Quarterly Report • Oct 27, 2022
Quarterly Report
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| Directors' report | 4 |
|---|---|
| Accounts | 12 |
| Consolidated statement of profit or loss | 12 |
| Consolidated statement of balance sheet | 13 |
| Consolidated statement of cash flows | 14 |
| Consolidated statement of equity | 15 |
| Notes to the accounts | 16 |
| Note 1 General | 16 |
| Note 2 Management reporting | 17 |
| Note 3 Segment information | 18 |
| Note 4 Operating revenue | 18 |
| Note 5 Tangible assets | 19 |
| Note 6 Contract costs | 19 |
| Note 7 Investment in joint ventures and associates 20 | |
| Note 8 Cash and cash equivalent | 20 |
| Note 9 Interest bearing liabilities | 21 |
| Note 10 Transaction with related parties | 23 |
| Note 11 Events after balance date | 23 |
| Note 12 Share capital and shareholders | 24 |
| Note 13 Performance measurements definitions | 25 |
| Supplemental information | 26 |
| Consolidated statement of profit or loss | 26 |
| Consolidated statement of profit or loss | 26 |
|---|---|
| Consolidated statement of balance sheet | 27 |
| Consolidated statement of cash flows | 27 |
| Key figures | 27 |
Contacts Mons S. Aase, CEO Tel, 91661012
Hilde Drønen, CFO Tel, 91661009
Report distribution & webcast The Q3 2022 financial report for DOF ASA is to be published on 27th of October, 2022. A financial webcast will be held on the day of publication at 08:30 (CET) and will be available on the Company website: www.dof.com. All materials, including an investor presentation, will be available on the same website.
The interim consolidated financial statements have not been subject to audit or review.
3rd Quarter 2022
| Management reporting | Financial reporting | |||||
|---|---|---|---|---|---|---|
| (MNOK) | Q3 2022 | Q3 2021 | Q3 2022 | Q3 2021 | ||
| Operating revenue | 2 862 | 2 052 | 2 466 | 1 738 | ||
| Net gain on sale of tangible assets | 18 | 44 | 18 | 44 | ||
| EBITDA | 1 030 | 865 | 864 | 695 | ||
| Depreciation | -352 | -335 | -264 | -248 | ||
| Impairment | - | -42 | - | -42 | ||
| EBIT | 678 | 488 | 600 | 405 | ||
| Net interest costs | -388 | -30 | -335 | 14 | ||
| Net currency and derivatives | -738 | -641 | -745 | -582 | ||
| Profit (loss) | -519 | -128 | -519 | -128 | ||
| NIBD (Net interest bearing debt) | 23 159 | 19 847 | 19 404 | 16 631 | ||
| NIBD (Net interest bearing debt) excluded effect of IFRS 16 | 22 913 | 19 678 | 19 158 | 16 462 | ||
| Equity ratio | -9% | -5% | -10% | -6% |
The ESG figures, where appropriate, are shown in comparison with previous year, as rolling average, or as running numbers. The dashboard contains results from key, non-financial, targets established in DOF and quarter over quarter trends are indicated with trend symbols. Read more about how we selected these targets in our integrated annual report 2021.
The trend markers are in relation to the previous quarter. See DOF ASA financial report Q2 2022 to compare figures.
Positive trend in result Negative trend in result No significant change in result
Q3 Operations
The Q3 operational result per segment is as follows;
| (MNOK) | PSV | AHTS | Subsea | Total |
|---|---|---|---|---|
| Operating revenue | 131 | 350 | 2 381 | 2 862 |
| Net gain on sale of tangible assets | - | - | 18 | 18 |
| Operating result before depreciation | ||||
| and impairment - EBITDA | 38 | 139 | 853 | 1 030 |
| Depreciation | 24 | 67 | 261 | 352 |
| Impairment | - | - | - | - |
| Operating result - EBIT | 14 | 72 | 592 | 678 |
| EBITDA margin | 29% | 40% | 36% | 36% |
| EBIT margin | 10% | 20% | 25% | 24% |
The main part of the Group's PSV and AHTS fleet operates on time charter (TC) contracts or in the spot market, while the Subsea fleet is mainly utilised on long-term services contracts or on shorter project contracts. The scope executed from the Group's subsea fleet and parts of the AHTS fleet varies from survey, IMR, construction, decommissioning and SURF both within Oil and Gas and renewables.
The PSV fleet includes operation of 11 vessels, of which one vessel is owned via a minority share. The majority of the fleet have operated on firm contracts in the North Sea and the fleet has achieved an average utilisation rate of 89% (81%) in 3rd quarter. One vessel has been reactivated from lay-up and has partly operated in the spot market in the period. The activity in the North Sea market continued to improve during the quarter with increased rates both in the term- and spot market. Equinor Energy AS has exercised its option to extend the firm period of the contract for Skandi Flora by one year. The extension is applicable from 4th of October.
The AHTS fleet includes operation of 15 vessels including four vessels on management. The majority of the fleet operates in Brazil, and the remaining fleet (six vessels) are operating in the North Sea and in the Asia-Pacific region. The average utilisation for the AHTS fleet (owned) has been 74% versus 80% last year. The North Sea market was busy in the start of the quarter, but slower in August and September. The vessels on term contracts have achieved good utilisation. Skandi Iceman was committed on the Hywind Tampen in July and in August. The activity in Brazil has been impacted by class dockings and mobilisations to the new contracts awarded by Petrobras in the previous quarter. Most of the vessels operated by the Group are equipped with ROVs, which are owned and operated by DOF Subsea. Parts of the AHTS vessels have frequently been used on projects in DOF Subsea.
By the end of the quarter, the Group operated a fleet of 28 Subsea vessels, including one vessel on management and two vessels hired in from external owners. The majority of the fleet is owned by the subsidiary DOF Subsea AS. The overall utilisation of the owned Subsea fleet was 94% versus 86% in the same period last year. Geosea (built 2002) was sold and delivered to the new owner based on a purchase option which was exercised in 1st quarter this year.
The total revenues from Subsea IMR project contracts amounted to NOK 1,703 million (NOK 1,087 million) in the quarter.
In the Asia-Pacific region, the Group has conducted IMR work under two long-term contracts for Shell in the Philippines and in Australia. The two remaining vessels in the region have been working on various construction and IMR projects, mainly in Australian waters. The region has achieved better performance even though the quarter has been impacted by class-docking and mobilisation to a new contract. Skandi Darwin completed its class-docking and mobilisation in August and has started on the 3+2-year contract with Esso Australia. The project activity in the Atlantic region continued to be high in the quarter. One vessel has been working as a field support vessel (FSV) offshore Angola, and one vessel has been utilised within the offshore wind industry for a key renewable client in the North Sea. The region has during the quarter continued executing the Hywind Tampen project, utilising Skandi Iceman, as well as chartering in external vessels. During the quarter the region has been awarded multiple new contracts including one SURF contract with a major oil & gas operator in the Mediterranean utilising Skandi Acergy. Another award is a FPSO mooring rectification project in West- Africa utilising Skandi Skansen as the main installation vessel. The region has been awarded an early phase study for the purpose of detailing cessation of a field in the North Sea. The utilisation in the North America region has improved during the quarter with two of the Group's vessel working respectively on a SURF project in Gabon and mooring project in the Gulf of Mexico. The Group has also executed IMR and installation work for Cenovus in Canada and the services to the client has been expanded to cover all engineering for the IMR and installation tasks. The region has entered into an agreement with Otto Candies for the charter of the Jones Act compliant vessel Chloe Candies for a firm period of one year with two years options with expected commencement in 4th quarter. The region has been awarded several contracts with major operators in the Gulf of Mexico, securing utilisation for the regions two Jones Act compliant vessels for 2022 and 2023.
