Financial results 4Q Oslo, 15 February 2017

Transcription

1 Financial results 4Q 2016 Oslo, 15 February 2017

2 AGENDA FINANCIAL RESULTS 4Q 2016 MARKET OPERATIONS SUMMARY

3 Income Statement Key Figures (USD mill) 4Q Q 2016 Change Operating revenues 152,5 210,4 (57,9) Recharged income 4,3 3,2 1,1 Total revenues 156,8 213,6 (56,8) Operating costs (55,5) (91,4) 35,9 Recharged expenses (4,1) (3,1) (1,0) Total operating expenses (59,6) (94,5) 34,9 Oper. result before depr. (EBITDA) 97,2 119,1 (21,9) Depreciation (65,2) (70,2) 5,0 Impairment (10,5) (61,3) 50,8 Operating result (EBIT) 21,5 (12,4) 33,9 Net financial items (2,9) (17,3) 14,4 Result before tax 18,6 (29,7) 48,3 Estimated tax (8,9) (4,2) (4,7) Net result 9,7 (33,9) 43,6

4 EBITDA Comparison 4Q 2016 vs. 3Q 2016

5 Financial Items Breakdown (USD mill) 4Q Q 2016 Change Interest income 0,8 0,4 0,4 Gains on financial instruments 1,2 3,4 (2,2) Financial income 2,0 3,8 (1,8) Interest expenses (8,8) (8,3) (0,5) Losses on financial instruments (1,9) (3,5) 1,6 Other financial expenses (4,0) (2,2) (1,8) Financial expenses (14,7) (14,0) (0,7) Net foreign currency gain 9,8 (7,1) 16,9 Net financial items (2,9) (17,3) 14,4

6 Offshore Drilling Segment (USD mill) 4Q Q 2016 Change Operating revenues 149,9 209,4 (59,5) Recharged income 4,3 3,2 1,1 Total revenues 154,2 212,6 (58,4) Operating costs (51,9) (88,8) 36,9 Recharged expenses (4,1) (3,1) (1,0) Total operating expenses (56,0) (91,9) 35,9 Oper. result before depr. (EBITDA) 98,2 120,7 (22,5) Depreciation (64,8) (69,7) 4,9 Impairment (10,5) (61,3) 50,8 Operating result (EBIT) 22,9 (10,3) 33,2

7 Engineering & Fabrication Segment (USD mill) 4Q Q 2016 Change Operating revenues (external) 2,6 1,0 1,6 Inter-segment revenues 0,2 0,6 (0,4) Total operating revenues 2,8 1,6 1,2 Operating costs (3,8) (3,2) (0,6) Oper. result before depr. (EBITDA) (1,0) (1,6) 0,6 Depreciation (0,4) (0,5) 0,1 Operating result (EBIT) (1,4) (2,1) 0,7

8 Consolidated Balance Sheet (USD mill) 31 Dec Sep 2016 Change Property, plant & equipment 1 361, ,3 (74,3) Other non-current assets 17,3 20,2 (2,9) Total non-current assets 1 378, ,5 (77,2) Other current assets 227,8 266,1 (38,3) Cash and cash equivalents 290,4 391,0 (100,6) Total current assets 518,2 657,1 (138,9) Total assets 1 896, ,6 (216,1) Equity 853,2 853,5 (0,3) Non-current interest bearing debt 879,6 887,0 (7,4) Other non-current liabilities 90,9 101,3 (10,4) Total non-current liabilities 970,5 988,3 (17,8) Current interest bearing debt - 190,9 (190,9) Other current liabilities 72,8 79,9 (7,1) Total current liabilities 72,8 270,8 (198,0) Total equity and liabilities 1 896, ,6 (216,1)

9 Consolidated Cash Flow (USD mill) 4Q Q 2016 Change Profit before income taxes 18,6 (29,7) 48,3 Depreciation and impairment 75,7 131,5 (55,8) Interest expense 10,4 9,6 0,8 Changes in working capital 18,2 15,5 2,7 Unrealized loss/(gain) financial instruments (10,2) 2,0 (12,2) Cash generated from operations 112,7 128,9 (16,2) Interest paid (8,5) (8,5) - Taxes paid (6,7) (7,7) 1,0 Net cash flow from operating activities 97,5 112,7 (15,2) Net investment in fixed assets (3,3) (1,9) (1,4) Bollsta settlement - 176,4 (176,4) Cash flow used in investment activities (3,3) 174,5 (176,4) Proceeds from interest bearing loans - 65,0 (65,0) Repayments of interest bearing loans (190,9) (95,5) (95,4) Cash flow used in financing activities (190,9) (30,5) (160,4) Foreign currency (3,9) 1,4 (5,3) Net change in cash and cash equivalents (96,7) 256,7 (352,0) Cash at beginning of period 391,0 132,9 258,1 Cash at end of period 290,4 391,0 (99,2)

