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Prosafe SE Investor Presentation 2010
3718_rns_2010-08-16_d89e2b62-6855-4642-8fcc-cda9152e7da7.pdf
Investor Presentation
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Prosafe Production
August 16, 2010
2nd quarter 2010
Prosafe Production
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 Production 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.
2
Prosafe Production
Summary
- EBITDA of USD 59.7 million
- Robust operational performance
- Improved market balance
- Board recommends not to accept offer from BWO
- Process of exploring strategic alternatives – including actively pursuing other buyers – continues
- Sale of mooring business postponed as a consequence of the BWO bid
Prosafe Production
Financial results
- Operations
- Market outlook
- BWO offer
Prosafe Production
Profit & Loss
| (unaudited figures in USD million) | Q2 10 | Q2 09 | Six months ended 30/06/2010 | Six months ended 30/06/2009 |
|---|---|---|---|---|
| Operating revenues | 106.5 | 80.5 | 211.8 | 141.1 |
| Operating expenses | (46.8) | (32.4) | (95.1) | (55.8) |
| Operating profit before depreciation | 59.7 | 48.1 | 116.7 | 85.2 |
| Depreciation | (36.0) | (19.6) | (68.6) | (33.3) |
| Impairment | 0.0 | 0.0 | 0.0 | (0.0) |
| Operating profit | 23.7 | 28.5 | 48.1 | 51.9 |
| Interest income | 0.0 | 0.1 | 0.1 | 0.3 |
| Interest expenses | (11.7) | (11.1) | (22.9) | (22.5) |
| Other financial items | (0.5) | (0.7) | (1.3) | (3.1) |
| Net financial items | (12.1) | (11.7) | (24.1) | (25.3) |
| Profit before taxes | 11.6 | 16.8 | 24.0 | 26.6 |
| Taxes | (5.9) | (3.7) | (7.5) | (7.9) |
| Net profit (loss) from continuing operations | 5.7 | 13.1 | 16.5 | 18.6 |
| Discontinued operations | ||||
| Net profit (loss) from discontinued operations | (1.3) | (0.9) | (2.1) | (1.3) |
| Net profit (loss) for the period | 4.4 | 12.2 | 14.4 | 17.3 |
| Earnings per share from continuing operations | 0.02 | 0.05 | 0.06 | 0.07 |
| Earnings per share diluted from continuing operations | 0.02 | 0.05 | 0.06 | 0.07 |
| Earnings per share | 0.02 | 0.05 | 0.06 | 0.07 |
| Earnings per share diluted | 0.02 | 0.05 | 0.06 | 0.07 |
Prosafe Production
Balance Sheet
| (unaudited figures in USD million) | 30/06/10 | 30/06/09 | 31/12/09 |
|---|---|---|---|
| Goodwill | 65.5 | 128.3 | 128.3 |
| Ships | 1,700.1 | 1,738.7 | 1,756.2 |
| Other non-current assets | 7.2 | 14.0 | 7.3 |
| Total non-current assets | 1,772.8 | 1,881.0 | 1,891.8 |
| Cash and deposits | 101.9 | 111.4 | 133.8 |
| Other current assets | 96.0 | 90.9 | 71.0 |
| Total current assets | 197.9 | 202.3 | 204.8 |
| Assets classified as held for sale | 62.8 | 0.0 | 0.0 |
| Total assets | 2,033.5 | 2,083.3 | 2,096.6 |
| Share capital | 25.5 | 25.5 | 25.5 |
| Other equity | 782.5 | 822.4 | 788.2 |
| Total equity | 808.0 | 847.9 | 813.7 |
| Interest-free long-term liabilities | 59.6 | 1.3 | 38.3 |
| Interest-bearing long-term debt | 930.8 | 1,106.5 | 1,001.1 |
| Total long-term liabilities | 990.4 | 1,107.8 | 1,039.4 |
| Other interest-free current liabilities | 69.5 | 111.6 | 92.9 |
| Current interest-bearing debt | 165.6 | 16.0 | 150.6 |
| Total current liabilities | 235.2 | 127.6 | 243.5 |
| Total equity and liabilities | 2,033.5 | 2,083.3 | 2,096.6 |
Prosafe Production
Cash Flow
| (unaudited figures in USD million) | Six months ended 30/06/2010 | Six months ended 30/06/2009 | 2009 |
|---|---|---|---|
| Profit before taxes from continuing operations | 24.0 | 26.6 | 12.1 |
| Profit (loss) from discontinued operations | (2.1) | (1.3) | (2.5) |
| Unrealised currency loss (gain) | 1.3 | 0.0 | (0.9) |
| Depreciation | 68.6 | 33.3 | 83.7 |
| Impairment | 0.0 | 0.0 | 46.7 |
| Taxes paid | (6.1) | (6.7) | (12.7) |
| Change in working capital | (48.3) | (34.7) | (8.1) |
| Other items from operating activities | 19.4 | 18.5 | 33.3 |
| Net cash flow from operating activities | 56.7 | 35.7 | 151.6 |
| Acquisition of tangible assets | (11.5) | (203.7) | (317.6) |
| Interest received | 0.1 | 0.3 | 0.7 |
| Net cash flow from investing activities | (11.4) | (203.4) | (316.9) |
| Proceeds from new interest-bearing debt | 20.0 | 100.0 | 235.0 |
| Repayment of interest-bearing debt | (76.1) | (10.1) | (107.6) |
| Interest paid | (21.2) | (21.8) | (39.2) |
| Net cash flow from financing activities | (77.2) | 68.2 | 88.1 |