In the Brazil region, the Group has operated multiple vessels on a survey and inspection project (PIDF), a diving vessel and an IMR vessel, all for Petrobras, and the Skandi Neptune on a seismic node project. The region has further been awarded 3-year IMR contracts for the Skandi Chieftain, Skandi Olympia and Skandi Commander with Petrobras with start-up in direct continuation with the existing contracts, except for the Skandi Commander which will be utilised on the PIDF project until August 2023 and then commence the new contract. The PLSV fleet has continued to operate on firm contracts and has achieved a utilisation of 96% (93%) in the quarter. In the DOFCON JV, Skandi Vitoria commenced a 3-year contract. ESG (Environmental, Social, and Governance) Q3 The Group continued delivery of consistent ESG results in 3rd quarter 2022 when compared to the last two quarters. Occupational health and safety results for the quarter, with a total recordable injury rate of 2.64 per million manhours is up from last quarter, however all incidents with a low risk factor and no permanent disabilities. The losttime injury frequency rate of 1.32 per million man-hours is an increase from previous quarter. Within Marine and Subsea service delivery, the operational uptime for vessels was 99.5%* (*Vessels managed by DOF Management) in the quarter, and operational uptime for ROV was 99.4%. Regarding Governance, the number of NCRs and audits are stable, although there are small variations. There have been no fines or non-monetary sanctions due to non-compliance.
There was one significant spill in the quarter with 80 litres released to external environment.
Regarding people, the headcount per end of quarter was 3,803 and absence rate due to sickness was 2.8%. There were no data privacy breaches. There were no harassment cases confirmed through investigation in the quarter.
During the quarter, several improvement projects have been initiated like "digital fleet", and a task force for cyber security with strengthened defense and focus on prevention. There has also been a strengthened focus on the cultural aspect of digitalisation. A remote ROV operations room has been established at corporate office in Bergen with success and ready for testing in Q4. A decarbonisation roadmap towards 2030-50 is finalised and will be issued for approval in late 2022. Substantial efforts have been made to develop videos supporting DOF's workbook. The workbook is the backbone of internal training for DOF's employees and subcontractors. The material will be made publicly available on DOF's external webpage.
| Profit or Loss | ||
|---|---|---|
| (MNOK) | Q3 2022 | Q3 2021 |
| Operating revenue | 2 466 | 1 738 |
| Net gain on sale of tangible assets | 18 | 44 |
| EBITDA | 864 | 695 |
| Depreciation | -264 | -248 |
| Impairment | - | -42 |
| EBIT | 600 | 405 |
| Net interest costs | -335 | 14 |
| Net currency and derivatives | -745 | -582 |
| Profit (loss) | -519 | -128 |
The revenue and Ebitda are higher compared to last year mainly due to increased activity on subsea projects and high utilisation of the fleet. The DOFCON fleet has operated on firm contracts with stable utilisation and achieved an Ebitda of NOK 150 million versus NOK 85 million last year. (ref. Note 2). The gain from sale of assets represents sale of subsea equipment. The AHTS and PSV segment achieved Ebitda in line with 3rd quarter last year. Value in use calculations and updated broker estimates indicates no impairment this quarter. The fair market values of the Group's vessels received from two independent companies have increased with 2% (before currency effects) since last quarter.
The net interest costs are NOK -335 million (NOK 14 million). The net interest costs last year include a gain of NOK 249 million due to a repurchase of a loan facility in DOF Subsea. The net loss on currencies and derivatives of NOK -745 million (NOK -582 million) represent mainly unrealised currency loss on USD debt in the subsidiaries Norskan Offshore Ltda. and DOF Subsea Group. The Group is not in a position to do interest rate hedges, hence, the Group interest expense is and will be impacted by increase in interest rates.
Cash flow from Q3 2022
| (MNOK) | Q3 2022 | Q3 2021 |
|---|---|---|
| Operating result | 600 | 405 |
| Depreciation and impairment | 264 | 290 |
| Gain (loss) on disposal of tangible assets | -18 | -44 |
| Share of net income from associates and joint ventures | -150 | -81 |
| Changes in working capital | -136 | -48 |
| Exchange rate effects on operating activities | 48 | -15 |
| Cash from operating activities | 607 | 506 |
| Net interest and finance cost, and taxes paid | -75 | -74 |
| Net cash from operating activities | 532 | 432 |
The net operational cash flow in the quarter was NOK 532 million (NOK 432 million) and is higher compared to last year mainly due to improved operational cash flow from the PSV and AHTS segment. The net cash flow from investments was negative by NOK -35 million (NOK -115 million) and include sale of Geosea, sale of ROVs and class dockings. The cash flow from finance activities of NOK -166 million (NOK -319 million) represent debt service in Norskan Offshore Ltda., lease facilities in DOF Subsea and repayment of the Geosea loan facility.
| (MNOK) | 30.09.2022 | 30.09.2021 |
|---|---|---|
| Non-current assets Current assets Cash and cash equivalents Total assets |
16 333 2 835 2 201 21 369 |
15 226 2 299 1 598 19 123 |
| Equity | -2 212 | -1 106 |
| Non-current liabilities | 304 | 264 |
| Current liabilities | 23 277 | 19 965 |
| Total equity and liabilities | 21 369 | 19 123 |
| Net interest bearing debt (NIBD) | 19 404 | 16 631 |
| Net interest bearing debt (NIBD) excl. effect IFRS 16 |
19 158 | 16 462 |
The non-current assets include vessels, ROVs and the DOFCON JV shares which represent book values of NOK 12,398 million (NOK 12,458 million) in vessels and subsea equipment and NOK 3,740 million (NOK 2,593 million) for the shares in the DOFCON JV. The non-current assets represent 76% of the Group's total assets. The increase in value of non-current assets is impacted by a strong USD rate in the period. Due to a weak net result in the quarter mainly related to unrealised currency losses, the negative value of the equity has increased to NOK -2,212 million (NOK -1,106 million). Non-current liabilities include long-term lease agreements. All remaining liabilities have been classified as current due to standstill agreements with the lenders and that the restructuring agreement is yet to be approved by the bondholders and the shareholders of the Company (ref. note 9). The interest-bearing debt has further been increased by NOK 3,107 million since year-end 2021 mainly due to a significant strengthening of the USD towards NOK and BRL and capitalised interest costs.
The Group's total interest-bearing debt by end of the quarter is NOK 21,708 million (NOK 18,384 million) of which bond debt is NOK 3,739 million (NOK 2,593 million). The main portion of the debt is drawn in USD.
The Group has signed a Restructuring Agreement (RA) which include the Company's debt and the Group subsidiaries debt (excluding the debt in the DOFCON JV). The RA has been entered into with all the secured lenders and the adhoc group of bondholders in DOF Subsea's three bond issues controlling approximately 40% of the total outstanding amount of the bonds. BNDES (Brazilian Development Bank) has further given their consent to the RA.
Highlights in the RA include the following:
With the exception of certain guarantee-liabilities, and ringfenced structures, the surviving debt of the Group shall be reinstated as (i) new facilities with maturity on 9th of January 2026 and generally extended amortisation schedule and reduced interest costs and (ii) new bonds with no cash debt service with maturity on 17th of December 2027.
The DOFCON JV is not part of the standstill agreements and serves its debt according to the terms in the relevant loan facilities. Financial covenants related to the Group's 50% guarantee of the DOFCON loan facilities have been waived.
The RA remains to be approved by the bondholders in DOF Subsea AS in a bondholder meeting on 7th of November and by the shareholders in the Company in an extraordinary general meeting on 11th of November.
The parties to the RA have agreed on how to implement
the Restructuring should the shareholders not approve the Restructuring in the extraordinary general meeting with the following implementation steps; Step 1: a reconstruction with the existing shareholders to retain 1% post the restructuring, Step 2: if step 1 cannot be implemented, the implementation will be done via bankruptcy with existing shareholders retaining no equity interest.
See further details in the press releases issued on 22nd of June 2022 and 13th of October 2022.
By the 30th of September, the share capital was NOK 316 million divided into 316 million shares. The main shareholder Møgster Offshore AS controls 31.6% of the Company.
The Oslo Stock Exchange has decided to put DOF ASA, ISIN: NO0010070063 to Recovery Box which is a special compartment where the Oslo Stock Exchange can place securities where the issuer is subject to circumstances that make pricing of the shares particularly uncertain.
