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Prosafe SE: Fourth quarter 2012 results


February 8, 2013 - London

Operating profit for the fourth quarter came to USD 45.5 million and net profit amounted to USD 42.3 million. Operating profit for the year 2012 was USD 222.4 million and net profit for 2012 equalled USD 177.5 million. The utilization of the rig fleet was 82 per cent in 2012. An interim dividend of NOK 0.82 per share was resolved.

Financials
(Figures in brackets refer to the corresponding period of 2011)

Full year 2012
Operating profit for 2012 amounted to USD 222.4 million (USD 192.3 million), with utilisation of the rig fleet rising to 82 per cent (80 per cent). The improved result is mainly attributable to increased utilisation.

Net financial expenses for 2012 amounted to USD 44.4 million (USD 35.2 million). The 2011 figures include a net gain of USD 10.2 million arising from the sale of shares in Floatel International and a write-off of USD 4.5 million of non-amortised borrowing costs relating to the previous credit facility. In accordance with IFRS, interest totalling USD 3.7 million in 2012 paid on the new build projects and the Safe Caledonia refurbishment project has been capitalised.

Net profit for 2012 equalled USD 177.5 million (USD 158 million) and diluted earnings per share were USD 0.80 (USD 0.71).

Fourth quarter
Operating profit for the fourth quarter amounted to USD 45.5 million (USD 51.8 million). Utilisation of the rig fleet was 82 per cent (80 per cent). The decline in operating profit is mainly due to Safe Caledonia continuing its life extension upgrade at the yard during the quarter and Regalia remaining off-hire after completion of the Yme contract in the third quarter.

Safe Scandinavia, Safe Concordia, Safe Astoria, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia, Safe Regency and Safe Bristolia have been on contract throughout the fourth quarter.

Safe Concordia is operating on a long-term contract in Brazil. In the fourth quarter the average effective day rate was approximately USD 137 000.

Net financial costs amounted to USD 4.9 million (USD 14.8 million). This reduction from the 2011 figure is mainly due to a favourable fluctuation in fair value of currency forwards.

Net profit equalled USD 42.3 million (USD 36.5 million), corresponding to diluted earnings per share of USD 0.19 (USD 0.16).

Total assets at 31 December amounted to USD 1 487.2 million (USD 1 376.1 million). Net interest-bearing debt equalled USD 706.8 million (USD 667.1 million), while the book equity ratio increased to 34.6 per cent (33.6 per cent).

New build programme
Striking of steel for Safe Boreas took place at Jurong Shipyard (JSPL) in Singapore in October 2012. The rig will be ready for delivery from the yard in the summer of 2014.

In November 2012, Prosafe entered into a turnkey contract with JSPL for the construction of a second harsh environment semi-submersible accommodation rig. Delivery of the rig, which will be named Safe Zephyrus, is scheduled around year-end 2014.

With a similar design to Safe Boreas, the new unit will be the world's most advanced and versatile accommodation unit, constructed to comply with Norwegian regulations and capable of operating in the harshest environments with the highest standards of safety.

The new unit, like the Safe Boreas, will be constructed in accordance with the GVA 3000E design and equipped with a DP3 (dynamic positioning) system as well as a 12-point mooring arrangement. This will allow the rig to operate in both DP and anchored mode, providing maximum cost efficiency and flexibility. The unit will have the capacity to accommodate 450 persons in single man cabins.

Cost including yard cost, owner-furnished equipment, project management and financing is estimated at approximately USD 350 million. 20 per cent of the yard cost was paid on signing of the contract, while the remaining 80 per cent will be paid on delivery.

JSPL has also granted options for two additional new builds. These options can be exercised for units which may operate either on the Norwegian Continental Shelf or for world-wide operations outside the North Sea. In addition, Prosafe has an existing option granted as an addition to the first new build contract signed in December 2011. Accordingly, Prosafe currently has a total of three options for new builds at JSPL in addition to Safe Boreas and Safe Zephyrus.

Financing
In December 2012, Prosafe closed a five-year post-delivery term loan facility of USD 420 million to finance both Safe Boreas and Safe Zephyrus. The facility has an interest rate of 3-month LIBOR + 2.95 per cent and a repayment profile of 12 years.

On 4 January 2013, Prosafe successfully completed a NOK 500 million unsecured bond issue maturing in January 2020. In connection with this bond issue, Prosafe bought back NOK 156 million of one of the existing bonds, PRS06 PRO, with a maturity date of 14 October 2013 at 102.25.

Dividend
The Board of Directors has today resolved to declare an interim dividend equivalent to USD 0.15 per share to shareholders of record as of 18 February 2013. The shares will trade ex-dividend on 14 February 2013. The dividend will be paid in the form of NOK 0.82 per share on 28 February 2013.

Outlook
Six of Prosafe's rigs are on bareboat charters in Mexico for ultimate use by Pemex. The six rigs have contracts as follows;

Safe Bristolia until mid-March 2013, Safe Britannia until end-March 2013, Jasminia until late May 2013, Safe Regency until early August 2013, Safe Lancia until mid-September 2013 and Safe Hibernia until December 2013.

After completion of the contract in Mexico, Safe Bristolia will transit to the North Sea and commence the contract with Total in May 2013.

Regalia is currently at a yard in Hanøytangen, Norway. The rig has a contract with Shell in Norway, with a planned start-up in April 2013.

Safe Scandinavia is operating for BP in Norway until 21 February 2013. Subsequently, the rig has a contract in the UK with a planned start-up in April 2013.

In the second quarter 2011, Safe Concordia commenced a three-year contract with Petrobras in Brazil.

Safe Astoria is currently off hire following completion of the contract for Woodside in Australia in December 2012.

The Safe Caledonia life extension project has now been completed, and the rig is expected to commence the contract with BP in the UK North Sea in end-February 2013. The contract expires in March 2014.

Oil companies continue to focus on increased recovery rate, which is leading to a growing amount of maintenance, upgrade and life extension projects requiring accommodation rig support.

There is also an increasing amount of work related to hook-up and commissioning of new production installation. This is particularly visible in the North Sea market, but there is also evidence of such developments in other markets.

In summary this has lead to a busy market with a high number of prospects. There are several tenders currently outstanding, which should lead to a number of contract awards in the market during the winter and spring.

Prosafe is the world's leading owner and operator of semi-submersible accommodation/service rigs. Operating profit reached USD 222.4 million in 2012 and net profit was USD 177.5 million. The company operates globally, employs 550 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.

Larnaca, 8 February 2013
The Board of Directors of Prosafe SE
Prosafe SE

For further information, please contact:

Karl Ronny Klungtvedt, Chief Executive Officer
Prosafe Management AS
Phone: +47 51 64 25 81

Sven Børre Larsen, Chief Financial Officer
Prosafe Management AS
Phone: +47 909 43 673

Cecilie Helland Ouff, Finance and IR Manager
Prosafe AS
Phone: +47 991 09 467
 
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Q4 2012 report
Q4 2012 presentation



This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

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(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Prosafe SE via Thomson Reuters ONE

HUG#1676627

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