Cyprus: Prosafe’s 3Q Operating Profit Down on Lower Contribution of Safe Bristolia

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Cyprus Prosafe's 3Q Operating Profit Down on Lower Contribution of Safe Bristolia

Operating profit for the third quarter came to USD 69 million and net profit amounted to USD 62.8 million. The utilisation of the rig fleet was 91 per cent.


(Figures in brackets refer to the corresponding period of 2010)

Operating profit for the third quarter amounted to USD 69.0 million (USD 83.0 million). Utilisation of the rig fleet was 91 per cent (80 per cent). The main reason for the decline in operating profit is lower contribution from Safe Bristolia.

Safe Scandinavia, MSV Regalia, Safe Caledonia, Safe Esbjerg, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia, Safe Regency, Safe Bristolia and Safe Concordia have been fully utilised in the third quarter.

Safe Astoria was idle in the quarter. The rig has been at the Britoil Offshore yard in Indonesia undergoing upgrade and renewal survey.

Net financial costs amounted to USD 6.4 million (USD 6.4 million), and include a net gain of USD 10.2 million on the sale of the shares in Floatel International and a write-off of USD 4.5 million of non-amortised borrowing costs relating to the previous credit facility.

Net profit equalled USD 62.8 million (USD 72.0 million), corresponding to diluted earnings per share of USD 0.28 (USD 0.32).

Total assets at 30 September amounted to USD 1 324.5 million (USD 1 389.7 million). Net interest-bearing debt equalled USD 611.2 million (USD 706.8 million), while the book equity ratio increased to 34.2 per cent (28.8 per cent).


The Board of Directors resolved on 2 November 2011 to declare an interim dividend equivalent to USD 0.166 per share to shareholders of record as of 11 November 2011. The shares will trade ex-dividend on 9 November 2011. The dividend will be paid in the form of NOK 0.94 per share on 23 November 2011.


Six of Prosafe’s rigs are on bareboat charters in Mexico for end-user Pemex. The six rigs have firm contracts as follows: Safe Hibernia until mid-December 2011, Safe Lancia until end-December 2012, Jasminia until end-December 2012, Safe Britannia until mid-January 2013, Safe Bristolia until end-March 2013 and Safe Regency until early August 2013.

Safe Caledonia is scheduled to operate for BG in the UK North Sea until 17 March 2012. The client has two one-week extension options.

MSV Regalia completed operations for BP in the Norwegian North Sea for BP in mid-October 2011. On 1 November, the rig commenced operations for Talisman at the Yme field in Norway for a 107-day contract. After this, MSV Regalia has a six-month contract with Talisman in the UK North Sea, which is expected to commence in early March 2012.

Safe Scandinavia started operations for BP in mid-October 2011, and is presently scheduled to complete this contract in early March 2012. BP has two 14-day extension options. In May 2012, the rig is planned to commence operation for ConocoPhillips in Norway, and thereafter move to the UK North Sea with a firm contract until October 2012 and extension options until December 2012.

In the second quarter, Safe Concordia commenced on a three-year contract with Petrobras in Brazil.

Safe Astoria is currently undertaking an upgrade and a five-year special periodic survey. Woodside recently awarded the rig a contract for 150 days of work in Australia commencing in April/May 2012. In addition, the client has two one-month extension options.

Safe Esbjerg is currently idle.

The number of offshore installations has increased continuously since the 1970s, and many of the installations have exceeded their original design life. The technological development in combination with the high oil price lead to high activity related to improved oil recovery and tie-ins of satellite fields, which should drive further need for life extensions of existing infrastructure, positively impacting the demand for accommodation and service rigs.

In the North Sea, several redevelopment and maintenance projects are planned for the coming years. In addition, there have recently been made large discoveries in the region, positively impacting the long-term demand picture. Consequently, the outlook for the North Sea market appears positive.

The demand in Mexico is mainly driven by the efforts of keeping up oil production at the Cantarell field. However, in the longer term, demand could potentially evolve also from new developments in deeper waters.

Current accommodation demand offshore Brazil mainly comes from the Campos basin, where accommodation units are assisting with maintenance of FPSOs and fixed installations. In the longer term, there is a potential for demand also in other basins in Brazil.

Prosafe recently announced a contract in connection with a redevelopment offshore Western Australia, and more prospects in the Asia and Australia region are identified medium to long term.

In summary, provided that the oil price and other input factors into oil companies’ E&P budgets continue to stay around the current levels, the outlook for positive developments in the accommodation and service rig market over the next few years appears good.

Source:Prosafe , November 2, 2011

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