Prosafe Se · OSL:PRS
Prosafe — Q1 2018 Earnings Presentation
29 slides from Prosafe's earnings presentation, May 4, 2018
Slide 1: Q1 2018 results and market update
4 May 2018 Q1 2018 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: Q1 2018 highlights
Q1 2018 highlights Continued good operating performance Utilisation of 33.3 per cent in the quarter Operating revenues at USD 82.8 million Cash flow from operations at USD 51.3 million Safe Caledonia awarded a five-month contract for BP in the UK with start-up around end of May Prosafe w
Slide 4: Agenda
Agenda Financial results Business & Operations Outlook Strategy & Summary 4
Slide 5: Income statement
Income statement CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited figures in USD million) Q1 18 Q4 17 Q1 17 2017 Operating revenues 82.8 76.7 75.7 283.0 Operating expenses (33.6) (34.6) (42.9) (152.1) Operating result before depreciation 49.2 42.1 32.8 130.9 Depreciation (27.3) (27.2) (35.4) (135.
Slide 6: Balance sheet
Balance sheet CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited figures in USD million) 31/03/18 31.12.17 31/03/17 Goodwill 0.0 0.0 226.7 Vessels 1,501.1 1,527.2 1,997.8 New builds 125.2 125.2 123.3 Other non-current assets 10.2 10.5 13.9 Total non-current assets 1,636.5 1,662.9 2,36
Slide 7: Efficiently protecting the cash position
Efficiently protecting the cash position 300 Good cash flow generation 250 • Operating cash-flow of USD 51.3 million in Q118 200 • Comfortable cash position: USD 254 Cash Balances @ Q1' 18 150 million per Q118 (USD 231.9 million per Cash Neutral at EBITDA level YE 2017) 100 Cash neutral at EBITD
Slide 8: Agenda
Agenda Financial results Business & Operations Outlook Strategy & Summary 8
Slide 9: Prosafe wins the Westcon dispute
Prosafe wins the Westcon dispute Ruling on 8 March: • The Court issued its judgement in favour of Prosafe, and decided that Westcon must pay Prosafe NOK 344 million plus interest and NOK 10.6 million legal costs. Westcon has filed an appeal. Prosafe will file a counter appeal. Prosafe will con
Slide 10: Fleet renewal strategy – controlling new builds at COSCO
Fleet renewal strategy – controlling 3 new builds at COSCO A key strategic goal for Prosafe is fleet renewal Negotiations with COSCO regarding Safe Nova, Safe Vega and Safe Eurus is ongoing. • The standstill agreement between Prosafe and COSCO related to Safe Nova and Safe Vega has been extended
Slide 11: New contract for Safe Caledonia
New contract for Safe Caledonia Five-month contract with BP for the provision of the Safe Caledonia at the Clair Ridge platform West of Shetland on the UKCS. • The contract will commence end-May 2018 providing gangway connected operations to support hook up and commissioning activities. • Total va
Slide 12: Contract status
Contract status VAS OND J FMAM sis 3 J ee a eee Petrobras UMS SAFE BOREAS Statoil Mariner Johan Sverdrup SAFE SCANDINAVIA SAFE CALEDONIA | BP Clair Ridge ‘SAFE SWIFT SAFE ASTORIA ) Prosafe
Slide 13: Safe Scandinavia future opportunities
Safe Scandinavia future opportunities In addition to marketing the vessel for TSV- and Accommodation Services, Prosafe is in dialogue with blue chip companies to collaborate within Plug and Abandonment (P&A) and Decommissioning: • Well Plug & Abandonment: ambition to reduce the total project time
Slide 14: Agenda
Agenda Financial results Business & Operations Outlook Strategy & Summary 14
Slide 15: Firm order backlog development
Firm order backlog development Firm Order Backlog Prosafe’s firm backlog has fallen to Firm Order backlog (USD millon) USD 273 million per Q1 2018 1800 Strategy of fleet renewal to be well 1600 1635 1541 positioned in all key markets when 1400 1371 demand returns 1200 1239 1111 1084 Require M&
Slide 16: M&M impacted by significant reduction in intensity
M&M impacted by significant reduction in intensity 2000 2008 2016 15 16 12 12 NCS Offshore 10 10 operations, man-hours million man-hours / 1.4 1.4 1.4 1.5 / 1.3 Installed Active topside base of tonnes, infrastructure million = 100% = 70% 77% 93% 67% 73% Maintenance 59% Man- intensity hours/tonne Mai
