First quarter 2023 results
(Figures in brackets refer to the corresponding period of 2022)
EBITDA for the first quarter was negative USD 6.4 million, mainly driven by lower utilization with two vessels operating in Brazil during the quarter and costs related to contract preparations for new contracts in Brazil and the US Gulf of Mexico. The demand outlook in Prosafe’s core markets is favourable from 2024 and onwards, and a significant tightening of the market balance for high end vessels is expected.
Operations, HSSE and backlog
- Q1 2023 utilisation of 28.6 (68.1) per cent, two out of seven vessels operating during the quarter
- Good operating and HSSE performance on all vessels
- Backlog of USD 316 million (USD 117 million) at quarter end
- Revenues of USD 14.3 million (USD 35.5 million) and EBITDA of negative USD 6.4 million (positive USD 4.8 million)
- Earnings decreased compared to Q1 2022 due to lower utilization and contract preparations
- Cash flow from operations of USD 6.2 million (negative USD 0.4 million), positively impacted by working capital release as vessels came off contracts
- Capex of USD 14.8 million and capitalized mobilization cost of USD 4.0 million
- Liquidity of USD 74.6 million (USD 64.7 million) at end of quarter
Market and outlook
- Slow 2023 North Sea market as expected
- Tender activity for 2024 and 2025 increased with additional 1 to 2 tenders expected in the North Sea and a minimum of 2 tenders in Brazil expected for 2024
- Favourable demand outlook in core markets, with multiple FPSOs coming on stream in Brazil, an all-time high number of new Plans for Development and Operation in Norway, increased maintenance activity in the UK as well as increased oil and gas activity globally
- 2023 liquidity is impacted by the low activity in the North Sea and capital expenditure plus mobilization spend for new contracts in Brazil and US Gulf of Mexico (GoM)
- Additional capital will be required to mitigate a covenant breach and potential liquidity shortfall from Q3/Q4 2023. The annual general meeting has granted the board an authorization to raise additional capital and the board is confident that additional capital can be raised ahead of the potential shortfall in Q3
“We had high activity in the quarter related to the successful mobilization of Safe Zephyrus to Brazil, ramp-up of contract preparation activities on Safe Concordia and readying Safe Notos for the upcoming off-hire period. We are particularly pleased that Safe Zephyrus stared its 650-day contract with Petrobras as planned on 1 May 2023,” says Jesper K. Andresen, CEO of Prosafe.
“We continue to see a soft North Sea market in 2023 with limited prospects for Safe Caledonia and Safe Boreas. While additional contract opportunities cannot be ruled out, we do not expect significant earnings from the two units this year. For 2024 and beyond, activity is increasing with several additional tenders in the North Sea and expectations of further contract opportunities in Brazil for 2024 and beyond in the coming months. Long-term, we are optimistic on the outlook and see significant potential for a market tightening and increased day rates.”
Jesper K. Andresen, CEO and Reese McNeel, CFO will on 11 May 2023 at 10:00 a.m. CEST present the results at the Hotel Continental, Stortingsgata 24/26, Oslo. The presentation is open to the public and can also be followed live via web streaming at www.prosafe.com
It will be possible to ask questions during the presentation by using the Q&A tool embedded in the webcast. These questions will be answered after the presentation. A replay of the audiocast will be made available on Prosafe’s website shortly after.
A complete version of the Q1 2023 earnings release and the Q1 2023 presentation can be downloaded from https://www.prosafe.com/investor-information/reports-results/ and www.newsweb.no
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
Stavanger, 10 May 2023
For further information, please contact:
Jesper K. Andresen, CEO
Phone: +47 51 65 24 30 / +47 907 65 155
Reese McNeel, CFO
Phone: +47 51 64 25 17 / +47 415 08 186
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.