Q4 2010 and preliminary results 2010
(Thomson Reuters ONE) -
Highlights
* Q4 2010 EBITDA of USD 87.6 million excluding non-recurring items
* EBITDA from continuing operations of USD 73.6 million in the fourth quarter
and USD 201.8 million for the year 2010, before results of associates and
restructuring costs
* Acquisition of Prosafe Production completed
* Received payment of USD 531.5 million for the sale of the APL division
* Uptime of 98.6% after downtime on Ningaloo Vision
* Start of day rate payments for BW Pioneer under discussion
* Completed year-end fleet valuation - net impairment charges of USD 85.0
million
* Syndication of USD 2.4 billion seven year loan facility completed
* Dividend policy proposed for Annual General Meeting in May - 20-25% of
EBITDA with quarterly payments
* FSO Endeavor contract extended until April 2011 (options until April 2013)
* Final contract negotiations for Bien Dong FSO in Vietnam
BW Offshore hosts a presentation of the financial results at 09:00 (CET) today
at 'Shippingklubben` (Haakon VII gt 1, Oslo, Norway). The presentation will be
given by CEO Carl K. Arnet and CFO Knut R.Sæthre. The presentation will be
broadcasted via webcast, and will also be available for replay. Please visit
www.bwoffshore.com for link and login details.
Financial results
The summary relates to the financial results of Q4 2010, please see the attached
report for the preliminary results for 2010.
Operating revenues were 255.8 million, an increase of USD 198.1 million (343%)
compared to USD 57.7 million in Q4 2009.
BW Offshore obtained control of Prosafe Production Ltd (PROD) on 1 October
2010. The PROD fleet has consequently been consolidated as of the fourth quarter
2010. The increase in revenue is primarily a result of the consolidation but
also reflects revenue recognized on the Papa Terra contract.
Operating expenses were USD 216.9 million, an increase of USD 190.5 million
compared to USD 26.4 million in Q4 2009. The increase in operating expenses is
mainly a result of the consolidation of PROD, a charge of USD 14.0 million
related to disputed import duties for the importation of the FPSO YÙUM K`AK`NÀAB
to Mexico in 2007 and expenses recognized on the Papa Terra project. In addition
the fourth quarter operating expenses includes USD 34.7 million in restructuring
costs related to the acquisition of PROD. This amount includes costs related to
personnel reductions, fees to external advisors, terminated office leases and
other identified restructuring costs. Operating expenses excluding the
restructuring costs were USD 182.2 million. Restructuring costs reported by PROD
in the third quarter report are included in the USD 34.7 million expense in the
consolidated fourth quarter figures.
Changes in fair market values of currency hedges was negative USD 1.4 compared
to negative USD 0.1 million in Q4 2009.
EBITDA for the quarter was USD 38.9 million, an increase of USD 18.3 million
(89%) compared to USD 20.6 million in Q4 2009. EBITDA for the quarter excluding
restructuring costs was USD 73.6 million.
Impairment charges totaling USD 85.0 million, including a reversal of a previous
impairment charge, have been taken in the fourth quarter and relate to the
operating vessels and vessels under conversion.
The net financial result amounted to a loss of USD 23.5 million, an increase of
USD 18.1 million compared to a net loss of USD 5.4 million in Q4 2009. The
acquisition of PROD and the refinancing of BWO and PROD loan facilities resulted
in restructuring costs of USD 12.7 million, which mainly consists of the
expensing of capitalized costs on the existing loan facilities. These
restructuring costs are included in other financial items.
The Company has hedging policies in place with the objective of reducing
exposure to currency and interest rate fluctuations. The improvement in the
financial items was mainly due to changes in fair market value on financial
instruments of USD 9.8 million compared to a loss of USD 13.9 million in Q4
2009.
The result before tax was a loss of USD 115.1 million, a decrease of USD 116.2
million compared to a profit of USD 1.1 million in Q4 2009. The income tax
expense was USD 7.2 million, an increase of USD 4.4 million compared to USD 2.8
million in Q4 2009. The increase is due to the consolidation of PROD.
Net loss before discontinued operations was USD 122.3 million compared to a loss
of USD 1.7 million in Q4 2009. Net loss including discontinued operations was
USD 6.6 million compared to a loss of USD 7.3 million in Q4 2009.
At 31 December 2010, total assets amounted to USD 3,670.2 million compared to
USD 2,393.5 million at 31 December 2009. The net increase of USD 1,276.7 million
(53%) mainly relates to the consolidation of PROD, increased book values of
vessels undergoing conversion, increased cash deposits offset by the sale of APL
assets and reduced receivables. Goodwill at 31 December 2010 relates to the
acquisition of PROD while Goodwill at 31 December 2009 related to the
acquisition of APL in 2007.
Total equity at 31 December 2010 amounted to USD 1,375.6 million, an increase of
USD 454.7 million (49%) compared to USD 920.9 million at 31 December 2009. The
increase is mainly due to issuing new equity related to the acquisition of PROD.
Net cash flow from continuing operating activities was USD 98.2 million compared
to USD 123.4 million in Q4 2009. Net cash flow from operating activities,
including discontinued operations was USD 140.1 million compared to USD 121.1
million in Q4 2009. Net cash outflow from investing activities was USD 66.8
million compared to cash outflow of USD 102.1 million in Q4 2009. Cash flow from
investing activities relates mainly to the conversion projects. Net cash outflow
from financing activities was USD 383.1 million compared to inflow of USD 1.7
million in Q4 2009.