By 30th of September 2022 the share price was NOK 1.26/share and by date of this report the share price is 0.77/share.
The Group has been awarded new contracts after the balance date. See note 11.
The Group has on the 13th of October, agreed alternative implementation steps for the Restructuring if the Restructuring is not approved by the shareholders. See further details in note 11.
The O&G markets have improved as several regions have seen increased activity and the Group has built a substantial backlog year to date. The war in Ukraine has had an impact on the increased oil and gas prices but has also created instability in the world economy and this situation might have an impact on the markets going forward.
The Group's interest bearing debt has increased by approximately NOK 3 billion year to date due to a strengthened USD and the interest rates have further increased significantly which will impact the liquidity going forward. Even though there are market improvements the Group's current financial position is not sustainable, and the equity is lost. The Group has since 2nd quarter 2020 worked on finding a long-term refinancing solution with all stakeholders, including the shareholders, banks and bondholders. The Board is satisfied that the Company and its subsidiaries have signed a restructuring agrement with its creditors which include a comprehensive financial restructuring and address significant amounts of overdue debt that are not refinanceable. The agreed restructuing is vital in order to maintain going concern and create a stable and more efficient financial platform for the Group going forward.
Failing a completion of the agreed restructuring solution, the standstill arrangement with creditors will cease and the majority of the debt will fall due. The Board considers it impossible to obtain alternative refinancing of the debt.
The 3rd quarter report is prepared on the assumption of going concern and the assumption is based on the restructuring agreement signed with the majority of the creditors in the Group. The restructuring requires the approval by the Company's existing shareholders and the bondholders in DOF Subsea in order to become effective. The agreed final deadline for the implementation is 30th of November 2022, and in the event that the restructuring is not approved the Company will file for a reconstruction, or a bankruptcy, according to the agreement signed with the Group's creditors, published on the 13th of October 2022. Therefore, the Board and management strongly believe that the shareholders will obtain the best recovery by supporting the restructuring in an Extraordinary General Meeting on the 11th of November 2022.
Mons S. Aase, CEO +47 91661012, [email protected] Hilde Drønen, CFO +47 91661009, [email protected]
DOF ASA 5392 Storebø www.dof.com
3rd Quarter 2022
| (MNOK) | Note | Q3 2022 | Q3 2021 | Acc Q3 2022 | Acc Q3 2021 | 2021 |
|---|---|---|---|---|---|---|
| Operating revenue | 3 | 2 466 | 1 738 | 6 477 | 4 692 | 6 356 |
| Operating expenses | 6 | -1 771 | -1 169 | -4 763 | -3 452 | -4 652 |
| Share of net profit from joint ventures and associates | 7 | 150 | 81 | 299 | 150 | 265 |
| Net gain (loss) on sale of tangible assets | 18 | 44 | 70 | 104 | 109 | |
| Operating profit before depreciation and impairment - EBITDA | 864 | 695 | 2 083 | 1 494 | 2 078 | |
| Depreciation | 5 | -264 | -248 | -804 | -739 | -1 030 |
| Impairment | 5 | - | -42 | -93 | -293 | -412 |
| Operating profit - EBIT | 600 | 405 | 1 186 | 462 | 636 | |
| Financial income | 31 | 284 | 92 | 314 | 403 | |
| Financial costs | -365 | -270 | -1 045 | -727 | -1 076 | |
| Net realised currency gain (loss) | 133 | -102 | 171 | -164 | -268 | |
| Net unrealised currency gain (loss) | -878 | -492 | -1 302 | -243 | -311 | |
| Net changes in unrealised gain (loss) on derivatives | - | 13 | 9 | 33 | 40 | |
| Net financial costs | -1 079 | -568 | -2 076 | -787 | -1 212 | |
| Profit (loss) before taxes | -480 | -163 | -889 | -325 | -576 | |
| Taxes income (cost) | -39 | 35 | -119 | -24 | -54 | |
| Profit (loss) for the period | -519 | -128 | -1 008 | -349 | -630 | |
| Profit attributable to Non-controlling interest |
-21 | -10 | -49 | -17 | -23 | |
| Controlling interest | -498 | -118 | -959 | -332 | -607 | |
| Earnings per share (NOK) | -1.57 | -0.37 | -3.03 | -1.05 | -1.92 | |
| Diluted earnings per share (NOK) | -1.57 | -0.37 | -3.03 | -1.05 | -1.92 |
| (MNOK) | Note | Q3 2022 | Q3 2021 | Acc Q3 2022 | Acc Q3 2021 | 2021 |
|---|---|---|---|---|---|---|
| Profit (loss) for the period | -519 | -128 | -1 008 | -349 | -630 | |
| Items that will be subsequently reclassified to profit or loss | ||||||
| Currency translation differences | -180 | 81 | -579 | 10 | 40 | |
| Cash flow hedge | 2 | 13 | -3 | 39 | 48 | |
| Share of other comprehensive income of joint ventures | 7 | 316 | 69 | 704 | 92 | 115 |
| Items that not will be reclassified to profit or loss | ||||||
| Defined benefit plan actuarial gain (loss) | - | - | - | - | - | |
| Other comprehensive income/loss net of tax | 137 | 163 | 122 | 141 | 202 | |
| Total comprehensive income/loss | -382 | 35 | -886 | -208 | -428 | |
| Total comprehensive income/loss net attributable to | ||||||
| Non-controlling interest | -21 | -10 | -49 | -17 | -23 | |
| Controlling interest | -361 | 45 | -837 | -191 | -405 |
| (MNOK) | Note | 30.09.2022 | 30.09.2021 | 31.12.2021 |
|---|---|---|---|---|
| ASSETS | ||||
| Tangible assets | 5 | 12 398 | 12 458 | 12 199 |
| Deferred tax assets | 12 | 10 | 11 | |
| Investment in joint ventures and associated companies | 7 | 3 740 | 2 593 | 2 730 |
| Other non-current assets | 6 | 184 | 166 | 134 |
| Total non-current assets | 16 333 | 15 226 | 15 074 | |
| Trade receivables | 2 278 | 1 547 | 1 455 | |
| Other current receivables | 557 | 751 | 625 | |
| Current receivables | 2 835 | 2 299 | 2 080 | |
| Restricted deposits | 203 | 155 | 172 | |
| Unrestricted cash and cash equivalents | 1 998 | 1 444 | 1 625 | |
| Cash and cash equivalents | 8 | 2 201 | 1 598 | 1 797 |
| Current assets | 5 036 | 3 897 | 3 877 | |
| Total Assets | 21 369 | 19 123 | 18 951 | |
| EQUITY AND LIABILITIES | ||||
| Paid in equity | 316 | 316 | 316 | |
| Other equity | -2 585 | -1 520 | -1 733 | |
| Non-controlling interests | 57 | 97 | 91 | |
| Total equity | -2 212 | -1 106 | -1 326 | |
| Bond loan | 9 | - | - | - |
| Debt to credit institutions | 9 | - | - | - |
| Lease liabilities | 9 | 266 | 232 | 217 |
| Other non-current liabilities | 39 | 33 | 38 | |
| Non-current liabilities | 304 | 264 | 255 | |
| Current portion of debt | 9 | 21 545 | 18 695 | 18 692 |
| Trade payable | 1 192 | 781 | 895 | |
| Other current liabilities | 541 | 489 | 434 | |
| Current liabilities | 23 277 | 19 965 | 20 021 | |
| Total liabilities | 23 581 | 20 229 | 20 276 | |
| Total equity and liabilities | 21 369 | 19 123 | 18 951 |
| (MNOK) | Q3 2022 | Q3 2021 | Acc Q3 2022 | Acc Q3 2021 | 2021 |
|---|---|---|---|---|---|
| Operating result | 600 | 405 | 1 186 | 462 | 636 |
| Depreciation and impairment | 264 | 290 | 897 | 1 032 | 1 442 |
| Gain (loss) on disposal of tangible assets | -18 | -44 | -70 | -104 | -109 |
| Share of net income from associates and joint ventures | -150 | -81 | -299 | -150 | -265 |
| Changes in trade receivable | -126 | -17 | -823 | -544 | -467 |
| Changes in trade payable | -33 | -47 | 296 | 105 | 198 |
| Changes in other working capital | 23 | 17 | 14 | 45 | 42 |
| Exchange rate effects on operating activities | 48 | -15 | 160 | 27 | 20 |
| Cash from operating activities | 607 | 506 | 1 362 | 873 | 1 496 |
| Interest received | 7 | 2 | 35 | 26 | 40 |
| Interest and other finance costs paid | -64 | -64 | -247 | -192 | -280 |
| Taxes paid | -18 | -12 | -57 | -46 | -62 |
| Net cash from operating activities | 532 | 432 | 1 092 | 662 | 1 194 |
| Payments received for sale of tangible assets | 26 | - | 135 | 173 | 172 |
| Purchase of tangible assets | -133 | -135 | -385 | -394 | -612 |
| Purchase of contract costs | -2 | -21 | -48 | -136 | -135 |
| Payment of acquisition, net of cash | - | 26 | - | 26 | 26 |
| Purchase of shares | - | - | -6 | 1 | 1 |
| Net cash from non-current receivables | 75 | 14 | 306 | 149 | 267 |
| Net cash from investing activities | -35 | -115 | 1 | -181 | -280 |
| Proceeds from borrowings | - | 2 | - | 5 | 7 |
| Repayment of borrowings | -166 | -319 | -845 | -777 | -1 010 |
| Net cash from financing activities | -166 | -317 | -845 | -771 | -1 003 |
| Net changes in cash and cash equivalents | 331 | 1 | 248 | -290 | -88 |
| Cash and cash equivalents at the start of the period | 1 882 | 1 617 | 1 797 | 1 880 | 1 880 |
| Exchange gain/loss on cash and cash equivalents | -13 | -19 | 156 | 8 | 5 |
| Cash and cash equivalents at the end of the period | 2 200 | 1 598 | 2 200 | 1 598 | 1 797 |
The Group has standstill agreements with majority of the lenders and no interest and installments have been paid during standstill period to these lenders.