Slide 17: Positive macro indicators: Oil price & break-even
Positive macro indicators: Oil price & break-even 98% 99% 35 95% 100% 140% 91% S&P 500 95% of P50 resources 133% breakeven at or below 85% 90% Brent Crude 30 120% $70/bbl 120% 76% 80% cumulative % of total P50 resources 25 100% 70% S&P Energy 5esources P50 (billion bbls) 94% 55% 60% 20 80% 46% OSX I
Slide 18: Positive macro indicators: E&P Capex & RRR
Positive macro indicators: E&P Capex & RRR E&P Capex Offshore Reserve Replacement Ratio USDbn 0 50 100 150 200 250 300 16 160% 2010 The industry has only been 143% replacing ~1/3rd of 2011 14 offshore production 140% 125% 116% 2012 sanctioned barrels/production 12 120% sanctioned barrels (billions)
Slide 19: North Sea activity – Currently only HUC – Waiting for M&M
North Sea activity – Currently only HUC – Waiting for M&M North Sea Activity Profile (months) M&M work has been the primary driver of demand on the North Sea, comprising of 74% of the historical work by duration. • However, in 2017 and into 2018, this has flipped with the only work being done bein
Slide 20: General M&M indicators - NS
Age of fixed facilities in the North Sea General M&M indicators - NS Oil and gas fields in the North Sea on stream longer than initially planned for. Current market remains predominantly Number of fixed facilities in the North Sea hook-up and commissioning work. Veslefrikk Anticipated that lif
Slide 21: International will be a focus…but will require compliant vessels
International will be a focus…but will require compliant vessels Brazil Brazil Demand and Supply Near Balance (vessel yrs) Commoditised market for assets that meet Petrobras’ 12 Demand 2017 units By type General Technical Descriptions (“GTD”). 10 Supply Mono 1 Prosafe units that meet the current
Slide 22: Prospects & Tendering
Prospects & Tendering Six tenders ongoing for 2018 Tendering Activity – Three Year Outlook through 2020. The prospect list with a three-year look-out remains at a high level. 22 North Sea prospects with high probability of going to tender next 3 years. Risk related to projects being pushed o
Slide 23: Rebalancing and fleet renewal to continue
Rebalancing and fleet renewal to continue Floating Accommodation Supply (by year delivered) Bifurcation of industry by legacy and modern Modern Fleet Legacy Fleet fleet: 6 5 • Legacy fleet of 18 units (6 have been (# of Units) 4 scrapped and another 7 units assumed 3 2 scrapped in ‘18-’19) 1 • Mod
Slide 24: Exploring all opportunities for strategic positioning
Exploring all opportunities for strategic positioning Mid Water | High End | Operated Drilling Support | Operated Opportunities Operated/Managed 1. Fleet enhancement 2. Consolidation 3. Pooling 4. Management agreements Exploring all opportunities for strategic positioning 24
Slide 25: Agenda
Agenda Financial results Business & Operations Outlook Strategy & Summary 25
Slide 26: Prosafe strategic focus
Prosafe strategic focus Cost and efficiency measures – protect the runway. Fleet management in anticipation of market recovery. • Fleet renewal • Scrapping Financial planning to deliver on strategic goals and to be robust in anticipation of market recovery. Consolidation and other commercial
Slide 27: Summary
Summary Good operating performance Good cash flow and position Safe Caledonia awarded a five-month contract for BP in the UK with start-up around end of May Prosafe wins Westcon dispute regarding the TSV Safe Scandinavia conversion. Westcon has appealed and Prosafe is ready to defend or impr
Slide 28: Appendix
Appendix @ Prosafe
Slide 29: Operating revenue
Operating revenue (Unaudited figures in USD million) Q1 18 Q4 17 Q1 17 2017 Charter income 67.8 70.6 66.3 256.1 Other income (incl amortization of fees) 15.0* 6.1 9.4 26.9 Total 67.8 76.7 75.7 283.0 * Q1 18 other income includes IFRS 15 revenue adjustment of USD 8.7 million 29