Prosafe Reports Best Quarter Ever
Prosafe announced that its net profit for the third quarter amounted to USD 34.9 million (USD 28.2 million excluding profit from discontinued operations), and diluted earnings per share were USD 0.78 (USD 0.83 excluding profit from discontinued operations).
Operating profit for the first nine months was USD 105.3 million (USD 81.2 million), and net profit equaled USD 95.7 million (USD 63.2 million excluding profit from discontinued operations). Diluted earnings per share were USD 2.50 (USD 1.86 excluding profit from discontinued operations).
Total assets at 30 September amounted to USD 2 178.8 million (USD 1 027.5 million), and the equity ratio was 54.9 per cent (55 per cent). The increase in both assets and equity reflects the acquisition of Consafe and the purchase of the shares in Petrojarl ASA.
Acquisition of shares in Petrojarl ASA
The company acquired 22 178 593 shares in Petrojarl ASA (Petrojarl) on 21 August this year, corresponding to 29.57 per cent of the shares in Petrojarl. The purchase price was NOK 50 per share. The acquisition was funded partly by cash and partly by the issue of 2 054 638 Prosafe shares at a price of NOK 349.50 per share.
Offshore Support Services
Operating profit for the third quarter came to USD 42.8 million (USD 24.3 million), which is the best-ever result for this division. The fleet utilization ratio was 91 per cent (95 per cent). This improvement reflects higher day rates and the expansion of the rig fleet.
All six rigs working in the Gulf of Mexico and MSV Regalia, which is on contract to Total off Angola, were in regular operation throughout the third quarter. Safe Caledonia and Safe Scandinavia operated in the UK sector of the North Sea, while Safe Bristolia and Safe Esbjerg operated off Russia and Denmark respectively. Safe Astoria was located in Australia in order to complete a special periodic survey and equipment overhaul.
Operating profit for the third quarter amounted to USD 9.6 million (USD 9.5 million). Work continued during the quarter on the conversion of MT Apollo for the Polvo field off Brazil and MT Ionikos for the Tui field off New Zealand. Both projects are progressing as planned, with contracts expected to commence in the second quarter of 2007.
The board of directors has decided to propose the distribution of a special dividend of NOK 20 per share for fiscal 2005.
This special dividend comes in addition to the ordinary payment of NOK 5.50 per share made earlier this year. Providing the proposal is approved by an extraordinary general meeting, the total dividend for 2005 will be NOK 25.50 per share (NOK 11 per share for 2004). Distribution of a special dividend is in line with the company's stated objective of combining a competitive return to shareholders with the maintenance of capital adequacy and the capacity to continue developing the company in accordance with the stated strategy.
The distribution of the special dividend will not affect the company's growth ambitions and capabilities.
The board's proposal will be considered by an extraordinary general meeting to be held in December. Notice of this meeting will be issued in the near future.
The campaign for Total by MSV Regalia off Angola saw new extensions being agreed. Two months of options were first declared with a value of USD 7.8 million, followed by a new three-month period worth USD 16.2 million. These extensions ensure continuous operation for the vessel at least until the end of August 2007.
A very high level of utilization has been ensured for the fleet in coming quarters. Six rigs are currently in operation in Mexico, three in the North Sea and one each in west Africa and Asia. The order backlog for 2007 is strong, with MSV Regalia, Safe Scandinavia and Safe Bristolia showing limited uncontracted periods. Only Safe Astoria is uncontracted for the full year. Demand remains strong, which is reflected in recent contract awards, and Prosafe is maintaining a very positive view of coming periods. A number of prospects are being pursued for 2007 and beyond, with demand from all the key geographical regions. Current market activity supports the view that profitability will continue to rise when new contracts are entered into for the vessels.
The outlook for Floating Production continued to strengthen during the quarter. Developments relating to the fields where Prosafe operates today indicate a higher level of future activity, not only from an engineering point of view but also with regard to the likelihood of extended employment for the Prosafe vessels.
Demand for new conversions has increased remarkably. During the quarter, Prosafe secured a USD 332 million letter of intent for the conversion and operation of an FPSO and acquired another suitable vessel for conversion.
Bidding activity has increased, and Prosafe is today involved in multiple bids and studies. In-house resources have grown considerably over the past 18 months, and the organization is currently capable of multiple parallel project executions. The target of winning two to four FPSO projects over the next six to 12 months remains firm.
Prosafe has continued to develop proprietary FPSO technology, and views this as an important tool in providing clients with competitive solutions. The high level of in-house resources and proprietary technology contributes significantly to ensuring that a quality FPSO delivery is made on time, and enhances the company's competitive advantages.
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