PRS - Operating profit of MNOK 175 in second quarter 2001

The quarter in brief

- Operating profit increases by MNOK 113 over the previous quarter

- Prosafe decides to invest MUSD 25 in MSV Regalia with the intention of becoming a leading provider to the subsea intervention market

- Statoil awards Prosafe a contract for the use of MSV Regalia for subsea well intervention work. The contract award represents a strategic break-through for Prosafe's commitment to this market niche

- Norsk Hydro exercises an option for the use of Rubicon on Snorre TLP. The option period which has a duration of one year, has a value of MNOK 120

- Prosafe wins a bareboat contract with Ocean Oil for the use of Safe Lancia on the Cantarell field in the Gulf of Mexico. The contract has a duration of one year and a value of MUSD 12,3

- Prosafe wins a contract for the provision of accommodation services in the North Sea. The contract has a fixed duration of 60 days and a value of ca. MUSD 4,3

- The conversion project Espoir is progressing as planned both in terms of costs and time. The ship has now arrived at Keppels in Singapore from the yard in the Philippines

- Prosafe's main subsidiaries are renamed:

- Prosafe Offshore Ltd (Safe Service Ltd)

- Prosafe Production Ltd (Nortrans Offshore Ltd)

- Prosafe Drilling Services AS (Procon Drilling Services AS)


(Figures in brackets refer to the same period last year)
Main figures

Prosafe achieved an operating profit of MNOK 175 in the second quarter of 2001 (MNOK 152). The business within Floating Production is included in the consolidated profit and loss account as from 1 April 2001. Adjusted for amortisation of goodwill of MNOK 17, the operating profit equalled MNOK 192.

In the second quarter, the profit after taxes amounted to MNOK 105 (MNOK 112). Unrealised currency loss on the company's long term debt due to the strengthening of the USD in the period amounted to MNOK 29. A strong USD is however beneficial to Prosafe as a large proportion of the revenues are generated in USD and also because the vessels are valued in USD. Cash flow from operating activities equalled MNOK 188 (MNOK 56), whilst earnings and cash flow per share equalled NOK 3,09 (NOK 4,26) and NOK 5,52 (NOK 2,13), respectively. Adjusted for the unrealised currency loss and amortisation of goodwill, earnings per share equalled NOK 4,44.



Business areas

Offshore Support Services achieved an operating profit of MNOK 148 (MNOK 152) in the second quarter. The utilisation of the rig fleet was 91% (91%).
In the second quarter, Floating Production achieved an operating profit of MNOK 13. Operating profit before amortisation of goodwill equalled MNOK 30.

Offshore Drilling & Related Services achieved an operating profit of MNOK 18 (MNOK 8) in the second quarter. The increase is due to a higher activity level within the platform drilling operations and the fact that the lightweight rig Rubicon has been on contract during the second quarter current year.

Prospects

Within Offshore Support Services, the board is of the opinion that the market for the company's semi-submersible service rigs in Mexico will remain strong for at least three to five years ahead. Further, the board expects that the demand for these type of rigs in the North Sea market will be stable or increasing. Currently the company is actively pursuing further engagement for Safe Britannia and Safe Scandinavia. The main objective within Offshore Support Services is to increase the flexibility of the rig fleet. A first step in this direction is the upgrade of MSV Regalia into a subsea intervention vessel. At the end of July, Prosafe received a letter of intent from Statoil ASA for the use of MSV Regalia for subsea well intervention work. This award is a strategic break-through for Prosafe's commitment to this new growth niche.

Within Floating Production the conversion of the tanker White Sea into an FPSO is on schedule, both in terms of costs and time. The ship will mobilise from the yard in Singapore to the Espoir field offshore the Ivory Coast in the fourth quarter. First oil is expected 1 January next year. The contribution from this operation will represent a significant increase in the company's results as from the first quarter next year. The board regards the market outlook within this area as very promising. The acquisition of the tanker Fantasy in July this year substantiates this market view. The ship has been renamed Grey Warrior and will be traded in the spot market until a new contract is awarded within floating production.

The growth potential within Offshore Drilling & Related Services rests within development of the existing contract portfolio, award of new contracts, added services and selective internationalisation. Thus, the company is actively pursuing different development projects both in the home market and also internationally.

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