Restricted cash amounts to NOK 203 million (NOK 155 million) and is included in the cash. Changes in restricted cash is reflected in the cash flow.
Restricted cash consist of cash only available for specific purposes. A portion of this cash serves as security for outstanding debt following enforcements of account pledges. Some lenders have exercised their right to set off such cash balances toward the outstanding loans. The Group has therefore chosen to present restricted cash serving as security for loans, net of debt to credit institutions. Year to date restricted cash of NOK 305 million (NOK 274 million) has been presented net of debt to credit institutions and are included in the repayment of borrowings.
For further information, please see note 8 "Cash and cash equivalents".
| Other equity | ||||||||
|---|---|---|---|---|---|---|---|---|
| Other | Other eq | - Currency | Other equity | Non | ||||
| Paid-in | contributed | uity - Retained | translation | - Cash flow | Total other | controlling | ||
| (MNOK) | capital | capital | earnings | differences | hedge | equity | interest | Total equity |
| Balance at 01.01.2022 | 316 | - | -2 436 | 793 | -91 | -1 734 | 91 | -1 326 |
| Result (loss) for the period | -959 | -959 | -49 | -1 008 | ||||
| 704 | -579 | -3 | 122 | - | 122 | |||
| Other comprehensive income/loss | ||||||||
| Total comprehensive income for the period | - | - | -255 | -579 | -3 | -837 | -49 | -886 |
| Changes ownership non-controlling interest | -14 | -14 | 14 | - | ||||
| Total transactions with the owners | - | - | -14 | - | - | -14 | 14 | - |
| - | ||||||||
| Balance at 30.09.2022 | 316 | - | -2 706 | 215 | -94 | -2 585 | 57 | -2 212 |
| Balance at 01.01.2021 | 309 | 75 | -2 012 | 754 | -139 | -1 322 | 114 | -898 |
| Result (loss) for the period | -332 | -332 | -17 | -349 | ||||
| Other comprehensive income/loss | 90 | 10 | 41 | 141 | - | 141 | ||
| Total comprehensive income for the period | - | - | -242 | 10 | 41 | -191 | -17 | -208 |
| Converted bond loan | 7 | -75 | 67 | -7 | - | |||
| Changes in non-controlling interest | - | - | ||||||
| Total transactions with the owners | 7 | -75 | 67 | - | - | -7 | - | - |
| Balance at 30.09.2021 | 316 | - | -2 186 | 764 | -98 | -1 520 | 97 | -1 106 |
| Q3 2022 | Q3 2021 | Acc Q3 2022 | Acc Q3 2021 | 2021 | ||
|---|---|---|---|---|---|---|
| EBITDA margin ex net gain on sale of vessel | 1 | 34% | 37% | 31% | 30% | 31% |
| EBITDA margin | 2 | 35% | 40% | 32% | 32% | 33% |
| EBIT margin | 3 | 24% | 23% | 18% | 10% | 10% |
| Profit per share | 4 | -1.57 | -0.37 | -3.03 | -1.05 | -1.92 |
| Return on net capital | 5 | -46% | -32% | -48% | ||
| Equity ratio | 6 | -10% | -6% | -7% | ||
| Net interest bearing debt | 19 404 | 16 631 | 16 675 | |||
| Net interest bearing debt excl. effect of IFRS 16 | 19 158 | 16 462 | 16 499 | |||
| Number of shares | 316 456 167 | 316 456 167 | 316 456 167 | |||
| Potential average number of shares | 316 456 167 | 316 456 167 | 316 456 167 | |||
| Potential number of shares | 316 456 167 | 316 456 167 | 316 456 167 |
1) Operating profit before depreciation excluded net gain on sale of vessel in percent of operating income.
2) Operating profit before depreciation in percent of operating income.
3) Operating profit in percent of operating income.
4) Result /potential average no. of shares. 5) Result incl non-controlling interest/total equity.
6) Total equity/total balance.
Note 1 General
DOF ASA (the "Company") and its subsidiaries (together, the "Group") own and operate a fleet of PSV, AHTS, subsea vessels and service companies offering services to the subsea market worldwide.
The Company is a public limited company, which is listed on the Oslo Stock Exchange and incorporated and domiciled in Norway. The head office is located at Storebø in the municipality of Austevoll, Norway.
These condensed interim financial statements were approved for issue on the 26th of October 2022. These condensed interim financial statements have not been audited.
This Financial Report has been prepared in accordance with IAS 34, 'Interim financial reporting'. The Financial Report does not include all the information and disclosure required in the annual financial statements, and should be read in conjunction with the Group's Annual Report for 2021.
In accordance with IAS 1.25, the Board of Directors confirms that the financial statements have been prepared under the assumption of going concern. The assumption is based on the restructuring agreement and standstill arrangement signed with the majority of the creditors in the Group. The restructuring requires the approval by the Company's existing shareholders and the bondholders in DOF Subsea in order to become effective. The agreed final deadline for the implementation is 30 November 2022, and in the event that the restructuring is not approved the Company will file for reconstruction, or a bankrupt, according to the agreement signed with the Group's creditors, published on 13th of October 2022. Hence, the Board would like to emphasize that there is still material uncertainty related to the going concern assumption.
Without implementation of a restructuring agreement, the Group can no longer present financial statements on the assumption of going concern. If the Group can not be treated as going concern, the valuation of the Groups assets will be further revised and will result in significantly impairment of the Group's assets.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31st of December 2021, with the exception of changes in estimates that are required in determining the provision for income taxes.
