Q3 2009: Interim consolidated financial information
(Thomson Reuters ONE) - Adjusted EBITDA of USD 45.4 million in third quarter, beforetransactions relating to associatesFPSO BW Pioneer conversion progressing as plannedSigned Letter of Intent for Papa Terra FPSO for PetrobrasBW Offshore hosts a conference call of the financial results at 13:00(CET). The results will be presented by CEO Carl K. Arnet and CFOKnut R.Sæthre, followed by a Q&A session. Please see separate noticefor dial-in numbers and replay alternatives.(Figures in brackets refer to corresponding figures for 2008)Operating revenue amounted to USD 116.6 million (USD 114.8 million).The FPSO segment experienced an increase in operating revenue whichwas partly offset by a decrease in operating revenue in theTechnology segment. The increase in operating revenue for the FPSOsegment was mainly due to the positive contribution from the FPSO BWCidade de São Vicente, the FPSO Y??UM K`AK`NÿAB and the finalsettlement from Equator Exploration for the terminated FPSO contractin 2007.Operating expenses in the third quarter amounted to USD 71.2 million(USD 95.8 million), a decrease resulting mainly from lower activitylevel in the Technology segment. The claim from Aker MarineContractors, received in 2007, has been settled in the third quarterand is reflected in the FPSO segment operating expense.EBITDA was USD 47.7 million (USD -51.4 million) in the third quarter.Adjusted EBITDA (EBITDA before share of profit related to associatesand before write down and gain on shares) was USD 45.4 million (USD19.0 million). Changes in market values of currency derivativeinstruments related to operating cash flows are included in theEBITDA. For the third quarter this amounted to a gain of USD 4.8million (USD 0.0 million).Share of profit / loss (-) of associates was USD 2.3 million (USD-1.6 million) in the third quarter and relates to the investments inProsafe Production Limited (PROD) and Nexus Floating Production Ltd(Nexus). Share of profit from PROD amounted to USD 2.3 million. Asthe book value of Nexus is USD 0.0 million, losses no longer reducethe investment further as there are no further obligations to be met;consequently the share of profit from Nexus is USD 0.0 million in thethird quarter (USD 0.0 million). At 30 September 2009, the Companyowned 23.9% of the shares in PROD and 49.7% of the shares in Nexus.Net financial items for the third quarter were USD -18.6 million (USD-21.7 million). Interest expense was USD 6.1 million (USD 9.2million) in the third quarter. The decrease in interest expenses ismainly a result of reduced interest rates. Interest income was USD2.7 million (USD 6.3 million). Net financial items include a decreasein fair value of USD 13.9 million (USD -19.7 million) on interestderivative contracts.Result before tax was USD 8.3 million in the third quarter (USD-251.4 million). Income tax expense amounted to USD 1.8 million (USD4.1 million) in the third quarter.At 30 September 2009, total assets amounted to USD 2,338.0 million(USD 2,445.8 million), total equity amounted to USD 927.9 million(USD 1,233.2 million). The decrease in total assets and equity isprimarily a result of impairment charges in 2008 offset by increasedbook value of conversion projects.Net cash inflow from operating activities was USD 72.4 million (USD34.2 million). Net cash outflow from investing activities was USD84.5 million (USD 104.3 million). Cash flow from investing activitiesrelates mainly to the conversion projects in the FPSO segment. Netcash inflow from financing activities was USD 10.8 million (cashoutflow USD 63.7 million), arising from a net drawdown of USD 15.0million (USD 0.0 million) on the loan facility offset by interestpayments.At 30 September 2009, the Company held USD 42.4 million (USD 67.7million) in cash and deposits. Currently, the Company has drawn downUSD 887.8 million on the USD 1,500 million credit facility. Net debtamounted to USD 870.0 million at 30 September 2009 (USD 445.3million).Floating ProductionRevenues in the third quarter were USD 65.2 million (USD 48.2million). EBITDA was USD 41.3 million (USD 7.7 million). Cash flowfrom operating activities in the third quarter was USD 57.8 million(USD 18.0 million).The oil process uptime was 100.0% in the third quarter 2009.The FPSO BW Carmen has during the third quarter effectively completeda short term contract with Shell. The FPSO supported a pipelinecleaning operation for a decommissioning project in the UK sector ofthe Southern North Sea.The FPSO YÿUM K`AK`NÿAB had a stable performance during the thirdquarter.The FPSO BW Cidade de São Vicente is operating successfully on theTupi field offshore Brazil. The FPSO received 95% stand by rateduring part of the third quarter due to subsea problems experiencedby Petrobras. The FPSO has resumed operation and has