ENP Newswire - 12 February 2014
Release date- 10022014 - Operating profit for the fourth quarter came to USD 67 million and net profit amounted to USD 59.7 million.
An interim dividend of NOK 1.00 per share was resolved. The gross value of the contract backlog amounted to approximately USD 1.7bn (incl. options) at the end of the year, by far the highest level ever seen in Prosafe's history.
Full year 2013
Operating profit for 2013 amounted to USD 245.1 million (USD 222.4 million), with utilisation of the fleet rising to 83 per cent (82 per cent). The improved result is mainly attributable to higher day rates.
In 2013, Prosafe had over 1 million exposure hours and zero lost time injuries. The company also showed positive development on other HSE measures.
Net financial expenses for 2013 amounted to USD 41.3 million (USD 44.4 million). In accordance with IFRS, interest costs totalling USD 4.5 million (USD 3.7 million) have been allocated to new build and refurbishment projects, and consequently capitalised as part of the vessel costs.
Net profit for 2013 equalled USD 199.1 million (USD 177.5 million) and diluted earnings per share were USD 0.85 (USD 0.80).
Operating profit for the fourth quarter amounted to USD 67 million (USD 45.5 million). Utilisation of the fleet was 82 per cent (82 per cent). The rise in operating profit is mainly due to higher day rates.
Safe Caledonia, Safe Concordia, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia and Safe Regency were in full operation throughout the quarter.
Safe Concordia was on contract in Brazil and the average effective day rate in the quarter was approximately USD 141 000.
Safe Caledonia continued operation for BP in the North Sea during the quarter.
Safe Scandinavia completed the contract with ConocoPhillips UK on 12 November, and is currently undertaking a life extension refurbishment and a five-year special period survey (SPS) at the Remontowa yard in Gdansk in Poland, before commencing a contract with Statoil in Norway.
Regalia completed operations for Shell on 24 November. The vessel is currently at Keppel Verolme in the Netherlands for refurbishment work and a five-year SPS. The vessel will subsequently operate for Statoil in Norway.
Safe Bristolia was in full operation for Elf Exploration in UK until 20 December and is scheduled to commence the next contract in April 2014.
Safe Astoria remained at the yard in Batam until 26 December, when she started mobilising for a contract with Swiber in Indonesia. The vessel earned a mobilisation day rate until operations commenced on 5 January 2014.
Net financial costs amounted to USD 6.8 million (USD 4.9 million). Interest income is down due to the settlement of the seller's credit agreement entered into in relation to the sale of Safe Esbjerg in 2012.
Net profit equalled USD 59.7 million (USD 42.3 million), corresponding to diluted earnings per share of USD 0.25 (USD 0.19).
Total assets at 31 December amounted to USD 1 618 million (USD 1 487.2 million). Net interest-bearing debt equalled USD 666.2 million (USD 706.8 million), while the book equity ratio increased to 45.7 per cent (34.6 per cent).
In November 2013, Prosafe completed firm turnkey contracts with COSCO (Qidong) Offshore Co., Ltd. for the engineering, procurement and construction of two semi-submersible accommodation vessels, with options for four further units.
The vessels will be the most advanced and flexible units for worldwide operations excluding Norway, and will be ready for operations in 2016.
The vessels will be of Gusto MSC's Ocean 500 design, and will be equipped with 500 beds, DP3 station keeping systems, 10-point chain mooring and 300 tonne cranes.
Total value of the of the contracts is in excess of USD 400 million, and the vessels will be financed through cash flow from operations, existing debt facilities and new debt commitments.
In 2011 and 2012, Prosafe ordered two Norway compliant semi-submersible accommodation vessels, Safe Boreas and Safe Zephyrus, from Jurong Shipyard Pte Ltd. in Singapore. The construction process is going well, and when delivered, the vessels will be the most sophisticated and well-equipped accommodation vessels in the market.
Both vessels have already secured contracts, with Safe Boreas going to work for Lundin Petroleum in Norway for a minimum six-month period from Q2 2015. Safe Zephyrus is scheduled to work for Statoil in UK for eight months commencing in the spring of 2016. Statoil also has an option to extend the contract for up to a total of three years.
The Board of Directors has resolved to declare an interim dividend equivalent to USD 0.16 per share to shareholders of record as of 18 February 2014.
The shares will trade ex-dividend on 14 February 2014. The dividend will be paid in the form of NOK 1.00 per share on 28 February 2014.
Possible UK Tax Changes
In its Autumn Statement 2013, HM Revenue & Customs in the UK proposed changes to the taxation of offshore contractors. Depending on the final outcome this may increase the tax cost in respect of contracts for operations in the UK.
Prosafe saw a strong contract inflow during 2013, and the gross value of the contract backlog amounted to approximately USD 1.7bn (incl. options) at the end of the year, by far the highest level ever seen in Prosafe's history.
The accommodation market remains busy with a large amount of enquiries from clients both in the North Sea and the rest of the world. There are, however, fewer tenders taking place than at the same point in time last year, and it is likely that the contract inflow in 2014 will be lower than the record level experienced in 2013.
The underlying long-term demand drivers remain positive. Oil fields are constantly growing older at the same time as the prospects for increased oil recovery is improving. This in turn bodes well for demand for services related to maintenance, modifications and upgrades. Furthermore, there are several large hook-up and commissioning projects in the pipeline, particularly in Norway, although the pace of new developments in the period from 2017 to 2019 could be lower than in the period from 2014 to 2016.
A number of new semi-submersible accommodation vessels are scheduled to enter the market over the next couple of years. The supply side is anticipated to almost double in size during the period from 2012 to 2016. This increase in part is as a consequence of a possible under-supply situation historically and partly as a consequence of a positive underlying demand development which has arisen during the past years. Furthermore, it should be noted that the growth in number of units is made up by vessels of a varying degree of quality, both in respect of technical specifications, owners' operating capabilities and financing structures.
In addition to being the world's largest owner and operator of semi-submersible accommodation vessels, the company also has the longest track-record in terms of operations and HSEQ. Furthermore, it has the most efficient cost structure through economies of scale, the world's most cost efficient fleet and an efficient financing structure. Accordingly, Prosafe is well placed to further enhance its position in the accommodation market over the coming years.
Prosafe is the world's leading owner and operator of semi-submersible accommodation/service rigs. Operating profit reached USD 245.1 million in 2013 and net profit was USD 199.1 million. The company operates globally, employs 610 people and is headquartered in Larnaca, Cyprus. Prosafe is listed on the Oslo Stock Exchange with ticker code PRS.
For more information, please refer to www.prosafe.com
Karl Ronny Klungtvedt
Chief Executive Officer
Prosafe Management AS
Tel: + 47 51 64 25 81
Sven Borre Larsen
Chief Financial Officer
Prosafe Management AS
Tel: +47 51 64 25 30