The reporting below is presented according to internal management reporting, based on the proportional consolidation method of accounting of jointly controlled companies. The bridge between the management reporting and the figures reported in the financial statement is presented below.
| RESULT | 3rd Quarter 2022 | 3rd Quarter 2021 | ||||
|---|---|---|---|---|---|---|
| Management | Reconciliation to equity |
Financial | Management | Reconciliation to equity |
Financial | |
| (MNOK) | reporting | method | reporting | reporting | method | reporting |
| Operating revenue | 2 862 | -395 | 2 466 | 2 052 | -314 | 1 738 |
| Operating expenses | -1 850 | 79 | -1 771 | -1 228 | 59 | -1 169 |
| Net profit from associated and joint ventures | - | 150 | 150 | -3 | 84 | 81 |
| Net gain on sale of tangible assets | 18 | - | 18 | 44 | - | 44 |
| Operating profit before depreciation and impairment - EBITDA | 1 030 | -166 | 864 | 865 | -170 | 695 |
| Depreciation | -352 | 88 | -264 | -335 | 87 | -248 |
| Impairment | - | - | - | -42 | - | -42 |
| Operating profit - EBIT | 678 | -78 | 600 | 488 | -83 | 405 |
| Financial income | 28 | 3 | 31 | 279 | 5 | 284 |
| Financial costs | -416 | 50 | -365 | -309 | 39 | -270 |
| Net realised gain/loss on currencies | 131 | 2 | 133 | -105 | 3 | -102 |
| Net unrealised gain/loss on currencies | -869 | -9 | -878 | -548 | 56 | -492 |
| Net changes in fair value of financial instruments | - | - | - | 13 | - | 13 |
| Net financial costs | -1 126 | 47 | -1 079 | -671 | 102 | -568 |
| Profit (loss) before taxes | -448 | -32 | -480 | -182 | 19 | -163 |
| Taxes | -71 | 32 | -39 | 54 | -19 | 35 |
| Profit (loss) | -519 | - | -519 | -128 | - | -128 |
| RESULT | YTD 3rd Quarter 2022 | YTD 3rd Quarter 2021 | ||||
|---|---|---|---|---|---|---|
| (MNOK) | Management reporting |
Reconciliation to equity method |
Financial reporting |
Management reporting |
Reconciliation to equity method |
Financial reporting |
| Operating revenue | 7 545 | -1 068 | 6 477 | 5 568 | -877 | 4 692 |
| Operating expenses | -4 971 | 208 | -4 763 | -3 622 | 170 | -3 452 |
| Net profit from associated and joint ventures | - | 299 | 299 | -14 | 164 | 150 |
| Net gain on sale of tangible assets | 70 | - | 70 | 104 | - | 104 |
| Operating profit before depreciation and impairment - EBITDA | 2 645 | -561 | 2 083 | 2 037 | -543 | 1 494 |
| Depreciation | -1 051 | 247 | -804 | -965 | 225 | -739 |
| Impairment | -93 | - | -93 | -391 | 98 | -293 |
| Operating profit - EBIT | 1 500 | -314 | 1 186 | 681 | -220 | 462 |
| Financial income | 83 | 9 | 92 | 291 | 23 | 314 |
| Financial costs | -1 189 | 143 | -1 045 | -844 | 117 | -727 |
| Net realised gain/loss on currencies | 174 | -3 | 171 | -168 | 3 | -164 |
| Net unrealised gain/loss on currencies | -1 275 | -27 | -1 302 | -278 | 36 | -243 |
| Net changes in fair value of financial instruments | 9 | - | 9 | 33 | - | 33 |
| Net financial costs | -2 198 | 123 | -2 076 | -965 | 179 | -787 |
| Profit (loss) before taxes | -698 | -191 | -889 | -284 | -41 | -325 |
| Taxes | -310 | 191 | -119 | -65 | 41 | -24 |
| Profit (loss) | -1 008 | - | -1 008 | -349 | - | -349 |
| BALANCE | 30.09.2022 | 30.09.2021 | |||||
|---|---|---|---|---|---|---|---|
| Reconciliation | Reconciliation | ||||||
| Management | to equity | Financial | Management | to equity | Financial | ||
| (MNOK) | reporting | method | reporting | reporting | method | reporting | |
| ASSETS | |||||||
| Tangible assets | 19 566 | -7 168 | 12 398 | 18 312 | -5 855 | 12 458 | |
| Deferred taxes | 343 | -331 | 12 | 357 | -347 | 10 | |
| Investment in joint ventures and associated companies | 12 | 3 728 | 3 740 | 7 | 2 585 | 2 593 | |
| Other non-current assets | 278 | -94 | 184 | 166 | - | 166 | |
| Total non-current assets | 20 198 | -3 865 | 16 333 | 18 842 | -3 616 | 15 226 | |
| Receivables | 3 139 | -304 | 2 835 | 2 256 | 43 | 2 299 | |
| Cash and cash equivalents | 2 648 | -447 | 2 201 | 2 202 | -604 | 1 598 | |
| Total current assets included asset held for sale | 5 787 | -751 | 5 036 | 4 458 | -561 | 3 897 | |
| Total assets | 25 985 | -4 616 | 21 369 | 23 300 | -4 177 | 19 123 | |
| EQUITY AND LIABILITIES | |||||||
| Equity | -2 212 | - | -2 212 | -1 106 | - | -1 106 | |
| Non-current liabilities | 4 090 | -3 785 | 304 | 3 700 | -3 435 | 264 | |
| Current liabilities | 24 107 | -831 | 23 277 | 20 707 | -742 | 19 965 | |
| Total liabilities | 28 197 | -4 616 | 23 581 | 24 406 | -4 177 | 20 229 | |
| Total equity and liabilities | 25 985 | -4 616 | 21 369 | 23 300 | -4 177 | 19 123 | |
| Net interest bearing liabilities excluded effect of IFRS 16 | 22 913 | -3 755 | 19 158 | 19 678 | -3 215 | 16 462 |
| Q3 2022 | YTD Q3 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| 3rd Quarter 2022 | PSV | AHTS | Subsea | Total | PSV | AHTS | Subsea | Total |
| Operating revenue | 131 | 350 | 2 381 | 2 862 | 361 | 1 025 | 6 160 | 7 545 |
| Net gain on sale of tangible assets | - | - | 18 | 18 | 43 | - | 27 | 70 |
| Operating result before depreciation and impairment - EBITDA | 38 | 139 | 853 | 1 030 | 107 | 371 | 2 166 | 2 645 |
| Depreciation | 24 | 67 | 261 | 352 | 75 | 194 | 782 | 1 051 |
| Impairment | - | - | - | - | - | 93 | - | 93 |
| Operation result - EBIT | 14 | 72 | 592 | 678 | 33 | 84 | 1 383 | 1 500 |
| Q3 2021 | YTD Q3 2021 *) | |||||||
| 3rd Quarter 2021 | PSV | AHTS | Subsea | Total | PSV | AHTS | Subsea | Total |
| Operating revenue | 138 | 276 | 1 638 | 2 052 | 349 | 804 | 4 415 | 5 568 |
| Net gain on sale of tangible assets | - | - | 44 | 44 | 31 | - | 73 | 104 |
| Operating result before depreciation and impairment - EBITDA | 41 | 123 | 701 | 865 | 93 | 365 | 1 579 | 2 037 |
| Depreciation | 28 | 54 | 254 | 335 | 81 | 154 | 729 | 965 |
| Impairment | 2 | 24 | 15 | 42 | 39 | 59 | 293 | 391 |
| Operation result - EBIT | 11 | 45 | 432 | 488 | -27 | 152 | 556 | 681 |
*) Figures for 2021 includes reallocation of revenue between the segments.
