Operating profit for the third quarter came to USD 66.5 million and net profit amounted to USD 51.8 million. The utilization of the rig fleet was 85 per cent. An interim dividend of NOK 0.75 per share was resolved.
Financials
(Figures in brackets refer to the corresponding period of 2011)
Operating profit for the third quarter amounted to USD 66.5 million (USD 69.0 million). Utilisation of the rig fleet was 85 per cent (91 per cent). The main reason for the reduction in operating profit is the lower utilisation.
Safe Scandinavia, Safe Concordia, Safe Astoria, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia, Safe Regency and Safe Bristolia have been on contract throughout the third quarter.
Safe Concordia is operating on a long-term contract in Brazil. In the third quarter the average effective day rate was approximately USD 136 000.
Safe Scandinavia was in full operation during the third quarter.
Regalia was in operation at Yme until 31 August.
Safe Astoria continued its operation in Australia throughout the third quarter.
Safe Caledonia remained at the yard throughout the third quarter undertaking a life extension upgrade.
Safe Esbjerg was divested on 7 August 2012. A gain of USD 4.8 million has been recognised as operating revenue in the quarter.
Net financial costs amounted to USD 13.7 million (USD 6.4 million). The 2011 figures include a net gain of USD 10.2 million on the sale of the shares in Floatel International and a write-off of USD 4.5 million of non-amortised borrowing costs relating to the previous credit facility.
Net profit equalled USD 51.8 million (USD 62.8 million), corresponding to diluted earnings per share of USD 0.23 (USD 0.28).
Total assets at 30 September amounted to USD 1 449.4 million (USD 1 324.5 million). Net interest-bearing debt equalled USD 661.5 million (USD 611.2 million), while the book equity ratio increased to 34.5 per cent (34.2 per cent).
Dividend
The Board of Directors has today resolved to declare an interim dividend equivalent to USD 0.133 per share to shareholders of record as of 12 November 2012. The shares will trade ex-dividend on 8 November 2012. The dividend will be paid in the form of NOK 0.75 per share on 22 November 2012.
Letter of Intent for second new build
On 4 October Prosafe issued a Letter of Intent for the construction of a semi-submersible accommodation rig at Jurong Shipyard Pte Ltd ("JSPL") in Singapore. The rig, which is of similar design as Safe Boreas presently in construction at JSPL, will be built to comply with Norwegian regulations. The rig will be ready for operations in the North Sea in 2015 (exact delivery date to be determined in the final yard contract).
In addition, JSPL has granted two options for further new builds, meaning that in total, Prosafe now has options for three new builds at JSPL. The additional two options can be designed for either the Norwegian Continental Shelf or for world-wide operations outside of Norway.
Prosafe has received bank commitments for a five-year loan facility of USD 420 million to finance both Safe Boreas, which was ordered in December 2011, and the new unit.
Outlook
Six of Prosafe's rigs are on bareboat charters in Mexico for end-user Pemex. The six rigs have contracts as follows;
Safe Hibernia until December 2013, Safe Lancia until end-December 2012, Jasminia until end-December 2012, Safe Britannia until mid-January 2013, Safe Bristolia until end-March 2013 and Safe Regency until the beginning of August 2013.
Regalia is currently at a yard in Hanøytangen, Norway. The operating expenses are expected to increase somewhat in the fourth quarter due to off-hire costs and maintenance. 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 December 2012. Thereafter the rig has a contract in the UK, with a planned start-up in April 2013.
In the second quarter 2011 Safe Concordia commenced on a three-year contract with Petrobras in Brazil.
Safe Astoria has a 180-days contract with Woodside in Australia which commenced in May 2012. In addition there is a one-month option.
The Safe Caledonia life extension project is scheduled for completion at approximately year-end 2012. Subsequently, the rig will commence on a 15-month contract for BP in the UK North Sea.
The general outlook for the accommodation rig market is positive. The trend of increasing field life continues, resulting in a growing need for services related to maintenance and modification projects. Further, there has been an increasing amount of prospects related to hook-up and commissioning of new fields, particularly in the North Sea, where there have been a number of significant finds over the past year. In general, the lead time tends to be longer for hook-up and commissioning jobs (2-3 years) than for maintenance and upgrade jobs (1-2 years).
The North Sea market remains fairly busy, with high activity both with regards to work on existing fields and hook-up and commissioning of new fields. Lead times between contract award and start-up of the work has increased and opportunities as long as three years into the future are being discussed. However, there have not been any changes with regards to contract lengths and seasonal pattern. Almost all contracts are still less than 12 months duration and opportunities remain greater in the summer season than in the winter season.
Mexico has been a stable market for many years. Recently the activity level with regards to production drilling and construction has been high, which should bode well for demand for offshore accommodation going forward.
The growth outlook in the Brazilian market appears promising. There are currently three offshore accommodation units working in the Campos basin, and it is likely that more units will be needed in the short-to-medium term. In the long-term there should also be a significant growth potential in other areas. It has, however, proven difficult to generate an appropriate return in this market, mainly as a result of inflated cost levels, which could limit the long-term growth in number of units in this market.
Demand in other parts of the world tends to be volatile, although there seems to have been an underlying positive development over the past few years. Of these markets, Australia appears to be the most promising for the time being, with certain identified prospects.
Prosafe is the world's leading owner and operator of semi-submersible accommodation/service rigs. Operating profit reached USD 192.3 million in 2011. 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.
Attachments: Q3 2012 report, Q3 2012 presentation
Larnaca, 1 November 2012
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 51 64 25 20 / +47 991 09 467
