PROSAFE SE Q1 2024 Results
08 May 2024
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. Although we believe that the expectations reflected in such forward -looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. 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. To the extent this information includes information sourced from third parties, such as concerning the industry in which Prosafe operates, has not prepared such information and assumes no responsibility for it. Prosafe 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.
Key events Q1 2024
Operations and HSSE
- Good operating and safety performance on all vessels
- Utilisation of 56.3%, four out of seven vessels operating during the quarter
- Safe Concordia, Safe Notos and Safe Zephyrus with 100% uptime. Safe Eurus had 95% utilisation due to minor repairs
- Safe Concordia extended to Nov 2024, increasing backlog by USD 12.7 million
Financials
- Q1 revenue of USD 34.0 million and EBITDA of USD 7.2 million
- Liquidity of USD 63.4 million at end of Q1
- Closely monitoring compliance with the minimum liquidity covenant into 2025
- Investigating potential measures to strengthen liquidity and balance sheet going forward
Outlook
- Prosafe controlling a significant share of open high-end accommodation capacity from 2024 to 2026 in the North Sea
- North Sea operators planning future campaigns with ongoing bidding for 2025
- Improving Brazil market with rising day rates and durations on the back of increased demand
- Expect higher utilisation, improved day rates and earnings growth
3
Market
4
Improved utilisation in 2024 with 4 of 7 rigs operating
Vessel
Q1
2024
Q2 Q3
Q4
Q1
2025
Q2 Q3
Q4
Q1
2026
Q2 Q3
Q4
Q1
2027
Q2 Q3
Q4
Safe Zephyrus | Petrobras (Brazil) | |||||||
Safe Eurus | Petrobras (Brazil) | |||||||
Safe Notos | Petrobras (Brazil) | Petrobras (Brazil) | ||||||
Safe Concordia | US Gulf of Mexico | |||||||
Safe Boreas | DP3 vessel (UK | and NCS capable) | ||||||
Safe Caledonia | Available for | work in UK | ||||||
Safe Scandinavia | Cold-stacked (reactivation | time of 6 to 9 months) | ||||||
Safe Nova | Newbuild at yard (delivery timeline of approximately 12 months) | |||||||
Safe Vega | Newbuild at yard (delivery timeline of approximately 12 months) | |||||||
- Firm/option | - SPS/Maintenance compliance | |||||||
5
Rates in Brazil and the North Sea reaching 2015 levels
Brazil day rate development (USD/d) - 365 days operations
North Sea day rate development (USD/d) - seasonal operations
- 000
- 000
160 000 | Latest datapoint |
140 000 | ~120k-130k |
120 000 | Latest contract |
100 000 |
80 000
60 000 Current Brazil opex: USD 50-54k/d
- 000
- 000
0 | |||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
- 000
- 000
- 000
- 000
- 000
- 000
- 000
-
000
0
Latest contract
Current North Sea opex: USD 25-65k/d1
Latest
datapoints at
~160-210k
Av. Dayrate
NCS UKCS/Denmark
Avg day rate of USD 130k/day would equate to approx. USD 30m EBITDA
Avg day rate of USD 250k/day for 6 months2 would equate to approx. USD 30m EBITDA
6 | 1 | Depends on region and if the vessel is moored, DP or non-DP, please refer to slide 28 for OPEX details |
2 | Assuming only summer work in the North Sea |
Brazil FPSO growth driving increased demand
Brazil market (units)1
Potential FPSO driven demand
Incremental Demand | 13 |
Contracted Forecast | 12 |
Contracted | |
11 | |
10 | 10 |
9 |
2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
Floating production units in Brazil2
+29% | |||||||||||||||
88 | 90 | ||||||||||||||
84 | |||||||||||||||
77 | 80 | ||||||||||||||
70 | 72 | ||||||||||||||
62 | 63 | 64 | 66 | ||||||||||||
58 | |||||||||||||||
51 | 53 | ||||||||||||||
48 | |||||||||||||||
46 | |||||||||||||||
42 | |||||||||||||||
32 | 34 | 36 | |||||||||||||
29 | |||||||||||||||
2009 | 2011 | 2013 | 2015 | 2017 | 2019 | 2021 | 2023 | 2025 | 2027 | 2029 |
7 | 1) | Source: Prosafe, company and market reports |
2) | Source: Petrobras Strategic Plan 2024-28, market reports |
Indicative earnings potential in an improving market
Fleet EBITDA potential, assuming re-activation of Caledonia and Boreas, Concordia SPS and Eurus / Notos day rate reset
USD million | Current | Peak2 | Growth |
market1 | 2014-15 | Case3 | |
EBITDA/vessel North Sea | 22 | 50 | 40 |
EBITDA/vessel Brazil/RoW | 25 | 30 | 30 |
Current NIBD of USD 356m5 vs EBITDA potential
USD 125m | USD 200m | USD 275m | ||
EBITDA | EBITDA | EBITDA |
# vessels in North Sea | 2 | 2 | 3 |
# vessels in Brazil/RoW | 4 | 4 | 6 |
EBITDA | 144 | 220 | 300 |
Selling, General & Administrative (SG&A)4 | (19) | (20) | (25) |
Illustrative EBITDA | 125 | 200 | 275 |
2,8x
1,8x
1,3x
Current market | Peak 2015-16 | Growth |
- Based on latest observable and relevant fixtures of USD 200k/day in North Sea and USD 120k/day in Brazil, excluding Safe Scandinavia. Notos and Eurus contracted to 20226 / 2027 at below market rates
- Excluding Mexico and Safe Scandinavia during TSV operation. Excludes Safe Scandinavia
8 3) Includes newbuilds Nova and Vega plus Safe Scandinavia, calculations exclude required delivery payments, mobilisation and reactivation costs
- Expected underlying SG&A run rate
- NIBD per Q1'24, NIBD is reduced by a USD 8.5 million fair value adjustment of which USD 2.4 million is short-term
Enterprise value to replacement cost attractive in segment
Accommodation vessels attractively priced compared to other assets1
100% | EV / Replacement Cost | ||||||
90% | |||||||
80% | 68% | ||||||
70% | |||||||
58% | |||||||
60% | |||||||
49% | 47% | ||||||
50% | 46% | ||||||
38% | |||||||
40% | 35% | ||||||
30% | |||||||
20% | |||||||
10% | |||||||
0% | |||||||
TDW (PSV) | BORR | ODL (HE | PGS | SOFF (CSV) | Seadrill (7th | Accomodation | |
(Jackup) | semi) | (Ramform | gen. drillship) | vessel (PRS) | |||
3D vessel) * |
- Attractive average EV / replacement value versus other assets in the oil service segment
Low Prosafe asset valuation relative to replacement cost2
USD million
1 600 | USD 1 - 1.5 bn | ||||
1 400 | |||||
1 200 | |||||
1 000 | |||||
800 | |||||
600 | High ~550 | EV ~30 - 45% | |||
of RC | |||||
400 | |||||
Mid ~470 | |||||
65 | |||||
355 | |||||
200 | |||||
0 | |||||
EV | Broker values | Replacement cost | |||
Net Debt Market Cap
- Accommodation vessels trading at 30% to 45% of historical newbuild cost
- Broker valuations confirm robust asset backing to EV
9 | 1) | Source: Sparebank 1 Markets, Factset, Prosafe. Note* Implied value of PGS' fleet is highly sensitive to assumed MC library value. |
2) | Source: Prosafe, independent brokers. Replacement cost estimated in range of USD 1 to 1.5bn. |
Operations
10
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Disclaimer
Prosafe SE published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 05:20:05 UTC.
