent of EBITDA generated from 3 non-recurring demand drivers: Mexico, TSV, NS Hook-ups 350 307 313 TSV 300 283 2
Slide 7: Global oversupply of vessels
Global oversupply of vessels Global supply demand outlook 45 40 Total Supply: 38 Vessels 35 30 # Vessel Years 25 Scrapping required to balance market 20 15 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e 2024e Committed Vessels Predicted Demand Global Vessel
Slide 8: Re-assessment of outlook and financial implications
Re-assessment of outlook and financial implications Market outlook – A new market reality Financial implications A prolonged downturn over several years followed by Covid-19 and A further re-assessment of market outlook impacts cash- oil price crash flow projections significantly in the short te
Slide 9: Agenda
Agenda Executive summary Re-assessment of outlook and financial implications Update on financial situation Financial results Strategy & summary 9
Slide 10: Update on financial situation
Update on financial situation At the end of Q1 2020, Prosafe has liquidity of USD 184 million and adequate liquidity under the current “halt payment” situation and all else equal for the foreseeable future Ref. message in the 2019 Annual Report: after several years of low activity across the ind
Slide 11: Agenda
Agenda Executive summary Re-assessment of outlook and financial implications Update on financial situation Financial results Strategy & summary 11
Slide 12: Q1 2020 in short
Q1 2020 in short Implemented Covid-19 plans early to safeguard people and assets, and this has proven successful both onshore and offshore Total liquidity of USD 184 million per Q1 2020 The company has presented a restructuring proposal to lenders that if approved as proposed, will result in a
Slide 13: Order backlog (USD million) per end Q1 2020
Order backlog (USD million) per end Q1 2020 500 38 450 400 36 350 36 300 36 67 250 78 443 67 37 200 375 42 21 150 304 8 273 11 232 100 209 199 184 170 159 146 127 50 0 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Firm contracts Options Prosafe’s firm backlog was USD 127
Slide 14: Fleet status: Contracts, wins and extensions
Fleet status: Contracts, wins and extensions Contract backlog Contracting update Safe Caledonia contract with Total UK for 162 days from mid-April 2020 with a 30- day option deferred until end Q1 2021 Safe Eurus and Safe Notos under contract suspension for up to 120 days since early April. All s
Slide 15: Reducing the cost base to improve competitiveness and preserve cash
Reducing the cost base to improve competitiveness and preserve cash SG&A* costs down over 60 per cent since 2015 CPD down 35-40 per cent on average Opex NCS UK NCS UKCS Brazil (CPD (TSV) USD k/d) DP DP Moored Moored DP 2015- - ~20% - ~ 45% - ~25% - ~50% - ~42% 2019 Stacking Warm stack Cold stack CPD
Slide 16: Income statement
Income statement Q1 Impairments of USD 811 million as a result of re- (Unaudited figures in USD million) 2020 2019 assessment of market outlook Operating revenues 25 67 Fleet utilisation at 32.7 per cent (Q1 2019: 62.5 per Operating expenses (24) (43) cent) Operating results before depreciation
Slide 17: Balance sheet
Balance sheet (Unaudited figures in USD million) 31.03.20 31.03.19 Total assets of USD 639 million mainly due to the Vessels 437 1,401 New builds 1 126 impairments carried out in Q3 2019 and Q1 2020 Other non-current assets 2 3 Total non-current assets 440 1,530 Rigs impaired by USD 811 million
Slide 18: Agenda
Agenda Executive summary Re-assessment of outlook and financial implications Update on financial situation Financial results Strategy & summary 18
Slide 19: Strategy and goals
Strategy and goals Secure a sustainable financial solution Maintain commercial win rate for any opportunities that arise Re-enter Mexico Seek engagement for Safe Scandinavia (TSV) outside accommodation Consolidation and fleet renewal Pursue ESG initiatives 19
Slide 20: Scrapping will gradually rebalance the market
Scrapping will gradually rebalance the market - But expected to take time… Current supply based on year of delivery Scrapping candidates Active Cold-Stacked Scrapped 40 6 35 38 12 5 30 25 4 26 Years between cycles: 25 - 30 years 20 3 15 2 10 1 5 0 0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Slide 21: Consolidation
Consolidation - Prosafe sees several interesting and value-enhancing consolidation/distressed asset acquisition opportunities Consolidation opportunities Consolidation opportunities - # of vessels per owner 12 Prosafe is well placed to drive consolidation in the industry due to its strong commerci
Slide 22: Summary
Summary Total liquidity of USD 184 million per Q1 2020 The company has presented a restructuring proposal to lenders. Extension to current Forbearance arrangement requested from end May 2020 till end June 2020 Firm order book of USD 127 million per Q1 2020 (USD 159 million). Pending ongoing di
Slide 23: Appendix
Appendix @ Prosafe
Slide 24: Operating revenue
Operating revenue (USD million) Q1 20 Q1 19 Q4 19 2019 Charter income 24.4 56.8 24.4 191.7 Other income 0.6 10.5 1.9 33.7 Total 25.0 67.3 26.3 225.4 24
Slide 25: Development of operating results
Development of operating results 25
Slide 26: Liquidity reserve & net interest-bearing debt
Liquidity reserve & net interest-bearing debt 26