10 Offshore drilling EBITDA and margin

11 Fleet status RIG DESIGN W DEPTH LOCATION CLIENT CONTRACT STATUS DAY RATE (USD) NEXT CRS ULTRA- / DEEPWATER UNITS Bolette Dolphin DS/ Gusto P10' Colombia Anadarko May July / Q 2019 Blackford Dolphin SS / Aker H UK Chevron February Q 2019 Belford Dolphin DS / LMG Marin Malaysia Idle MID WATER FLOATERS NORWAY Bideford Dolphin SS / Aker H Norway Statoil February-March Q 2019 Borgland Dolphin SS / Aker H Norway Idle 1Q 2020 Bredford Dolphin SS / Aker H Norway Idle 2Q 2017 MID WATER FLOATERS UK Byford Dolphin SS / Aker H Norway Idle 2Q 2020 Borgsten Dolphin Tender support / AH-3 UK Idle 1Q 2018 Borgholm Dolphin Accomodation / AH-3 UK Idle 4Q 2017

12 Preparing and acting in the challenging market Waiver request approved from lenders Minimum market value covenant waiver obtained from banks in December 2016 Net debt/ebitda and EBITDA/net interest expenses covenant waiver obtained from banks and bondholders in FOE05 Waiver duration until 30 June 2018 Market values of the fleet decreased sharply during 2016 Rationale Potential breach of the two EBITDA related covenants during 2017 The waiver provides the company operational and financial flexibility and preserves optionality for all stakeholders Repayments completed Prepayment of two instalments of USD 95.5 million each paid in December 2016 No instalments during 2017 Partial redemption of FOE05 of NOK 75 million completed early February 2017 High focus on cost-cutting and cash discipline Fred. Olsen Energy has prepared its organisation for a market downturn since 2014 Successful cost reductions both onshore and offshore Lay-up costs significantly reduced Limited committed investments

13 FINANCIAL RESULTS MARKET OPERATIONS SUMMARY

14 Global market floating units Overall, there has been an increase in requests and tender activity Main indicators point to improved market conditions, however the strength and the pace of recovery still remains uncertain Cold stacking and some scrapping due to overcapacity continue to take place The decrease in E&P spending seems to level off and E&P companies directing spending to short cycle, higher return activity Earlier recovery of the mid-water is expected to materialize as compared to the ultra-deepwater

15 Norwegian floater market The utilization of the rig fleet in Norway is currently approaching an all time low Increased number of requests and tenders for 2017 and 2018, although predominantly for shorter term work The number of awarded contracts has increased Several new projects and in-field projects are being prepared for sanctioning in 2017 /18 and beyond Name West Navigator COSLPioneer Transocean Searcher Songa Trym Bredford Dolphin Polar Pioneer COSLInnovator West Venture West Hercules West Alpha Deepsea Metro II Songa Dee Borgland Dolphin Songa Delta Stena Don Bideford Dolphin Transocean Spitsbergen Island Innovator Deepsea Bergen Transocean Arctic Scarabeo 5 Leiv Eiriksson Deepsea Stavanger Scarabeo 8 COSLPromoter Deepsea Atlantic Songa Equinox Songa Endurance Songa Encourage Songa Enabler Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Contract Option Yard/under construction As per February 2017 Source: DNB and the Company

16 Average dayrates Norway

17 UK floater market Similar picture as Norway with a high number of inactive rigs However, requests and tender activity has continued to increase during the last quarters A moderate improvement in drilling activity is expected due to increased number of new requests for 2017 and 2018 The low project and maintenance activity continues to dominate the accommodation segment Name Ocean Vanguard Ocean Nomad Ocean Princess Transocean Prospect WilHunter Sertao Sedco 711 Sedco 714 Paragon MSS1 Byford Dolphin Blackford Dolphin Ocean Guardian Paul B. Loyd, Jr. Stena Spey West Phoenix Stena IceMAX Sedco 712 Ocean Valiant Ocean Patriot WilPhoenix Transocean Leader Deepsea Aberdeen Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Contract Option Yard/under construction As per February 2017 Source: DNB and the Company

18 Average dayrates UK

19 Dayrates- worldwide

20 FINANCIAL RESULTS MARKET OPERATIONS SUMMARY

21 Our approach to the market Aggressively pursuing new contract opportunities Alternatively preservation of the equipment and the units Class certificates prolonged survey arrangement Keeping rigs warm ready for operation Commercial potential/value Risk profile Strategic fit for each unit Protect the asset value Minimize reactivation time and cost Keeping competence in the lay-up teams Function and system testing Approved regime for preservation of class certificates Delay main class renewal survey and associated CAPEX

