Operating profit for the first quarter came to USD 60.6 million and net profit amounted to USD 47.5 million. The utilization of the rig fleet was 83 per cent.
Financials
(Figures in brackets refer to the corresponding period of 2011)
Operating profit for the first quarter came to USD 60.6 million (USD 14.1 million). Utilisation of the rigs increased to 83 per cent (61 per cent).
Regalia, Safe Scandinavia, Safe Caledonia, Safe Concordia, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia, Safe Regency and Safe Bristolia have been fully utilised in the first quarter, while Safe Esbjerg was idle.
The day rate for Safe Concordia is subject to monthly adjustments based on currency exchange movements. In the first quarter, the average effective day rate was USD 144,500.
Safe Astoria remained at the yard throughout the first quarter, preparing for operations in Australia scheduled to commence in late May. Operating expenses for the rig amounted to USD 5.5 million in the quarter. This is considerably higher than in normal operations due to expenses relating to the contract preparations and a more intensive maintenance scheme while the rig is at the yard.
Net financial expenses for the first quarter were USD 12.5 million (USD 7.9 million). The increase is mainly related to favourable revaluation of forward exchange contracts in the first quarter of last year.
Net profit amounted to USD 47.5 million (USD 6.8 million), and earnings per share to USD 0.21 (USD 0.03).
Total assets at 31 March amounted to USD 1 378 million (USD 1 294 million), while the book equity ratio rose to 35.1 per cent (32.5 per cent). Net interest-bearing debt stood at USD 660.1 million (USD 636.3 million).
Dividend
The Board of Directors resolved on 23 May 2012 to declare an interim dividend equivalent to USD 0.133 per share to shareholders of record as of 4 June 2012. The shares will trade ex-dividend on 31 May 2012. The dividend will be paid in the form of NOK 0.79 per share on 14 June 2012.
Outlook
Six of Prosafe's rigs are on bareboat charters in Mexico for end-user Pemex. The six rigs have firm 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 beginning of August 2013.
Regalia is scheduled to operate for Talisman at the Yme field in Norway until end of August 2012.
In May 2012 Safe Scandinavia commenced operation for ConocoPhillips in Norway and thereafter the rig is scheduled to move to the UK North Sea with a firm contract until end-October 2012 and options until December 2012.
Safe Concordia is working on a three-year contract with Petrobras in Brazil. The contract expires in May 2014.
Safe Astoria has a 150-day contract with Woodside in Australia commencing May 2012. In addition Prosafe has granted the client two one-month extension options.
Safe Caledonia is at the yard undertaking a life extension project due for completion in the fourth quarter of 2012. Thereafter the rig has a firm contract with BP in UK North Sea until end-August 2013, with an additional one-month extension option.
Safe Esbjerg is currently idle.
The number of offshore installations worldwide has increased continuously since the 1970s. Many of the installations have exceeded their original design life, which has increased the need for extensive modifications. Furthermore, the technological development in combination with the high oil price has led to high activity related to improved oil recovery and tie-ins of satellite fields. Accordingly, further life extensions of the fields can be expected.
Demand in the North Sea is driven by high maintenance activity, modifications, tie-backs and redevelopments. Last year there were several large discoveries, which is positive for the long-term activity level in the North Sea. Consequently, the outlook for accommodation services over the coming years appears positive for the North Sea. With the high number of contract awards in the North Sea this year, tendering is now at a lower level than it was in the first quarter of 2012.
Demand for semi-submersible accommodation rigs in Mexico has been stable since the late 1990s and is anticipated to remain stable over the coming years. The accommodation rigs are vital in assisting Pemex with maintenance and construction projects in order to keep up the production level at the Cantarell field. In the longer term, there is potential demand in connection with new developments in deeper waters.
In Brazil, demand currently comes from the Campos basin where safety and maintenance units are assisting in connection with maintenance and upgrade of FPSOs and fixed installations. Longer term demand from other basins is expected to increase in line with anticipated growth in maintenance and modification activities.
Traditionally accommodation rigs have not been widely used in Southeast Asia/Australia. The market is still fragmented, but there has been a positive development for accommodation rigs in the region, and Prosafe has recently announced two contracts in Southeast Asia/Australia. Demand for semi-submersible accommodation rigs in the region is expected to be higher in the coming years than it has been in the past.
There are currently two semi-submersible North Sea compliant accommodation rigs under construction. Safe Boreas, owned by Prosafe, will be suitable for operations in Norway and is to be delivered in the second quarter of 2014. Floatel Victory, owned by Floatel International, will be capable of UK operations and delivery is scheduled for the first quarter of 2014. Furthermore, Floatel International has announced a Letter of Intent to build a Norway compliant rig, with delivery in the second quarter of 2014. These three rig additions will increase the number of semi-submersible accommodation rigs capable of year-round operations in the North Sea from six to nine.
All in all, the market for semi-submersible accommodation rigs is likely to be tight for the next couple of years. The visibility beyond the next three years is, as usual, limited. The new North Sea rigs entering the market in 2014 and potential new builds may affect the demand/supply balance negatively. With increasing field life, ageing infrastructure and new large discoveries, it is expected that demand will remain robust and grow in the long term.
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: Q1 2012 report, Q1 2012 presentation
Larnaca, 23 May 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
