Cyprus: Prosafe Posts 2010 Results, Sees Growing Interest in Semi-submersible Accommodation Rigs
Prosafe’s operating profit for the fourth quarter came to USD 18.4 million and net profit amounted to USD 30 million. Operating profit for the year 2010 was USD 221.1 million, and net profit for 2010 equalled USD 198.5 million.
(Figures in brackets refer to the corresponding period of 2009)
Full year 2010
Operating profit for 2010 came to USD 221.1 million (USD 218.6 million), which reflects higher day rates. The utilisation rate for the rig fleet declined to 75 per cent (86 per cent).
Net financial expenses for 2010 declined to USD 18.9 million (USD 77.7 million). A gain of USD 23.7 million on the sale of the shares in Prosafe Production Public Limited and BW Offshore Limited has been recognised in the income statement in the fourth quarter 2010. The 2009 accounts included an impairment loss of USD 51.9 million relating to these shares.
Excluding the effect of the shares described above, net financial expenses equalled USD 42.6 million (USD 25.8 million). This change is due to a more favourable fair value adjustment of currency forwards in 2009 compared to 2010.
Taxes for 2010 amounted to USD 3.7 million (USD 13.7 million). The 2009 accounts included a provision for tax on an unrealised currency gain in Norway, which has been reversed in 2010.
Net profit for 2010 equalled USD 198.5 million (USD 127.2 million) and diluted earnings per share were USD 0.89 (USD 0.57). Excluding the effect of the shares described above, net profit and earnings per share equalled USD 174.8 million (USD 179.1 million) and USD 0.78 (USD 0.80) respectively.
Fourth quarter 2010
Operating profit for the fourth quarter came to USD 18.4 million (USD 57.2 million). This reduction is mainly due to a decline in rig utilisation to 61 per cent (84 per cent).
MSV Regalia operated for BP at Valhall in Norway until 23 November. Safe Scandinavia operated for Statoil in Norway until the end of October. Before replacing MSV Regalia, Safe Scandinavia adjusted the gangway to correspond to the landing platform height at Valhall. Safe Scandinavia commenced operation for BP at Valhall on 21 November.
Safe Concordia, Safe Astoria, Safe Bristolia and Safe Caledonia were idle in the fourth quarter.
Safe Scandinavia, MSV Regalia, Safe Bristolia and Safe Caledonia have carried out parts of their annual maintenance work in the fourth quarter.
Safe Esbjerg, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia and Safe Regency have been fully utilised in the fourth quarter.
Net financial items for the fourth quarter were USD 11.8 million positive (USD 65.0 million negative), reflecting the gain on shares as described above.
Net profit for the fourth quarter amounted to USD 30 million (net loss of USD 8.5 million), and earnings per share equalled USD 0.13 (USD 0.04 negative).
Total assets at 31 December amounted to USD 1 266.4 million (USD 1 355.5 million), while the book equity ratio rose to 32.4 per cent (19.5 per cent).
Five of Prosafe’s rigs are bareboat chartered to Interpetroleum Services, operating for Pemex offshore Mexico. These five rigs have firm contracts as follows: Safe Lancia until December 2012, Jasminia until June 2011, Safe Hibernia until May 2011, Safe Britannia until January 2013 and Safe Regency until August 2013.
Safe Esbjerg is operating for Mærsk Oil & Gas in the Danish North Sea until June 2011. In addition, the client has a one-year extension option.
Safe Caledonia will commence on a 9 month contract with BG in the UK North Sea in the beginning of March 2011. This contract has four two-week options.
MSV Regalia is due to commence operations for BP Norge in the Norwegian North Sea in mid-March.
Safe Scandinavia is operating for BP Norge in the Norwegian North Sea until mid-March. Safe Scandinavia will commence a 6 month contract with Statoil in early April 2011. Thereafter, Safe Scandinavia has a contract with BP Norge, commencing in October 2011.
Safe Concordia is due to commence a three year contract in Brazil for Petróleo Brasileiro S.A. (Petrobras) early in the second quarter of 2011.
Safe Bristolia and Safe Astoria are currently idle.
In the North Sea, the majority of fixed installations are mature and require both maintenance and modifications to keep up production and ensure safe operations. Improved oil recovery (IOR) projects and tie-ins of satellite fields to existing installations have extended the lifetime for many fields in the North Sea. Consequently, the outlook for modification, IOR and maintenance projects over the coming years appears positive.
Prosafe has five rigs operating offshore Mexico. Due to the efforts of keeping up oil production, the demand for accommodation services in Mexico appears to be stable going forward.
During the third quarter of 2010 there were two awards for semi-submersible rigs offshore Brazil for operations in the Campos basin. These awards confirm that Brazil is a growing market for safety and maintenance support services.
In summary, the demand outlook for semi-submersible accommodation rigs for the core market regions appears to be positive. Furthermore, there is a growing interest for semi-submersible accommodation rigs in other regions.
Source:Prosafe, February 17, 2011;