22 Canada Mexico USA Guatemala El Salvador Belize Honduras Costa Rica Nicaragua Panama Ecuador Cuba Jamaica Haiti Columbia Peru Chile Dominican Republic Venezuela Puerto Rico Bolivia Argentina Trinidad Guyana Paraguay Surinam Brazil Uruguay French- Guayana Greenland Gambia Guinea- Bissau Iceland West Sahara Senegal Sierra Leone Portugal Mauretania Guinea Liberia Ireland Marocco Spain Ivory Coast United Kingdom Mali Burkina Faso Ghana Togo France Algeria Belgium Benin Netherlands Norway Luxemburg Switzerland Nigeria Denmark Niger Germany Cameroon Gabun Italy Tunesia Croatia Sweden Czech Republic Austria Slovenia Montenegro Congo Namibia Libya Angola Poland Slovakia Hungaria Chad Serbia Central Africa Lithuania Bosnia- Herzegovina Albania Greece Zaire Latvia Macedonia Romania Botswana Finnland Bulgaria Estonia Sambia South Africa Belarus Moldawia Egypt Sudan Zimbabwe Lesotho Ukraine Cyprus Rwanda Burundi Lebanon Israel Uganda Swaziland Turkey Tanzania Malawi Jordan Kenya Syria Eritrea Ethiopia Mozambique Georgia Armenia Iraq Dschibuti Saudi-Arabia Azerbaijan Kuwait Yemen Somalia Madagascar Qatar Iran Oman Turkmenistan United Arab Emirates Usbekistan Afghanistan Kazakhstan Pakistan Tadschikistan Kirgistan India Nepal Sri Lanka Bangladesh Bhutan Russia Myanmar Thailand Mongolia China Laos Cambodia Malaysia Vietnam Brunei Indonesia Taiwan South Korea Philippines North Korea Australia Japan Papua -New Guinea New Zealand Fred. Olsen Energy Operating worldwide Byford Dolphin Bideford Dolphin Borgsten Dolphin Borgland Dolphin Borgholm Dolphin Bredford Dolphin Blackford Dolphin Bolette Dolphin Belford Dolphin

23 Contract overview Unit Bolette Belford 1) Blackford 2016 Anadarko Chevron Bideford Statoil 2) Borgland RMN Cons. Bredford Byford BP Borgsten Total 3) Borgholm 1) Terminated for convenience 2) Suspended 3) Termination right exercised with a termination fee of USD 22 million Total backlog approx. USD 260 million

24 Ultra deepwater Bolette Dolphin Ultra deepwater drillship delivered in 2014 Operates under a four-year contract with Anadarko estimated to expire in July 2018 Is currently operating offshore Colombia after completing the drilling program offshore the Ivory Coast Belford Dolphin The unit is preserved and maintained, located outside Labuan, Malaysia Belford Dolphin Marketed for contract possibilities worldwide Completed the five-year class renewal survey at the Keppel yard in October 2015

25 Deepwater / midwater- UK Blackford Dolphin Continued the 572 days contract with Chevron offshore UK during the quarter The contract was extended with approximately one month until end of February 2017 The unit had 15 days downtime in October Completed its class renewal survey in June 2014 Byford Dolphin Completed the contract with BP Exploration UK end of October 2016 The unit is preserved and maintained in Lyngdal, Norway, ready for operations The unit completed its class renewal survey July 2015

26 Midwater - Norway Bideford Dolphin Completed the three-year contract with Statoil early February A contract extension of approximately one month was entered into, with estimated completion by mid March Completed its class renewal survey July 2014 Borgland Dolphin Completed the 18 well drilling contract with RMN in September 2016 The unit is preserved and maintained in Lyngdal, Norway, ready Belford operations Dolphin The unit completed its class renewal survey February 2015

27 Midwater Norway / UK Bredford Dolphin The unit is cold stacked at Kvinesdal, Norway The class renewal survey was completed August 2012 A renewal of the class certificates will not be carried out in 2017 in the current market conditions Borgholm Dolphin Accommodation unit compliant with UK regulations The unit is cold stacked and located at the quay side of Harland & Wolff Class renewal survey was completed March 2013 Borgsten Dolphin The unit was converted to Tender Support Vessel in 2013 Total exercised its right to terminate the contract from October 2016, a termination fee of USD 22.1 million was booked in the quarter The unit is cold stacked in Invergordon, Scotland

28 Harland & Wolff The activity at the yard has been limited during the fourth quarter and low for the year 2016 in general Secured a jacket contract as subcontractor to Lamprell for deliveries in 2017/2018. This will be an important contribution for the 2017 revenue It is expected that 2017 will be a challenging year overall for the shipyard

29 Summary Financial Revenues were USD 157 million EBITDA was USD 97 million Profit after tax was USD 10 million Impairment of Borgsten Dolphin amounted to USD 11 million Contract backlog amounting to approximately USD 260 million Market Bideford Dolphin extension of one month Blackford Dolphin extension of current contract of approximately one month Operational Byford Dolphin in lay-up in Lyngdal, Norway, from end of October 2016 Borgsten Dolphin cold stacked in Invergordon, Scotland, from October 2016

30 Q&A