At 31 December 2010, the Company had USD 228.2 million in cash and deposits,
compared to USD 68.0 million in 2009. Currently, the Company has drawn USD
610.0 million on the USD 1,500 million credit facility and USD 900.0 million on
the USD 1.2 billion credit facility (PROD). Net debt amounted to USD 1,401.5
million at 31 December 2010, compared to USD 849.3 million at 31 December 2009.
BW Offshore has on 29 December 2010 completed the syndication process for a USD
2.4 billion seven year senior secured credit facility. The credit facility was
substantially oversubscribed by a group of 15 leading international banks. The
facility will be used to refinance BW Offshore and Prosafe Production's main
credit facilities, as well as to finance further growth for the Company. BW
Offshore expects the loan documentation to be completed in Q1 2011.The USD 1.5
billion loan facility, (BW Offshore) and the USD 1.2 billion loan facility
(PROD) is a result of the refinancing presented as current interest bearing debt
at 31 December 2010.
The APL division was sold in December 2010 for gross proceeds of USD 531.5
million in cash. The final sales price is still subject to net working capital
adjustments. As a result of the sale, the APL business has been classified as a
discontinued operation. The net result from the discontinued business in Q4 was
USD 5.8 million, compared to USD -5.6 million in Q4 2009
Floating Production
Including ongoing conversions, BW Offshore`s fleet now totals sixteen FPSOs, two
FSOs and two conversion candidates.
All FPSOs and FSOs experienced stable performance during the fourth quarter
except for the FPSO Ningaloo Vision, which was shut down for part of Q4 2010 due
to leakage in the fluid swivel and one defective mooring line. Repair work has
been completed, and the FPSO is now back in operation.
The FPSO BW Pioneer was hooked up to the buoy in October 2010. The FPSO should
be receiving stand-by dayrates once Petrobras has approved the unit. Petrobras
has still not approved the unit and BW Offshore has therefore not booked any
revenue from stand-by dayrate. Petrobras and BW Offshore are still discussing
the formal approval of the vessel.
BW Offshore's three ongoing FPSO conversions, P-63 (Papa Terra), BW Joko Tole
(TSB) and BW Athena, are all progressing in line with expectations.
BW Joko Tole and BW Athena are regular conversion projects where capex is
capitalised within vessels under conversion, while the P-63 project is accounted
for as a fixed-price construction contract. Under the latter format, revenue is
recognised in accordance with the "percentage of completion" (POC) accounting
method. BW Offshore is receiving milestone payments from Petrobras for the P-63
throughout the project period.
BW Offshore is also performing project management and engineering services to
OSX for the FPSO OSX-1. Revenue is booked on a monthly basis.
BW Offshore completed on 8 December 2010 the sale of all its shares in
subsidiary APL (Advanced Production & Loading) Plc to National Oilwell Varco.
The sales price has been agreed at USD 531.5 million, subject to net working
capital adjustments.
Dividend policy
BW Offshore has as an objective to generate competitive long-term total
shareholder returns. This return will be achieved through sustainable growth and
stable dividend payments. BW Offshore targets a payout ratio of 20-25 per cent
of EBITDA over the business cycle. The payments of dividends will be evaluated
and paid on a quarterly basis.
The dividend policy will be proposed by the Board of Directors to the Annual
General Meeting (AGM) scheduled for May 2011.
Outlook
The outlook for the energy market in general and BW Offshore's position in
particular remains strong. Based on BW Offshore's diversification, presence,
financial scale and competence, the Company will play a significant role in the
FPSO space and continue to grow its business. BW Offshore is currently pursuing
several prospective projects with expected award in 2011 and beyond, and expects
a continued increase in activity level both in the short and long term.
The operating cash flow from the operating vessels is secure and based on long
term contracts with large national oil companies and robust independent oil
companies. BW Offshore is fully funded for all ongoing projects and additional
financial capacity is available for new growth opportunities.
The consolidation of the Prosafe Production fleet will contribute to significant
EBITDA growth in 2011. The run rate EBITDA will also grow significantly with the
start up of the three FPSOs BW Pioneer, BW Athena and BW Joko Tole.
The integration of Prosafe Production is going well, and BW Offshore has
identified synergies in several areas. Initial cost synergies will be realized
from Q1 2011, while the full effect is expected from 2012 and beyond.
BW Offshore is committed to increasing shareholder returns, and will only pursue
projects that meet the company's targeted returns. The revised dividend policy
is an important milestone for the company's objective to achieve class leading
shareholder returns based on share price performance and dividend payments.
For further information, please contact:
Knut R. Sæthre, CFO, +47 9111 7876 (Media)
Kristian Flaten, VP Finance & Investor Relations, +47 9509 2322
(Analysts/investors)
About BW Offshore:
BW Offshore is a leading global provider of floating production services to the
oil and gas industry. With the acquisition of Prosafe Production in 2010, the
company has become the world's second largest contractor with a fleet of 16
FPSOs and 2 FSOs represented in all major oil regions world-wide. BW Offshore
has an excellent track record on project execution and operations, as well as a
robust balance sheet and strong financial capabilities. In over 25 years of
production, BW Offshore has successfully executed more than 30 FPSO and FSO
projects. The company is listed on the Oslo Stock Exchange. Further information
is also available onwww.bwoffshore.com
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Q4 2010 report:
http://hugin.info/136844/R/1491173/426826.pdf
Q4 2010 presentation:
http://hugin.info/136844/R/1491173/426827.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: BW Offshore via Thomson Reuters ONE
[HUG#1491173]
Unternehmensinformation / Kurzprofil:
Datum: 22.02.2011 - 07:31 Uhr
Sprache: Deutsch
News-ID 51759
Anzahl Zeichen: 14184
contact information:
Town:
Oslo
Kategorie:
Business News
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"Q4 2010 and preliminary results 2010"
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