Offshore Support Services
The operating profit for the first quarter came to USD 13.0 million (USD 4.9 million). The reason for the improved result is higher fleet utilisation (87% versus 64%).
All five rigs which are located in the Gulf of Mexico have been in regular operation throughout the first quarter. MSV Regalia has operated off west Africa, and Safe Caledonia has operated in the Timor Sea. Safe Scandinavia has been off-hire during the first quarter.
Floating Production
The operating profit for the first quarter amounted to USD 5.6 million (USD 3.6 million). The main contributor to the improved result was Abo FPSO which went on contract in mid February 2003. Beyond this, the result for the period has been favourably impacted by a cost compensation for FPSO Petróleo Nautipa and low maintenance costs.
Drilling Services
The operating profit for the first quarter equalled USD 2.0 million (USD 4.5 million). The reason for the decreased profit is mainly that the lightweight rig Rubicon has been off-hire during the first quarter this year. The first quarter is normally the weakest quarter for this division.
Outlook
Within Offshore Support Services, the company has during the first quarter been awarded a 12 months contract excluding options for Safe Caledonia off west Africa in 2004/2005, and a four months and 20 days contract excluding options for MSV Regalia on Visund in 2005. The combined fixed contract value is USD 55 million. Subsequent to this, the rig fleet is secured an utilisation of 87% in 2004, 75% in 2005, 62.5% in 2006/2007 and about 30% in 2008.
The company has a positive view on the market outlook, both in the North Sea and internationally. Even with more tonnage entering the market, Prosafe will remain the dominant player with a quality fleet and solid earnings. In sum, the company is well positioned for coming periods.
Within Floating Production, the market has been characterised by few projects and postponements over the last 18 months. The activity is now starting to pick up, and new opportunities have been identified, both in Australasia, west Africa and Brazil. The company's target is to win a new FPSO project in the course of 2004 in line with the company's stated strategy.
Within Drilling Services, the main focus in 2004 is to secure a new contract for Rubicon, as well as the Tampen tender for Statoil. Prosafe is optimistic with regards to Rubicon, and is also of the opinion that the company has delivered a good and competitive bid on Tampen. Pricing competition will probably influence the results from this division adversely for a period after Tampen, but safe and cost-efficient operations should over time secure a continued good profitability. Beyond this, the board sees opportunities to develop the company's new technology and well division which focuses on Rubicon, subsea well intervention, underbalanced operations, cyclone technology and well plugging.
Prosafe has a solid contract backlog and a strong financial position. This enables the company to have a competitive dividend policy. It further enables the company to continue to develop its business in line with the stated strategy within the various divisions.
Oslo, 4 May 2004
