Main figures
(Figures in brackets refer to the same period last year)
Prosafe achieved an operating profit of MNOK 141 in the third quarter 2001 (MNOK 252). Adjusted for goodwill amortisation of MNOK 17, the operating profit equalled MNOK 158. Operating profit as at 30 September was MNOK 378 (MNOK 464).
In the third quarter profit after taxes amounted to MNOK 158 (MNOK 116). Currency gain on the company's long term debt due to the weakening of the USD in the period amounted to MNOK 69. Cash flow from operating activities equalled MNOK 327 (MNOK 267), whilst earnings and cash flow per share equalled NOK 4,64 (NOK 4,40) and NOK 9,60 (NOK 10,14), respectively. Adjusted for currency gain on the company's long term debt and goodwill amortisation, earnings per share equalled 3,12. Year to date earnings per share was NOK 9,08 (NOK 8,72).
Business Areas
Offshore Support Services achieved an operating profit of MNOK 119 (MNOK 236). The utilisation of the rig fleet was 84% (100%). A gain of MNOK 20 on the sale of the Discoverer I drillship is included in the operating profit for third quarter last year.
In the third quarter, Floating Production achieved an operating profit of MNOK 10. Operating profit before goodwill amortisation equalled MNOK 27.
Offshore Drilling & Related Services achieved an operating profit of MNOK 19 (MNOK 19) in the third quarter.
Prospects
Increased international uncertainty, both politically and financially, has so far not influenced the activity level and order intake in Prosafe.
Recently, Offshore Support Services have experienced a considerable income of orders, and have only one of seven rigs available for new contracts in the fourth quarter 2001. During the spring of 2003, Safe Caledonia will be mobilised back to the North Sea in order to fulfil the company's contractual obligations towards Statoil and Chevron. Demand in the Gulf of Mexico will remain generally strong for the next 2-5 years. In the North Sea, the market seems somewhat more long-term looking than before, and the company has already secured contracts with Norsk Hydro on the Fram and Grane fields, as well as a contract with Statoil within subsea well intervention in 2003. The company will continue to develop a strategy based on a flexible fleet for use in several operating niches and in other geographical regions.
Within Floating Production the conversion of FPSO Espoir Ivoirien is on schedule. The vessel was renamed at Keppel in Singapore 22 October and will leave the yard for the Ivory Coast in November. On arrival connection and commissioning will be carried out prior to first oil which is expected in the first quarter 2002. The fixed contract is for ten years and there are ten one-year extension options with Canadian Natural Resources. The board maintains an optimistic view with regards to new contracts for both FPSO Al Zaafarana and FPSO Ruby Princess. The company has started preparations for upgrade of the tanker Grey Warrior which was acquired this summer. The activity level within the international FPSO market is high, and the board is optimistic in respect of a new contract award.
The operations within Offshore Drilling & Related Services are performing well, and the board sees interesting opportunities ahead; the commencement of the Ringhorne contract with Esso in the autumn of 2002 and a possible tender from Phillips on the Ekofisk field. The company's strategy which is based upon development of the existing contract portfolio, assessment of related services and selective internationalisation remains firm.
In light of the international fight against terrorism following the terrorist attacks on the USA, there is uncertainty attached to the development of world economy and the oil price. However, the board maintains a cautious optimism for new contract awards in the course of the next quarters. The activity level within the oil industry is traditionally lower during the winter season, and the board expects the fourth quarter to be slightly weaker than the third quarter. The start of the contract for FPSO Espoir Ivoirien and the company's market positions, focused strategy, financial solidity and the relatively robust day rate business, substantiate an optimistic view with regards to the company's continued profitability and development.
Oslo 2 November 2001
The full Interim Report including tables is available to download from the enclosed link.