received fullday rates from the beginning of September.The LPG FPSO Berge Okoloba Toru was sold during third quarter 2009.All costs related to the sale have been booked during third quarter,resulting in a net loss related to the sale of the FPSO of USD 2.2million.The ongoing conversion of the FPSO BW Pioneer for the PetrobrasChinook & Cascade field is continuing in line with expectations. Morethan 2000 people are working daily on the FPSO at the yard and sailaway from Singapore is planned shortly.The Papa Terra Joint Venture, consisting of Petrobras (operator) andChevron, has concluded the contracting and negotiation process withthe consortium of BW Offshore and the Brazilian industrial group QUIPfor the FPSO P-63 for the Papa Terra field. Letter of Intent wassigned 7 October 2009, while contract signing of the project willoccur at a later date.BW Offshore has during the third quarter 2009 received payments fromEquator Exploration related to the termination of the FPSO BW Cidadede São Vicente (former BW Peace) for the Bilabri field.The claim from Aker Marine Contractors related to the installationcampaign of the FPSO YÿUM K`AK`NÿAB has also been settled duringthird quarter. The outcome of the claim is reflected in the thirdquarter operating expenses.TechnologyThe revenues (from external customers) in the third quarter wereUSD 51.4 million (USD 66.6 million) with EBITDA of USD 6.4 million(USD -59.1 million). This resulted in an EBITDA margin of 9.3%(9.5%). Cash flow from operating activities in the third quarter wasUSD 14.6 million (USD 16.2 million).The projects Chinook & Cascade, Pazflor for Total and Peregrino forMaersk, are progressing according to schedule. As for the Neptuneproject, all systems have been installed and delivered during thethird quarter.During the third quarter 2009, APL initiated a process to adjust thecapacity of its organization in line with market demand. The processis now completed and full provisions for all costs have been includedin the third quarter.OutlookThe financial market stabilization efforts undertaken by governmentsaround the world have slowly eased the project financing difficultiesexperienced at the beginning of the year. A steady increase in oilprices resulted in improved prospects for new exploration of oil andgas fields internationally going forward. BW Offshore expects apickup in activity levels in the fourth quarter of 2009 and in 2010.The changes to the competitive landscape with fewer competitorspursuing new projects are expected to remain.The Company is fully funded for all ongoing projects. Cash flows fromexisting units are secure and arise from reputable clients.Additional financial capacity is available for new projects if theyshould meet the targeted returns. BW Offshore is of the opinion thatthe long-term fundamentals of the business are sound. Underlyinggrowth in energy demand combined with accelerating depletion ofexisting fields, will necessitate the exploration of new oil and gasfields. The investments in new facilities by international andnational oil companies will lead to continuing demand for theservices provided by BW Offshore.The Company's FPSO BW Pioneer is being completed in Singapore foroperations and will arrive in US waters during the first quarter2010. This vessel will contribute to an increased EBITDA for theFloating Production segment in 2010 and onwards.The Technology segment, although affected by the short term reductionin E&P activity, is seeing improved activity again as E&P activity ispicking up and anticipated to continue to do so in 2010.Bermuda, 19 November 2009For further information, please contact:Carl K. Arnet, CEO BW Offshore, +65 9630 3290Knut R. Sæthre, CFO BW Offshore, +47 9111 7876BW Offshore is one of the world`s leading FPSO contractors and amarket leader within advanced offshore loading and production systemsto the oil and gas industry. BW Offshore has more than 25 years'experience and has successfully delivered 14 FPSO projects and 50turrets and offshore terminals. BW Offshore's technology division APLhas delivered solutions for production vessels, storage vessels andtankers in a wide range of field developments. Adapting throughcompetence, in-house technology, solid project execution andoperational excellence, BW Offshore ensures that customer needs aremet through versatile solutions for offshore oil and gas projects. BWOffshore has a global network with offices in Europe, Asia Pacific,West Africa and the Americas. BW Offshore has 1,100 employees and islisted on the Oslo Stock Exchange. For more information, please visitwww.bwoffshore.com and www.apl.no.http://hugin.info/136844/R/1356013/329388.pdfhttp://hugin.info/136844/R/1356013/329389.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 19.11.2009 - 07:31 Uhr
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