First quarter 2020 report – Adapting to a new reality
After several years of low activity across the industry, the company has presented a business plan and a restructuring proposal to lenders which – if approved as proposed – will result in a sustainable balance sheet. The revised business plan reflects a new reality in light of Covid-19, structural changes, oil price collapse, oversupply and anticipated impact on future activity and performance.
Consequently, an impairment of USD 810.5 million was made to the book value of vessels in the quarter resulting in a negative book equity of USD 858.9 million by the end of the quarter. The company has sufficient liquidity of USD 184 million at the end of the quarter and continues to operate on a going concern basis on the assumption that there is justified hope to agree a sustainable financial solution with lenders.
(Figures in brackets refer to the corresponding period of 2019)
- Prosafe implemented Covid-19 plans early to safeguard people and assets, and this has proven successful both onshore and offshore.
- Total liquidity of USD 183.6 million per Q1 2020. Based on a continuation of the forbearance arrangement and the deferral of making payment of scheduled instalments and interests on loans, the company is all else equal able to stay cash positive well beyond the next 12 months.
- The company has presented a restructuring proposal to lenders that if approved as proposed, will result in a sustainable balance sheet. The company has requested an extension to the forbearance arrangement till end June 2020 to ensure stability and sufficient time to seek agreement with lenders.
- On 13 February 2020, Prosafe and Floatel International mutually decided to discontinue the merger process due to financial uncertainty and process risk.
- In light of Covid-19 and the oil price crash, the company is in commercial discussions with several clients.
- Fleet utilisation of 32.7 per cent (62.5 per cent) in the quarter.
- Firm order book of USD 127 million per Q1 2020 (USD 159 million).
- Reported EBITDA was USD 1.1 million (USD 24.1 million positive) in the quarter. Underlying EBITDA in the quarter adjusted for one-off effects was USD 2.1 million.
- An impairment of USD 810.5 million made to the book value of vessels and the book equity was negative by USD 858.9 million as of March 2020.
Jesper K. Andresen, Prosafe’s CEO says, “The Covid-19 pandemic and the oil price collapse since March 2020 have resulted in a dramatic change in market conditions, economic outlook and ways of living and working. The entire oil and gas services industry is exposed to a “double Black Swan event”, and short-term planning as well as longer term forecasting is extremely challenging, whilst at the same time being critical. We are doing our utmost to adapt to a new reality and aim to arrive at a sustainable financial solution in order to protect values to the extent possible, and establish a sound basis upon which to create value in the future from safe and cost efficient operations, commercial performance and strategic initiatives including consolidation”.
A complete version of the Q1 2020 earnings release can be downloaded here: https://www.prosafe.com/investor-information/reports-results/
Prosafe is a leading owner and operator of semi-submersible accommodation vessels. The company is listed on the Oslo Stock Exchange with ticker code PRS. For more information, please refer to www.prosafe.com
26 May 2020
For further information, please contact:
Jesper K. Andresen, CEO
Phone: +47 51 65 24 30 / +47 907 65 155
Stig Harry Christiansen, Deputy CEO and CFO
Phone: +47 51 64 25 17 / +47 478 07 813
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act