Prosafe SE : Fourth quarter 2015 and full year results

Operating profit for 2015 amounted to USD 167 million and net profit was USD 85.6 million. Utilisation of the fleet was 70 per cent. Prosafe is taking proactive measures by renewing and updating its fleet, strengthening the balance sheet, increasing its financial flexibility and securing liquidity buffers.

Financials
(Figures in brackets refer to the corresponding period of 2014)

Full year 2015

Operating profit for 2015 amounted to USD 167 million (USD 248.3 million) and utilisation of the fleet was 70 per cent (87 per cent).

Net financial expenses for 2015 amounted to USD 70.9 million (USD 57 million). The increase results mainly from fair value adjustments of currency forward contracts and higher interest expenses. In accordance with IFRS, interest costs totalling USD 12.8 million (USD 7.9 million) have been allocated to new build and construction projects and consequently capitalised as part of the vessel costs.

Net profit for 2015 equalled USD 85.6 million (USD 178.8 million) and diluted earnings per share were USD 0.36 (USD 0.76).

Fourth quarter 2015

Utilisation of the fleet was 62 per cent (92 per cent). Operating profit for the fourth quarter amounted to USD 17.5 million (USD 77.4 million).

Jasminia remained off-hire in the quarter. An impairment of USD 9.4 million relating to Jasminia has been charged to the accounts in the fourth quarter. The net book value of the vessel is zero as at 31 December 2015.

A fee of USD 4 million relating to the cancelled towage of Safe Zephyrus was expensed in Q4 2015. Safe Zephyrus was delivered at the end of January 2016, and the final instalment was reduced by USD 30 million. This represents a seller's credit from the yard, to be repaid in a single payment on or before 15 June 2017. Safe Zephyrus is scheduled to commence a contract in Norway early Q3 2016.

Further in Q4 2015, non recurring items amounting to USD 3.4 million were charged and USD 2.25 million provided for relating to settlement of certain contractual matters and an operational incident resulting in the loss of an anchor wire.

Safe Boreas was on contract in Norway until mid-December, and Regalia was on contract in UK until late November.

Safe Bristolia was off contract throughout the quarter, and is now in a Gdansk yard for its special periodic survey (SPS).

Safe Astoria is located in Batam, Indonesia, where it has undergone minor works in the fourth quarter.

Safe Concordia, Safe Caledonia, Safe Regency, Safe Lancia, Safe Hibernia and Safe Britannia were fully contracted throughout the quarter.

The Safe Hibernia contract has been extended until the end of Q1 2016. Safe Britannia ended its contract at the end of December 2015, but the vessel remains in operational readiness mode in anticipation of new assignments.

Mechanical completion and commissioning of Scandinavia TSV is finalised. As stated in the recent operational update, during the acceptance testing certain specifications showed a need for some adjustments, which are expected to be completed in the near future. Once the testing is complete, the vessel will start mobilising to Oseberg East.

Net financial costs amounted to USD 22.2 million (USD 25.3 million). Net loss equalled USD 6.8 million (net profit of USD 51 million), corresponding to diluted earnings per share of USD 0.03 negative (USD 0.22 positive).

Total assets at 31 December amounted to USD 2 323 million (USD 1 817 million). Net interest-bearing debt equalled USD 1 189.9 million (USD 707.7 million), and the book equity ratio was 36.6 per cent (41.2 per cent).

Share issue
On 3 December 2015, the company raised NOK 590 million in gross proceeds through a private placement of 23,597,300 new shares, each with a par value of EUR 0.25 at a subscription price of NOK 25 per share, representing a premium of 4.6% on the closing price of the day.

The proceeds from the private placement have strengthened the company's balance sheet and liquidity position.

Amended credit facilities
The company's USD 1,300 million and USD 288 million credit facilities have been amended. The amendments provide increased operational and financial flexibility.

Fleet renewal
The company is taking delivery of the Safe Notos in February 2016 as part of its fleet renewal strategy. In connection with the delivery, Prosafe will draw USD 144 million of its committed credit facility. The final delivery instalment will be reduced by USD 29 million, by way of a seller's credit from Cosco (Qidong) Offshore Co., Ltd., repayable in a single payment by 31 December 2016, which results in increased liquidity for the company.

Outlook
The oil and gas services market remains challenging in the short and medium term with continued volatile oil price and reductions in E&P capital expenditure. Accordingly, Prosafe is taking proactive measures by renewing and updating its fleet, strengthening the balance sheet, increasing its financial flexibility and securing liquidity buffers. In addition, Prosafe continues to focus on cost optimisation and reduction.

The longer term outlook for offshore oil and gas remains positive with activity expected to improve in the medium to long term.

Prosafe continues to actively pursue suitable opportunities that, if successful, will add to the company's order book.

Prosafe is the world's leading owner and operator of semi-submersible accommodation vessels. Operating profit reached USD 167 million in 2015 and net profit was USD 85.6 million. The company operates globally, employs 850 people and is headquartered in Larnaca, Cyprus. Prosafe is listed on the Oslo Stock Exchange with ticker code PRS. For more information, please refer to www.prosafe.com

Attachments: Q4 2015 report, Q4 2015 presentation


Larnaca, 4 February 2016
Georgina Georgiou, General Manager
Prosafe SE


For further information, please contact:

Karl Ronny Klungtvedt, Chief Executive Officer
Prosafe Management AS
Phone: + 47 51 64 25 00

Stig Harry Christiansen, Chief Financial Officer
Prosafe Management AS
Phone: +47 478 07 813

Cecilie Helland Ouff, Senior Manager Finance and Investor Relations
Prosafe AS
Phone: +47 991 09 467