Prosafe SE

Earnings Release • Feb 10, 2014

Prosafe SE: Fourth quarter 2013 results

Prosafe SE: Fourth quarter 2013 results

Operating profit for the fourth quarter came to USD 67 million and net profit

amounted to USD 59.7 million. An interim dividend of NOK 1.00 per share was

resolved. The gross value of the contract backlog amounted to approximately USD

1.7bn (incl. options) at the end of the year, by far the highest level ever seen

in Prosafe's history.

Financials

(Figures in brackets refer to the corresponding period of 2013)

Full year 2013

Operating profit for 2013 amounted to USD 245.1 million (USD 222.4 million),

with utilisation of the fleet rising to 83 per cent (82 per cent). The improved

result is mainly attributable to higher day rates.

In 2013, Prosafe had over 1 million exposure hours and zero lost time injuries.

The company also showed positive development on other HSE measures.

Net financial expenses for 2013 amounted to USD 41.3 million (USD 44.4 million).

In accordance with IFRS, interest costs totalling USD 4.5 million (USD 3.7

million) have been allocated to new build and refurbishment projects, and

consequently capitalised as part of the vessel costs.

Net profit for 2013 equalled USD 199.1 million (USD 177.5 million) and diluted

earnings per share were USD 0.85 (USD 0.80).

Fourth quarter

Operating profit for the fourth quarter amounted to USD 67 million (USD 45.5

million). Utilisation of the fleet was 82 per cent (82 per cent). The rise in

operating profit is mainly due to higher day rates.

Safe Caledonia, Safe Concordia, Safe Lancia, Jasminia, Safe Hibernia, Safe

Britannia and Safe Regency were in full operation throughout the quarter.

Safe Concordia was on contract in Brazil and the average effective day rate in

the quarter was approximately USD 141 000.

Safe Caledonia continued operation for BP in the North Sea during the quarter.

Safe Scandinavia completed the contract with ConocoPhillips UK on 12 November,

and is currently undertaking a life extension refurbishment and a five-year

special period survey (SPS) at the Remontowa yard in Gdansk in Poland, before

commencing a contract with Statoil in Norway.

Regalia completed operations for Shell on 24 November. The vessel is currently

at Keppel Verolme in the Netherlands for refurbishment work and a five-year SPS.

The vessel will subsequently operate for Statoil in Norway.

Safe Bristolia was in full operation for Elf Exploration in UK until 20 December

and is scheduled to commence the next contract in April 2014.

Safe Astoria remained at the yard in Batam until 26 December, when she started

mobilising for a contract with Swiber in Indonesia. The vessel earned a

mobilisation day rate until operations commenced on 5 January 2014.

Net financial costs amounted to USD 6.8 million (USD 4.9 million). Interest

income is down due to the settlement of the seller's credit agreement entered

into in relation to the sale of Safe Esbjerg in 2012.

Net profit equalled USD 59.7 million (USD 42.3 million), corresponding to

diluted earnings per share of USD 0.25 (USD 0.19).

Total assets at 31 December amounted to USD 1 618 million (USD 1 487.2 million).

Net interest-bearing debt equalled USD 666.2 million (USD 706.8 million), while

the book equity ratio increased to 45.7 per cent (34.6 per cent).

New builds

In November 2013, Prosafe completed firm turnkey contracts with COSCO (Qidong)

Offshore Co., Ltd. for the engineering, procurement and construction of two

semi-submersible accommodation vessels, with options for four further units.

The vessels will be the most advanced and flexible units for worldwide

operations excluding Norway, and will be ready for operations in 2016.

The vessels will be of Gusto MSC's Ocean 500 design, and will be equipped with

500 beds, DP3 station keeping systems, 10-point chain mooring and 300 tonne

cranes.

Total value of the of the contracts is in excess of USD 400 million, and the

vessels will be financed through cash flow from operations, existing debt

facilities and new debt commitments.

In 2011 and 2012, Prosafe ordered two Norway compliant semi-submersible

accommodation vessels, Safe Boreas and Safe Zephyrus, from Jurong Shipyard Pte

Ltd. in Singapore. The construction process is going well, and when delivered,

the vessels will be the most sophisticated and well-equipped accommodation

vessels in the market.

Both vessels have already secured contracts, with Safe Boreas going to work for

Lundin Petroleum in Norway for a minimum six-month period from Q2 2015. Safe

Zephyrus is scheduled to work for Statoil in UK for eight months commencing in

the spring of 2016. Statoil also has an option to extend the contract for up to

a total of three years.

Dividend

The Board of Directors has resolved to declare an interim dividend equivalent to

USD 0.16 per share to shareholders of record as of 18 February 2014.

The shares will trade ex-dividend on 14 February 2014. The dividend will be paid

in the form of NOK 1.00 per share on 28 February 2014.

Possible UK Tax Changes

In its Autumn Statement 2013, HM Revenue & Customs in the UK proposed changes to

the taxation of offshore contractors. Depending on the final outcome this may

increase the tax cost in respect of contracts for operations in the UK.

Outlook

Prosafe saw a strong contract inflow during 2013, and the gross value of the

contract backlog amounted to approximately USD 1.7bn (incl. options) at the end

of the year, by far the highest level ever seen in Prosafe's history.

The accommodation market remains busy with a large amount of enquiries from

clients both in the North Sea and the rest of the world. There are, however,

fewer tenders taking place than at the same point in time last year, and it is

likely that the contract inflow in 2014 will be lower than the record level

experienced in 2013.

The underlying long-term demand drivers remain positive. Oil fields are

constantly growing older at the same time as the prospects for increased oil

recovery is improving. This in turn bodes well for demand for services related

to maintenance, modifications and upgrades. Furthermore, there are several large

hook-up and commissioning projects in the pipeline, particularly in Norway,

although the pace of new developments in the period from 2017 to 2019 could be

lower than in the period from 2014 to 2016.

A number of new semi-submersible accommodation vessels are scheduled to enter

the market over the next couple of years. The supply side is anticipated to

almost double in size during the period from 2012 to 2016. This increase in part

is as a consequence of a possible under-supply situation historically and partly

as a consequence of a positive underlying demand development which has arisen

during the past years. Furthermore, it should be noted that the growth in number

of units is made up by vessels of a varying degree of quality, both in respect

of technical specifications, owners' operating capabilities and financing

structures.

In addition to being the world's largest owner and operator of semi-submersible

accommodation vessels, the company also has the longest track-record in terms of

operations and HSEQ. Furthermore, it has the most efficient cost structure

through economies of scale, the world's most cost efficient fleet and an

efficient financing structure. Accordingly, Prosafe is well placed to further

enhance its position in the accommodation market over the coming years.

Prosafe is the world's leading owner and operator of semi-submersible

accommodation/service rigs. Operating profit reached USD 245.1 million in 2013

and net profit was USD 199.1 million. The company operates globally, employs

610 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: Q4 2013 report, Q4 2013 presentation

Larnaca, 10 February 2014

Georgina Georgiou, General Manager

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 51 64 25 30 / +47 909 43 673

Cecilie Helland Ouff, Senior Manager Finance and Investor Relations

Prosafe AS

Phone: +47 991 09 467

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

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