The quarter in brief
* ProSafe acquires Nortrans Offshore Ltd (Nortrans) for MNOK 1.764. Nortrans will be included in the consolidated profit and loss account as from 1 April 2001.
* Statoil awards ProSafe a contract for the use of the service rig Safe Britannia on the Statfjord field for 90 days in the second quarter 2001. The estimated value is MNOK 51.
* Norsk Hydro awards ProSafe a contract for provision of accommodation services on the Fram field for 60 days in 2003. The estimated value is MUSD 9.
* Statoil extends the maintenance and modification contract on the Heidrun platform. The contract lasts until the end of 2002, and has an estimated value of MNOK 100.
* The FPSO Ruby Princess gets an extension on the Ruby field offshore Vietnam for one year until the autumn of 2002. The estimated value is MUSD 28 incl. remaining six months of the current contract.
* Procon Engineering AS is sold for MNOK 118.
(Figures in brackets refer to the same period last year)
Main Figures
ProSafe achieved an operating profit of MNOK 62 in the first quarter 2001 based on a rig utilisation of 60%. The operating profit within Offshore Drilling & Related Services was MNOK 22, whilst Other Business broke even at the operating level, as expected. The business within Nortrans (Floating Production) will be included in the consolidated profit and loss account as from 1 April 2001. Procon Engineering AS is included in the consolidated accounts up to and including 28 February 2001. All items in the profit and loss account relating to this business are reported net under other items, and comparison figures are adjusted accordingly.
In the first quarter profit for the period amounted to MNOK 23 (MNOK 0). Unrealised currency loss on the company's long term debt due to the strengthening of the USD in the period amounted to MNOK 45. A strong USD is however beneficial to ProSafe as a large proportion of the revenues are generated in USD and also because the rigs are valued in USD. Cash flow equalled MNOK 75 (MNOK -45), whilst profit and cash flow per share equalled NOK 0,87 (NOK 0,02) and NOK 2,83 (NOK -1,72), respectively.
Business Areas
Offshore Support Services achieved an operating profit of MNOK 45 (MNOK 56) in the first quarter. The utilisation ratio for the rig fleet was 60%, down 7 percentage points compared to the same period last year.
Offshore Drilling & Related Services achieved an operating profit of MNOK 22 (MNOK 11) in the first quarter. The increase is attributable to Rubicon which has been on contract in the first quarter, whilst it was under mobilisation in the first quarter last year. Another factor is increased activity level within technical services.
Other Business reached an operating result of MNOK 0 (MNOK 0) in the first quarter, as expected. The order backlog for the module production business in Aberdeen amounted to MNOK 75 at the end of the quarter.
Prospects
Within Offshore Support Services, both Safe Britannia and Safe Scandinavia, which in the first quarter were actively marketed for new contracts, are engaged in the second quarter for 90 days and at least 42 days on Statfjord and Judy, respectively. Regalia commenced a contract west of Shetland in mid April, and the board is optimistic with regards to an extended contract for Safe Lancia in the Gulf of Mexico from August this year.
Within Offshore Drilling & Related Services it is expected a relatively stable development in quarterly results in the quarters ahead. The board is optimistic that the lightweight rig Rubicon will be extended on Snorre from this summer. Beyond that, the outlook for this business area is positive based on future opportunities in e.g. Baku. Business development - both geographically and in terms of new services - is also important in light of the upcoming option negotiations on amongst others Gullfaks, which may considerably impact the activity level within this business area.
The new business area, Floating Production, which comprises Nortrans will be included in the consolidated profit and loss account as from 1 April. Recently, the company achieved an extension for the FPSO Ruby Princess for one year. At the same time the conversion project Espoir is under control and on time and budget. Beyond that, the market outlook for floating production is strongly positive.
ProSafe is listed on the Oslo Stock Exchange with ticker code PRS.
Oslo 7 May 2001
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