| Net cash flow | (31.9) | (99.6) | (77.2) |
| Cash and deposits at beginning of period | 133.8 | 211.0 | 211.0 |
| Cash and deposits at end of period | 101.9 | 111.4 | 133.8 |
Prosafe Production
Shareholders as of 30 June 2010
| Account | No. of shares (million) | Ownership |
|---|---|---|
| BW OFFSHORE CYPRUS LIMITED (1) | 44.50 | 17.44 % |
| PROSAFE HOLDING LTD. | 19.78 | 7.75 % |
| BW EUROHOLDINGS LTD | 15.33 | 6.01 % |
| BW OFFSHORE CYPRUS LTD | 11.43 | 4.48 % |
| FOLKETRYGDFONDET | 9.95 | 3.90 % |
| MORGAN STANLEY & CO INTERNAT. PLC | 9.87 | 3.87 % |
| AWILCO INVEST AS | 8.01 | 3.14 % |
| BROWN BROTHERS HARRIMAN & CO | 7.50 | 2.94 % |
| RBC DEXIA INVESTOR SERVICES TRUST | 7.12 | 2.79 % |
| ORKLA ASA | 6.60 | 2.59 % |
| PARETO AKSJE NORGE | 5.96 | 2.34 % |
| PROSAFE SE | 5.60 | 2.19 % |
| UBS AG, LONDON BRANCH | 5.45 | 2.14 % |
| BW LPG FPSO I LTD | 5.00 | 1.96 % |
| HSBC BANK PLC | 4.42 | 1.73 % |
| ODIN OFFSHORE | 3.93 | 1.54 % |
| STATE STREET BANK AND TRUST CO. | 3.67 | 1.44 % |
| BANK OF NEW YORK MELLON SA/NV | 3.23 | 1.27 % |
| PARETO AKTIV | 2.83 | 1.11 % |
| BANK OF NEW YORK MELLON | 2.76 | 1.08 % |
1) BW Offshore Ltd is controlled by BW Euroholdings Ltd's parent company BW Group Ltd. In total they own 76,265,270 shares in Prosafe Production Public Ltd, which constitutes $29.88\%$ of the shares outstanding.
Prosafe Production
Operations
- Financial results
- Operations
- Market outlook
- BWO offer
9
Prosafe Production
Solid operational performance
- Strong uptime delivered to clients also in Q2 10
- Robust HSE performance
- Slightly higher maintenance level expected in Q3
World class operations
Prosafe Production
Contract status
- 50% ownership. Fred. Olsen Production holds remaining 50%
- 50% ownership. Equinox holds remaining 50%
Conversion/yard stay
Availability dayrate
Firm contract
Option
Prosafe Production
Market Outlook
- Financial results
- Operations
- Market outlook
- BWO offer
12
Prosafe Production
Improved market balance
- 15-20 FPSO contract awards expected annually next five years
- Execution capacity on supply side significantly reduced in last few years
- Improved market balance
- Substantial part of market is in challenging areas:
- High local content requirements
- Lack of infrastructure
Possible projects next five years by region
No of players actively pursuing projects
Prosafe Production
Positive short-term outlook
- Possible FPSO lease contracts next 12 months:
- Australia: 2
- Brazil: 7
- WA: 3
- SE Asia: 6
- Prosafe Production is well positioned in key regions
- Few redeployment candidates available will favour new conversions
Historical and expected FPSO orders
Source: Fearnley Offshore
BWO offer
Prosafe Production
Financial results
Operations
Market outlook
BWO offer
15
BWO offer
Board recommends to reject
Prosafe Production
- BWO announced intention to put forward an offer of all outstanding shares in Prosafe Production on 21 June
- The offer was formally put forward on 27 July – offer period lasts to 25 August
- Relevant offer price: 1.2 BWO share + NOK 2.00 in cash per PROD share
- Board of Directors recommends shareholders not to accept the offer as it does not reflect underlying values
- Process of exploring strategic alternatives continues
- Including actively pursuing alternative bidders to present an alternative offer
Prosafe Production
Summary
- EBITDA of USD 59.7 million
- Robust operational performance
- Improved market balance
- Board recommends not to accept offer from BWO
- Process of exploring strategic alternatives – including actively pursuing other buyers – continues
- Sale of mooring business postponed as a consequence of the BWO bid
Prosafe Production
Contact details
Prosafe Production Public Limited
City House, 3rd Floor
6 Karaiskakis Street
CY-3032 Limassol
Cyprus
Phone: +357 2550 3120
Fax: +357 2550 3001
Prosafe Production Management B.V.
Polarisavenue 1
Unit 17
2132 JH Hoofddorp
The Netherlands
Phone: +31 (0) 23 7271 235
Fax: +31 (0) 23 7271 242
Prosafe Production Services Pte Ltd
1 International Business Park
10-01 The Synergy
Singapore 609917
Singapore
Phone: +65 6665 6200
Fax: +65 6567 5110
www.prosafeproduction.com
Investor Relations contact
Sven Børre Larsen
EVP and CFO
Tel.: +31 (0) 23 7271 240
Mob.: +31 (0) 65 156 5 186
E-mail: [email protected]