Prosafe Net Profit at $54.9 Mln

Prosafe, the world’s leading owner and operator of semi-submersible accommodation vessels, today announced its second quarter results.

Operating profit for the second quarter came to USD 83.2 million and net profit amounted to USD 54.9 million (up from 35.9 in the same period last year).

The utilisation of the fleet was 84 per cent in the second quarter. An interim dividend of NOK 0.89 per share was resolved. The global market for offshore accommodation vessels remains robust and Prosafe is confident that further contracts will be entered into over the coming months.

Utilisation of the fleet was 84 per cent (78 per cent) in the second quarter. Operating profit amounted to USD 68.7 million (USD 49.8 million).

Safe Caledonia, Safe Concordia, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia and Safe Regency were on contract throughout the quarter.

Safe Concordia is operating on a long-term contract in Brazil. In the second quarter, the average effective day rate was approximately USD 144 000.

Safe Scandinavia commenced the contract with ConocoPhillips at Jasmine in UK on 6 April, and has been in operation since then.

Regalia commenced operation for Shell at the Draugen field in Norway on 30 April, and was in operation throughout May and June. Due to the yard stay before contract commencement, operating expenses in the second quarter were approximately USD 2 million higher than in normal operation.

Safe Bristolia commenced the contract for Elf Exploration UK on 3 May. Due to the yard stay and preparation for contract commencement in the North Sea, operating expenses in the second quarter were approximately USD 4.5 million higher than in normal operation.

Safe Astoria remained idle throughout the quarter.

Net financial costs declined to USD 12.5 million (USD 13.3 million). Interest costs were lower mainly due to lower interest rates and capitalisation of interest costs relating to the new build projects.

Net profit amounted to USD 54.9 million (USD 35.9 million), corresponding to diluted earnings per share of USD 0.24 (USD 0.16).

Total assets at 30 June amounted to USD 1 502.9 million (USD 1 389.8 million), while the book equity ratio rose to 44 per cent (34.7 per cent). Net interest-bearing debt stood at USD 651 million (674 million).

Dividend

On 21 August 2013, the Board of Directors resolved to declare an interim dividend equivalent to USD 0.15 per share to shareholders of record as of 30 August 2013. The shares will trade ex-dividend on 28 August 2013. The dividend will be paid in the form of NOK 0.89 per share on 11 September 2013.

Outlook

Five of Prosafe’s vessels are on bareboat charters in Mexico for ultimate use by Pemex. The five vessels have contracts as follows; Safe Lancia until mid-September 2013, Jasminia until end-October 2013, Safe Hibernia until December 2013, Safe Regency until end-March 2014 and Safe Britannia until end of 2014.

On 30 April, Regalia commenced a 180-day contract with Norske Shell at the Draugen facility, Norway. Shell recently exercised a one-month option, extending the contract throughout October 2013. In addition, Prosafe has granted Shell an additional 14-day extension option. After completion of the contract, the vessel will undergo an upgrade and a five-year special periodic survey (SPS), before commencing on a contract with Statoil in Norway next year.

Safe Bristolia commenced a 173-day contract with Elf Exploration in the UK on 3 May.

After completion of the current contract with ConocoPhillips in UK, Safe Scandinavia will undergo an upgrade/life extension project together with the five-year SPS, before commencing on a contract with Statoil in Norway next year.

Safe Caledonia is operating for BP in the UK sector of the North Sea until end-March next year. Thereafter, the vessel will operate for Nexen in the UK sector of the North Sea. The contract with Nexen has been extended to a 330-day contract at a day rate of USD 235 000.

In Brazil, Safe Concordia is operating for Petrobras on a contract until June 2014.

Safe Astoria is currently idle and is at the yard in Batam, Indonesia. The vessel has a contract with a minimum duration of 11 months for Shell Philippines, commencing June/July 2014.

Driven by a combination of maintenance and modification projects and new developments, the market for offshore accommodation in the North Sea has been growing in recent years, and the demand outlook remains strong. The tendering activity was at a high level in the first half of the year, and it is anticipated to be somewhat lower in the second half.

In Brazil and Mexico, there are a number of opportunities and tenders for long-term requirements, mainly driven by maintenance and improved oil recovery (IOR) projects. However, particularly in Brazil, the number of potential suppliers has increased and competition is strong.

In summary, the global market for offshore accommodation vessels remains robust. With a number of bids still outstanding, Prosafe is confident that further contracts will be entered into over the coming months.

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Press Release, August 22, 2013