The Group's revenue from contracts with customers has been disaggregated and presented in the table below;
| Operating revenue | Q3 2022 | Q3 2021 | Acc Q3 2022 | Acc Q3 2021 | 2021 |
|---|---|---|---|---|---|
| Lump sum contracts | 120 | 45 | 256 | 99 | 117 |
| Day rate contracts | 2 346 | 1 693 | 6 221 | 4 593 | 6 239 |
| Total | 2 466 | 1 738 | 6 477 | 4 692 | 6 356 |
| 2022 | Vessel and periodical maintenance |
ROV | Operating equipment |
Asset "Right-of-use" |
Total |
|---|---|---|---|---|---|
| Book value at 01.01.2022 | 11 256 | 511 | 214 | 218 | 12 199 |
| Addition | 321 | 29 | 42 | 11 | 403 |
| Reclassification | -1 | - | -1 | -2 | |
| Disposal | -116 | -8 | -1 | -125 | |
| Depreciation | -632 | -86 | -45 | -39 | -802 |
| Impairment loss | -93 | -93 | |||
| Currency translation differences | 787 | 5 | 12 | 14 | 818 |
| Book value at 30.09.2022 | 11 521 | 459 | 215 | 203 | 12 398 |
| 2021 | Vessel and periodical maintenance |
ROV | Operating equipment |
Asset "Right-of-use" |
Total |
| Book value at 01.01.2021 | 11 821 | 533 | 226 | 264 | 12 844 |
| Addition | 685 | 90 | 28 | -2 | 801 |
| Disposal | -138 | -138 | |||
| Depreciation | -568 | -90 | -44 | -37 | -739 |
| Impairment loss | -273 | -273 | |||
| Currency translation differences | -39 | - | 1 | 1 | -36 |
| Book value at 30.09.2021 | 11 487 | 533 | 211 | 226 | 12 458 |
The vessels Skandi Rona, Skandi Sotra, Skandi Foula are sold and delivered to new owner in 2022. Geosea was derecognised from tangible assets and reclassified as financial lease in Q1 2022. The vessel is delivered to new owner in Q3 2022. In addition some subsea equipments are sold in Q3 2022.
Total gain on sale and derecognition of tangible assets amounts to NOK 70 million.
Net booked value of right-of-use assets at the 30th of September 2022 consists of property with NOK 203 million (NOK 221 million) and operating equipment with NOK 1 million (NOK 5 million).
Impairment tests performed for Q3 2022 have resulted in no impairment of vessels this quarter. Accumulated impairment year to date Q3 2022 amounts to NOK 93 million. No impairment has been done in joint ventures in 2022.
The fair market values have increased for the majority of the fleet, and the markets have improved in 2022. However, the Group's current financial position is not sustainable and is dependent on a comprehensive financial restructuring as agreed in the Restructuring Agreement (RA) signed in June. The RA has to be approved by the Company's shareholders and the Group's bondholders and in the event that the restructuring is not approved, the valuation of the Group's assets will be further revised which again will result in increased impairments of the Group assets.
The valuation of the vessels are sensitive for changes in WACC, earnings and USD/NOK rate. The Group has applied a nominal WACC after tax in the range of 7.9-10.6% (changed from 8.4%-9.3%). Negative changes in WACC with 50 basis points will result in an additional impairment of the vessels with approximately NOK 15 million. Negative effect on net future cash flows with 20% will result in an additional impairment of the vessels with approximately NOK 0.6 billion. The impairment tests are USD sensitive and a drop in USD/NOK of with 20% will result in an additional impairment of approximately NOK 0.3 billion given no change in other assumptions. In addition a negative effect on net future cash flows with 20% will result in an impairment of the vessels in joint ventures with NOK 0.9 billion.
| 30.09.2022 | 30.09.2021 | 31.12.2021 | |
|---|---|---|---|
| Net booked value 01.01. | 126 | 93 | 93 |
| Additions | 48 | 121 | 134 |
| Reclassification to tangible assets | -5 | -4 | |
| Amortisation | -82 | -37 | -97 |
| Currency translation differences | 19 | 1 | -1 |
| Net booked value closing balance | 111 | 173 | 126 |
The Company's investment in associates and joint ventures as of 30.09.2022;
| Joint ventures | Ownership | ||
|---|---|---|---|
| DOFCON Brasil AS with subsidiaries | 50% | ||
| KDS JV AS | 50% | ||
| Associated companies | |||
| Master & Commander | 20% | ||
| Skandi Aukra AS | 34% | ||
| Semar AS | 42% | ||
| Effect of application of IFRS 11 on investments in joint ventures; | 30.09.2022 | 30.09.2021 | 31.12.2021 |
| Opening balance 01.01 | 2 730 | 2 336 | 2 336 |
| Addition | 6 | - | - |
| Profit (loss) | 299 | 150 | 265 |
| Profit (loss) through OCI | 704 | 92 | 115 |
| Dividend | -1 | ||
| Negative value on investments reallocated to receivable | 1 | 14 | 15 |
| Closing balance | 3 740 | 2 593 | 2 730 |
| 30.09.2022 | 30.09.2021 | 31.12.2021 | |
|---|---|---|---|
| Restricted cash | 203 | 155 | 172 |
| Unrestricted cash and cash equivalent | 1 998 | 1 444 | 1 625 |
| Total cash and cash equivalent | 2 201 | 1 598 | 1 797 |
Restricted cash consist of cash only available for specific purposes. A portion of this cash serves as security for outstanding debt following enforcements of account pledges. The balance of these accounts sums up to NOK 922 million at 30th of September 2022. Some lenders have exercised their right to set off such cash balances toward the outstanding loans. The Group has therefore chosen to present restricted cash serving as security for loans, net of debt to credit institutions.
The Group has cash pooling arrangements whereby cash surpluses and overdrafts residing in the Group companies bank accounts are pooled together to create a net surplus. The liquidity is made available through the cash pooling for the Companies in the Group to meet their obligations. The bank accounts in the cash pool consists of accounts in various currencies that on a currency basis can be in surplus or overdraft. Only the master accounts, (nominated in NOK) in each of the cash pools hierarchies are classified as bank deposits and included in the table above. The total cash pool can never be in net overdraft. No overdraft facilities are connected to the cash pools.
Surplus cash transferred to the Group's cash pool will be available at all times to meet the Group's financial obligations at any time. Some subsidiaries are not part of the cash pool structure. Surplus cash in these companies will be available for the rest of the Group through loans or dividends. Total cash in these subsidiaries are NOK 501 million and are included in unrestricted cash and cash equivalents.
The Group has signed a Restructuring Agreement (RA) which include the Company's debt and the Group subsidiaries debt (excluding the debt in the DOFCON JV). The RA has been entered into with all the secured lenders and the adhoc group of bondholders in DOF Subsea's three bond issues controlling approximately 40% of the total outstanding amount of the bonds. BNDES (Brazilian Development Bank) has further given their consent to the RA.
Highlights in the RA include the following:
With the exception of certain guarantee-liabilities, and ring-fenced structures, the surviving debt of the Group shall be reinstated as (i) new facilities with maturity on 9th of January 2026 and generally extended amortisation schedule and reduced interest costs and (ii) new bonds with no cash debt service with maturity on 17th of December 2027.
The DOFCON JV is not part of the standstill agreements and serves its debt according to the terms in the relevant loan facilities. Financial covenants related to the Group's 50% guarantee of the DOFCON loan facilities have been waived.
The RA remains to be approved by the bondholders in DOF Subsea AS in a bondholder meeting on 7th of November and by the shareholders in the Company in an extraordinary general meeting on 11th of November.
The parties to the RA have agreed on how to implement the Restructuring should the shareholders not approve the Restructuring in the extraordinary general meeting where two main steps are as follows; Step 1: implemented by a reconstruction with the existing shareholders to retain 1% post the restructuring, Step 2: if step 1 cannot be implemented, the implementation will be done via bankrupty with existing shareholders retaining no equity interest.
The financial covenants have been waived in standstill agreements for DOF ASA and DOF Subsea AS (excl. the DOFCON JV).
| 30.09.2022 | 30.09.2021 | 31.12.2021 | |
|---|---|---|---|
| Non-current interest bearing liabilities | |||
| Bond loan | - | - | - |
| Debt to credit institutions | - | - | - |
| Lease liabilities (IFRS 16) *) | 266 | 232 | 217 |
| Total non-current interest bearing liabilities | 266 | 232 | 217 |
| Current interest bearing liabilities | |||
| Bond loan | 3 739 | 2 593 | 2 979 |
| Debt to credit institutions | 17 620 | 15 467 | 15 309 |
| Lease liabilities (IFRS 16) *) | 83 | 92 | 87 |
| Overdraft facilities | - | 8 | |
| Total current interest bearing liabilities | 21 442 | 18 153 | 18 383 |
| Total interest bearing liabilities | 21 708 | 18 384 | 18 601 |
| Net interest bearing liabilities | |||
| Other interest bearing assets (sublease IFRS 16) | 103 | 155 | 129 |
| Cash and cash equivalents | 2 201 | 1 598 | 1 797 |
| Total net interest bearing liabilities | 19 404 | 16 631 | 16 675 |
| Net effect of IFRS 16 Lease | 246 | 169 | 175 |
| Total net interest bearing liabilities excluded IFRS 16 Lease liabilities | 19 158 | 16 462 | 16 499 |
*) Lease liabilities are related to right-of-use assets and sub-leases.
