Q3 2021 results and business update
Disclaimer
All statements in this presentation other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believe", "may", "will", "should", "would be", "expect" or "anticipate" or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation as anticipated, believed or expected. Prosafe does not intend, and does not assume any obligation to update any industry information or forward-looking statements set forth in this presentation to reflect subsequent events or circumstances.
- Update on the financial restructuring process
- Highlights
- Financial results
- Commercial update & Summary
Update on financial restructuring process
- The financial process is on track with formal support from all lenders.
- The EGM approved the solution on 27 September 2021
- Agreement with Westcon reached on 14 October 2021
- The Singapore Scheme was sanctioned on 18 October 2021
- The Norwegian creditor process commenced on 22 October 2021 with creditor's voting set for 8 November 2021
- The company continues to anticipate that the financial restructuring will be completed and become effective before year end 2021
- As announced on 4 June 2021, the terms of the Transaction will result in a significant de-leveraging of the balance sheet with ca. 75% debt reduction, debt service based on cash sweep and a more robust financial position.
- Gross bank debt will be USD 343 million* after restructuring. Existing banks/creditors will own 99% of the equity and current shareholders and convertible bond holders will own 1% of the equity.
* Excl. Safe Eurus which is financed from the yard
- Update on the financial restructuring process
- Highlights
- Financial results
- Commercial update & Summary
Highlights – Q3 2021
Income statement
| (Unaudited figures in USD million) |
2021 |
2020 |
|
|
|
| Operating revenues |
46 |
12 |
| Operating expenses |
(33) |
(13) |
| Operating results before depreciation |
13 |
(1) |
| Depreciation |
(8) |
(8) |
| Operating (loss) profit |
4 |
(9) |
| Interest expenses |
(8) |
(14) |
| Other financial items |
(5) |
(1) |
| Net financial items |
(13) |
(15) |
| (Loss) Profit before taxes |
(8) |
(24) |
| Taxes |
(1) |
(0) |
| Net (Loss) Profit |
(9) |
(24) |
|
|
|
| EPS |
(0.10) |
(0.28) |
| Diluted EPS |
(0.10) |
(0.28) |
Q3
- Fleet utilisation of 70.9% (Q3 2020: 16.4%)
- Higher operating revenues and expenses mainly due to high activity level and high utilisation for the quarter
- EBITDA was USD 13 million (USD 1 million negative). The increase in EBITDA was mainly driven by high vessel activity
- Other financial items are costs relating to the financial restructuring process
Balance sheet
| (Unaudited figures in USD million) |
30.09.21 |
30.09.20 |
|
|
|
| Vessels |
400 |
419 |
| New builds |
0 |
1 |
| Other non-current assets |
2 |
3 |
| Total non-current assets |
403 |
423 |
| Cash and deposits |
107 |
165 |
| Other current assets |
40 |
14 |
| Total current assets |
147 |
179 |
| Total assets |
550 |
602 |
|
|
|
| Share capital |
10 |
9 |
| Other equity |
(1,070) |
(932) |
| Total equity |
(1,060) |
(923) |
| Interest-free long-term liabilities |
2 |
14 |
| Interest-bearing long-term debt |
80 |
80 |
| Total long-term liabilities |
82 |
94 |
| Other interest-free current liabilities |
32 |
24 |
| Current portion of long-term debt |
1,496 |
1,406 |
| Total current liabilities |
1,527 |
1,430 |
| Total equity and liabilities |
550 |
602 |
| Key figures: |
|
|
| Working capital |
(1,380) |
(1,252) |
| Liquidity reserve |
107 |
165 |
| Interest-bearing debt |
1,576 |
1,486 |
| Net Interest-bearing debt |
1,469 |
1,322 |
| Book equity ratio |
(192.8)% |
(153.4)% |
Total assets of USD 550 million
Fleet status: Contracts, wins and extensions
Safe Vega and Safe Nova – newbuilds at yard
Contract backlog Contracting update
- Safe Concordia: commenced a 117-day contract in Trinidad on 25 July 2021. The contract was extended by 35 days with a further 42 days of options available
- Safe Notos: on contract with Petrobras through to at least 19 November 2021
- Safe Eurus: on contract with Petrobras
- Safe Zephyrus: completed Shell Shearwater contract on 7 August. Awarded a 10-month firm contract plus four one-month options by bp for operations at ETAP, UKCS
- Safe Boreas: completed the contract with CNOOC on 15 October and is now in the yard preparing for a 90 day contract with an option of up to 60 days and startup in Q2 2022 on the NCS.
- Safe Caledonia: commenced a 162-day contract with TotalEnergies in late March 2021 with both 15-day options and a further 24 days of option exercised. In addition, TotalEnergies has awarded a 270-day contract plus one 30-day option commencing mid-March 2022. The vessel will remain in-field over the winter period in between the two contracts
- Safe Scandinavia: in lay-up and is being actively marketed
Order backlog per Q3 2021 (USD million)
* The recently awarded contract by TotalEnergies is not included in orderbook per Q3 2021
Summary
- The financial restructuring process is on track with closing anticipated before or around year-end 2021
- High utilization (70.9%) and reported EBITDA of USD 12.5 million
- Liquidity reserve of USD 107.1 million
- Positive cash flow from operations of USD 17.3 million (USD 12.3 million negative)
- Good operational and HSE performance
- 6 of 7 vessels were on contract in the quarter
- Further options for Safe Boreas, Safe Zephyrus, Safe Caledonia and Safe Concordia were exercised
- Safe Zephyrus was awarded a 10-month contract with up to 4 months options by bp
- Safe Caledonia was awarded a 9-month contract with one 30-day option by TotalEnergies after the quarter. The vessel will remain in-field over the winter period in between the current and the new contract
- Ongoing bids in Brazil
- Initiatives in process to strengthen ESG profile
- Consolidation remains on the agenda
Appendix
Development of operating results
Liquidity reserve & Net interest-bearing debt
Operating revenue
| (USD million) |
Q3 21 |
Q3 20 |
Q2 21 |
2020 |
|
|
|
|
|
| Charter income |
39.4 |
10.9 |
43.2 |
53.0 |
| Other income |
6.4 |
0.8 |
6.7 |
3.7 |
| Total |
45.8 |
11.7 |
49.9 |
56.7 |