Main figures
(Figures in brackets refer to the same period last year)
Operating profit for the second quarter equalled NOK 214m (NOK 179m). Adjusted for goodwill amortisation of NOK 17m, the operating profit equalled NOK 231m.
Profit after taxes for the second quarter came to NOK 160m (NOK 135m). Cash flow from operating activities equalled NOK 212m (NOK 179m), while fully diluted earnings per share and cash flow per share equalled NOK 4.69 (NOK 3.97) and NOK 6.21 (NOK 5.26), respectively. Adjusted for goodwill amortisation, fully diluted earnings per share equalled NOK 5.18.
Operating profit for the first half-year was NOK 358m (NOK 241m). Adjusted for goodwill amortisation of NOK 34m, the operating profit was NOK 392m.
Profit after taxes for the first half-year came to NOK 253m (NOK 194m). Cash flow from operating activities amounted to NOK 479m (NOK 255m), while fully diluted earnings per share and cash flow per share equalled NOK 7.41 (NOK 6.41) and NOK 14.04 (NOK 8.42), respectively. Adjusted for goodwill amortisation, fully diluted earnings per share were NOK 8.41.
Operations
Offshore Support Services generated an operating profit of NOK 155m (NOK 149m) for the second quarter. Fleet utilisation was 87% (91%). The improved result is attributable to the new contract for the Safe Hibernia, and lower depreciation due to revised estimate for the useful life of the rigs from 30 to 35 years.
Four of the rigs – the Safe Britannia, Safe Lancia, Jasminia and Safe Regency – have throughout the quarter been engaged on Cantarell in the Gulf of Mexico.
In mid May, the Safe Caledonia completed her contract in the Gulf of Mexico. Subsequently, she was mobilised to the North Sea, where she commenced the contract with Statoil on Sleipner in early July.
In April, Prosafe received a letter of intent from Phillips for the use of the Safe Caledonia offshore Australia from April 2003, and Prosafe enters thus a new geographical market. The contract has a fixed term of 241 days, and an option period of six months. The value of the fixed term of the contract is USD 24m.
The Safe Hibernia, which Prosafe acquired in February, went on contract in the Gulf of Mexico in mid May. The bareboat contract has a fixed term of one year, and the value is USD 13.3m.
After completion of the contract with Statoil on Åsgard, the MSV Regalia has since mid April carried out subsea construction work for BP west of Shetland. In June, Prosafe ended the co-operation with Schlumberger Norge AS on subsea well intervention. Prosafe’s commitment to this segment remains firm, and the company is currently preparing for modification of MSV Regalia and for the first contract for Statoil in the spring of 2003.
In the second quarter, the Safe Scandinavia has been on contract with ChevronTexaco on Alba in the UK sector of the North Sea. She went off this contract in late July, and commenced the contract with Statoil on Statfjord in early August.
Floating Production generated an operating profit of NOK 52m (NOK 30m) for the second quarter, before goodwill amortisation of NOK 17m. The improved result is attributable to the contract for the Espoir Ivoirien offshore Côte d’Ivoire, which commenced in February this year.
The FPSO Petroleo Nautipa went off the contract offshore Angola in late April, and has undergone necessary modification prior to the start-up of the contract with Vaalco offshore Gabon at the end of the third quarter.
The conversion of the Grey Warrior to an FPSO for Abo offshore Nigeria is currently ongoing at the yard in Singapore. The project is to be completed in the spring of 2003, when the ship is going to commence an eight-year contract with Agip.
Drilling Services generated an operating profit of NOK 30m (NOK 20m) for the second quarter, the best quarterly result so far for this division. The improved result is attributable to increased activity, but also better margins.
Recently, several contracts within this division have been extended. Norsk Hydro have exercised their option to extend the contract for the use of the modularised drilling and intervention rig, Rubicon, on Snorre TLP for one year from August 2002. The contract value is circa NOK 120m. In addition, Norsk Hydro have exercised their options for a two-year extension on both Snorre TLP and Snorre B from October 2002. The combined contract value is circa NOK 290m.
Outlook
The outlook for the business within Offshore Support Services is positive. Indications from Mexico give us reason to believe that demand for accommodation and service rigs from this region will remain high. In the short term, our focus remains on securing contracts for the Safe Lancia and Safe Britannia. Prosafe continues to map future demand in other regions than the North Sea, Gulf of Mexico and Australia.
The market outlook within Floating Production is strong. The latest prognoses performed by recognised industry analysts indicate up to a doubling of the number of FPSOs in production over the next five years. Demand for FSOs is also expected to be high. Prosafe continues to carefully follow the development in the industry in order to be in the best possible position when the right projects come to the market. At the same time, focus is on the conversion of the Grey Warrior for the Abo field, which is scheduled to start production in the course of the first quarter 2003, and on the modification of the Petroleo Nautipa, which is scheduled to go on contract with Vaalco offshore Gabon.
Activity within Drilling Services is high. Focus remains on safe and efficient operations of existing contracts and on securing continued operation on Oseberg from this autumn. We expect that the activity level will remain high in the next periods.
Prosafe is listed on the Oslo Stock Exchange with ticker code PRS.
Oslo, 6 August 2002
For more information, please contact:
Arne Austreid President & CEO Phone no. +47 51 64 25 81 / +47 900 77 334
Stig Christiansen CFO Phone no. +47 51 64 25 30 / +47 900 85 961