Current interest bearing debt in the statement of balance sheet included accrued interest expenses of NOK 102 million. Accrued interest expenses are excluded in the figures above. Accrued interest to credit institutions and bondholders is capitalised on the loans on an ongoing basis. A significant amount was capitalised the first quarter 2022 due to convertion of debt from NOK and CAD to USD.
Changes in total liabilites over a period consists of both cash effects (proceeds and repayments) and non-cash effects (amortisations and currency translations effects). In the first quarter the Group has extended the leasing agreement for Skandi Darwin until mid 2025 resulting in lease liabilities by NOK 90 million included in proceeds lease debt below. The following are the changes in the Group's borrowings:
| Non-cash changes | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance 31.12.2021 |
Cash flows* | Proceeds lease debt |
Debt remission |
Proceeds standstill agreement |
Amortised loan expenses |
Currency and other effects |
Balance 30.09.2022 |
||
| Interest bearing liabilities | |||||||||
| Bond loan | 2 979 | 379 | 4 | 376 | 3 739 | ||||
| Debt to credit institutions | 15 309 | -766 | 5 | -4 | 599 | 6 | 2 471 | 17 620 | |
| Lease liabilities | 304 | -71 | 99 | 17 | 349 | ||||
| Overdraft facilities | 8 | -8 | - | ||||||
| Total interest bearing liabilities | 18 601 | -845 | 104 | -4 | 978 | 10 | 2 865 | 21 708 |
*) Restricted cash of NOK 305 million has been presented net of debt to credit institutions and are included in the repayments of debt in the cash flow statement. See note 8 'Cash and cash equivalent'.
At the 30th of September 2022 the liabilites is divided on currencies;
| Currency | Balance NOK |
Ratio % | |
|---|---|---|---|
| NOK | 6 309 | 29% | |
| USD | 1 389 | 15 081 | 69% |
| Other currencies | 318 | 1% | |
| Total | 21 708 | 100% |
Transactions with related parties are governed by market terms and conditions in accordance with the "arm's length principle". The transactions are described in the Annual report for 2021.
There are no major changes in the type of transactions between related parties.
Note 11 Events after balance date
Equinor Energy AS has exercised its option to extend the firm period of the contract for Skandi Flora by one year. The extension is applicable from 4th of October.
DOF Subsea awarded a 3-year contract for two vessels with Esso Exploration & Production Guyana Limited, performing IMR, well intervention support, and light subsea construction in the Stabroek Block offshore Guyana. Two Multipurpose Support Construction Vessels with 250-ton AHC crane and 2 work class ROV systems will be deployed in Guyana for 3-year terms, plus 2 years options. The estimated firm backlog for the group is approximately NOK 2.7 billion.
The Group was awarded multiple contracts including extension of a contract in Brazil and new contracts in West-Africa and in the North Sea. Petrobras awarded an extension of the Skandi Amazonas contract with Norskan Offshore Ltda until March 2023. DOF Subsea has been awarded a contract to support a FPU for a major operator in West-Africa. Skandi Captain has secured a contract with a client to support drilling operations in the Dutch sector of the North Sea. The estimated firm backlog for these contracts is approximately NOK 260 million.
The parties in the Restructuring Agreement, as set out in the announcement on 22nd of June 2022, have entered into an addendum to the Restructuring Agreement (the "Addendum") detailing the steps that will be taken by the creditors, subject to satisfaction or waiver of certain customary conditions, to implement the Restructuring in such event.
In the event that the extraordinary general meeting of DOF rejects the resolutions required to implement the Restructuring, DOF shall subject to the terms of the Addendum, procure that reconstruction proceedings are opened under the Norwegian Reconstruction Act of 7th of May 2020 and propose a reconstruction with the following key elements:
(i) a portion of DOF's direct financial indebtedness will be converted into equity; and
(ii) no other liabilities of DOF or the Group will be affected by the reconstruction.
All other elements of the Restructuring will be implemented following completion of the reconstruction.
Implementation of the reconstruction proposal will require that an additional extraordinary general meeting of DOF approves the proposal with at least 50% of the shares represented at the general meeting. If the Restructuring is implemented by way of a reconstruction, the existing shares in DOF will represent 1% of the fully diluted shares in DOF post completion, unless otherwise agreed among the Group's creditors, compared to 4% of the fully diluted shares in DOF if the Restructuring Agreement is adopted as proposed in the first extraordinary general meeting.
If the reconstruction proposal cannot be implemented, either because the required majority at the second extraordinary general meeting is not obtained or for other reasons, bankruptcy proceedings will be opened in DOF. Pursuant to the Addendum, the creditors of the Group have agreed to establish a new company ("Newco") that will make an offer to acquire the entire business of the Group from the bankruptcy estate through an acquisition, directly or indirectly, of its subsidiaries against a subordination of their claims against DOF. No cash consideration will be offered. If such offer is successful, Newco will become the new parent company in the Group, and an application will be made for the listing of the shares of Newco on Oslo Børs or Euronext Expand Oslo. If the Restructuring is implemented following a bankruptcy in DOF, the existing shareholders in DOF will not retain any equity interest in the restructured group.
The board of directors and management of DOF firmly believe that it is in the best interest of DOF's shareholders that the Restructuring is implemented on a consensual basis and that the shareholders will obtain the best recovery by supporting the Restructuring at the extraordinary general meeting of DOF. However, if a consensual solution is not possible, the board of directors must have regard to the interest of its creditors as the main economic stakeholders of the Group, as well as seeking to secure the continued operations of the business of the Group to the benefit of its customers, employees and other stakeholders. To this end, the board of directors is of the opinion that the implementation of the Restructuring through the alternative implementation steps agreed in the Addendum will be the best option available to DOF and the Group if the shareholders do not support the Restructuring at the extraordinary general meeting.
All scenarios above, including in case of a formal bankruptcy in the parent company DOF ASA to effect the Restructuring, are structured to avoid any interruption to the ongoing operations of the Group and to avoid losses for the Group's customers, suppliers and other trade creditors. Consequently, no other creditors than the financial creditors are envisaged to be affected by such alternative implementations of the Restructuring Agreement.
| Name | No. shares | Shareholding % |
|---|---|---|
| MØGSTER OFFSHORE AS | 100 007 313 | 31.60% |
| BRØNMO, BJARTE | 15 399 058 | 4.87% |
| BNP PARIBAS SECURITIES SERVICES | 9 570 169 | 3.02% |
| SANS INVEST AS | 7 717 464 | 2.44% |
| HERNESS, BJØRN | 3 517 616 | 1.11% |
| DAHL, TORE | 3 241 500 | 1.02% |
| EBB HOLDING AS | 2 901 097 | 0.92% |
| NORDNET BANK AB | 2 793 678 | 0.88% |
| EKREN, GEIR | 2 721 514 | 0.86% |
| CHAMANSKI, ALEXANDRE | 2 615 000 | 0.83% |
| HOLDEN, JIM ØYSTEIN | 2 533 235 | 0.80% |
| NORDNET LIVSFORSIKRING AS | 2 372 117 | 0.75% |
| AVANZA BANK AB | 2 271 390 | 0.72% |
| LUNDBY, IRENE | 2 065 439 | 0.65% |
| DP HOLDING AS | 2 033 517 | 0.64% |
| WORKINN, HANS KRISTIAN | 2 032 290 | 0.64% |
| MOCO HOLDING AS | 1 984 419 | 0.63% |
| LAWO INVEST AS | 1 857 377 | 0.59% |
| SOTRA KRAN AS | 1 404 750 | 0.44% |
| HORVIK, PER OLAV | 1 380 000 | 0.44% |
| Total | 170 418 943 | 53.85% |
| Total other shareholders | 146 037 224 | 46.15% |
| Total no of shares | 316 456 167 | 100.00% |
DOF ASA financial information is prepared in accordance with international financial reporting standards (IFRS). In addition DOF ASA discloses alternative performance measures as a supplement to the financial statement prepared in accordance with IFRS. Such performance measures are used to provide an enhanced insight into the operating performance, financing and future prospects of the company and are frequently used by securities analysts, investors and other interested parties.
The definitions of these measures are as follows:
Financial reporting – Financial Reporting according to IFRS.
Management reporting – Investments in joint ventures (JV) is consolidated on gross basis in the income statement and the statement of financial position.
EBITDA – Operating profit (earnings) before depreciation, impairment, amortisation, net financial costs and taxes is a key financial parameter. The term is useful for assessing the profitability of its operations, as it is based on variable costs and excludes depreciation, impairment and amortise costs related to investments. Ebitda is also important in evaluating performance relative to competitors.
Operational EBITDA – Ebitda as described above adjusted for gain on sale of tangible assets, according to management reporting.
EBIT – Operating profit (earnings) before net financial costs and taxes.
Interest bearing debt – Total of current and non-current borrowings.
Net interest bearing debt – Interest bearing debt minus current and non-current interest-bearing receivables and cash and cash equivalents. The use of the term "net debt" does not necessarily mean cash included in the calculation are available to settle debts if included in the term.
Debt ratio – Net interest bearing debt divided on total equity and debt.
Utilisation – Utilisation of vessel numbers is based on actual available days including days at yard for periodical maintenance, upgrading, transit or idle time between contracts.
Contract coverage – Number of future sold days compared with total actual available days excluded options.
Contract Backlog – Sum of undiscounted revenue related to secured contracts in the future and optional contract extensions as determined by the client. Contract coverage related to master service agreements (MSA`s) within the CSV segment, includes only confirmed purchase order.
The supplemental information below is presented according to management reporting, based on the proportionate consolidation method. Proportionate consolidation method implies full consolidation for subsidiaries, and consolidation of 50% of the comprehensive income and financial position for the joint ventures.
| (MNOK) | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 |
|---|---|---|---|---|---|
| Operating revenue | 2862 | 2510 | 2174 | 1 975 | 2 052 |
| Operating expenses | -1850 | -1693 | -1428 | -1 228 | -1 228 |
| Share of net profit from joint ventures and associates | - | - | - | - | -3 |
| Net gain (loss) on sale of tangible assets | 18 | 32 | 20 | 5 | 44 |
| Operating profit before depreciation and impairment - EBITDA | 1 030 | 848 | 767 | 753 | 865 |
| Depreciation | -352 | -346 | -353 | -369 | -335 |
| Impairment | - | - | -93 | -119 | -42 |
| Operating profit - EBIT | 678 | 501 | 321 | 264 | 488 |
| Financial income | 28 | 37 | 18 | 85 | 279 |
| Financial costs | -416 | -373 | -400 | -390 | -309 |
| Net realised gain (loss) on currencies | 131 | 92 | -49 | -106 | -105 |
| Net unrealised gain (loss) on currencies | -869 | -1 502 | 1 096 | -80 | -548 |
| Net changes in unrealised gain (loss) on derivatives | - | - | 9 | 7 | 13 |
| Net financial costs | -1 126 | -1 746 | 673 | -484 | -671 |
| Profit (loss) before taxes | -448 | -1 245 | 995 | -219 | -182 |
| Taxes | -71 | -68 | -171 | -61 | 54 |
| Profit (loss) for the period | -519 | -1 313 | 824 | -281 | -128 |
| Profit attributable to | |||||
| Non-controlling interest | 1 | -29 | 1 | -6 | -10 |
| Controlling interest | 823 | -1 284 | 823 | -274 | -118 |
| (MNOK) | 30.09.2022 | 30.06.2022 | 31.03.2022 | 31.12.2021 | 30.09.2021 |
|---|---|---|---|---|---|
| ASSETS | |||||
| Tangible assets | 19 566 | 18 967 | 18 101 | 18 052 | 18 312 |
| Deferred tax assets | 343 | 310 | 291 | 341 | 357 |
| Investment in joint ventures and associated companies | 12 | 12 | 6 | 6 | 7 |
| Other non-current assets | 278 | 260 | 233 | 133 | 166 |
| Total non-current assets | 20 198 | 19 550 | 18 632 | 18 532 | 18 842 |
| Receivables and other current asset | 3 139 | 3 127 | 2 707 | 2 190 | 2 256 |
| Cash and cash equivalents | 2 648 | 2 240 | 2 258 | 2 266 | 2 202 |
| Current assets | 5 787 | 5 367 | 4 965 | 4 456 | 4 458 |
| Total Assets | 25 985 | 24 917 | 23 597 | 22 988 | 23 300 |
| EQUITY AND LIABILITIES | |||||
| Paid in equity | 316 | 316 | 316 | 316 | 316 |
| Other equity | -2 585 | -2 223 | -1 201 | -1 733 | -1 520 |
| Non-controlling interests | 57 | 77 | 105 | 91 | 97 |
| Total equity | -2 212 | -1 830 | -780 | -1 326 | -1 106 |
| Non-current liabilities | 4 090 | 3 885 | 3 547 | 3 594 | 3 700 |
| Current liabilities | 24 107 | 22 862 | 20 829 | 20 720 | 20 707 |
| Total liabilities | 28 197 | 26 746 | 24 376 | 24 314 | 24 406 |
| Total equity and liabilities | 25 985 | 24 917 | 23 597 | 22 988 | 23 300 |
| Net interest bearing liabilities excluded effect of IFRS 16 | 22 913 | 21 758 | 19 683 | 19 754 | 19 678 |
| (MNOK) | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 |
|---|---|---|---|---|---|
| Net cash from operation activities | 762 | 671 | 301 | 676 | 670 |
| Net cash from investing activities | -98 | -280 | -41 | -257 | -187 |
| Net cash from financing activities | -287 | -582 | -306 | -352 | -410 |
| Net changes in cash and cash equivalents | 377 | -190 | -47 | 68 | 73 |
| Cash and cash equivalents at start of the period | 2 241 | 2 258 | 2 266 | 2 202 | 2 135 |
| Exchange gain/loss on cash and cash equivalents | 31 | 172 | 39 | -5 | -5 |
| Cash and cash equivalents at the end of the period | 2 648 | 2 241 | 2 258 | 2 266 | 2 202 |
| Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | |
|---|---|---|---|---|---|
| EBITDA margin excluded net gain on sale of tangible assets | 35% | 33% | 34% | 38% | 40% |
| EBITDA margin | 36% | 34% | 35% | 38% | 42% |
| EBIT margin | 24% | 20% | 15% | 13% | 24% |
| Profit per share (NOK) | 2.60 | -4.06 | 2.60 | -0.87 | -0.37 |
| Book value equity per share (NOK) | -7.17 | -6.03 | -2.79 | -4.48 | -3.80 |
| Net interest bearing debt excluded effect of IFRS 16 (NOK million) | 22 913 | 21 758 | 19 683 | 19 754 | 19 678 |
| Potential average number of shares | 316 456 167 | 316 456 167 | 316 456 167 | 316 456 167 | 316 456 167 |
Alfabygget 5392 Storebø NORWAY
Phone: +47 56 18 10 00 [email protected]
DOF Subsea AS Thormøhlensgate 53 C 5006 Bergen NORWAY
Phone: +47 55 25 22 00
Thormøhlensgate 53 C 5006 Bergen NORWAY Phone: +47 55 25 22 00
DOF Management AS Alfabygget 5392 Storebø NORWAY Phone: +47 56 18 10 00 [email protected]
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Phone: +44 1224 586 644 Fax: +44 1224 586 555 [email protected]
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5365 W. Sam Houston Parkway N Suite 400 Houston, Texas 77041 USA Phone: +1 713 896 2500 Fax: +1 713 726 5800
DOF ASA Alfabygget 5392 Storebø NORWAY
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