MILLENNIUM OFFSHORE SERVICES SUPERHOLDINGS LLC, PART OF THE SEAFOX GROUP, REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS

Transcription

1 FOR IMMEDIATE RELEASE MILLENNIUM OFFSHORE SERVICES SUPERHOLDINGS LLC, PART OF THE SEAFOX GROUP, REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS Revenue increased 2.2% to $39.4 million, EBITDA decreased 21.7% to $21.1 million, and net income increased 101.3% to $27.4 million year-over-year, respectively Ajman, United Arab Emirates May 28, 2015 Millennium Offshore Services Superholdings, LLC, part of the Seafox Group, (the Company or Seafox ), today reported its first quarter 2015 financial results for the period ended March 31, First Quarter 2015 Financial Highlights Revenue for the first quarter 2015 was $39.4 million compared to $38.5 million for the same period a year ago. The 2.2% increase in revenue was primarily due to primarily due to the addition of our seventh ASV, Seafox Frontier, into active service and first contract during July 2014 and the inclusion of the results from Seafox 1, 2, 4 & 7 ASVs from November 7, The increase in revenues were partially offset by the impact of lower fleet utilization of 57.9% in the quarter ended March 31, 2015, due to shipyard works performed during the period, compared with 100% utilization in prior year. Fleet utilization was 57.9% for the first quarter 2015, compared to 100% for the first quarter, a year ago due to shipyard works performed during the quarter. EBITDA for the first quarter 2015 decreased 21.7% to $21.1 million (EBITDA margin of 53.5%), compared to $26.9 million (EBITDA margin of 69.8%) for the same period a year ago due to lower utilization during shipyard works on a number of ASVs. Net income for the first quarter 2015 was $27.4 million compared to net income of $13.6 million for same period of 2014, an increase of 101.3% year-over-year. The increase in net income was primarily due to the impact of a $26.1 million exchange gain in the quarter on the Euro denominated Senior Secured Term Loan following the currency movement between Euros and. Direct costs for the first quarter of 2015 were $22.9 million compared to $14.2 million for the first quarter of The 61.4% increase in direct costs were primarily driven by the increased staff and crewing costs and depreciation resulting from the addition of the Seafox Frontier and Seafox 1, 2, 4 and 7 compared with the prior year period where we had an active fleet of six ASVs compared with 11 ASVs in Amortized mobilization and demobilization costs were also higher than the prior year period during the quarter ended March 31, Gross profit for the first quarter of 2015 was $16.6 million compared to $24.4 million for the same period of Gross profit margin for the first quarter of 2015 was 42% compared to 63.3% in the prior year, primarily due to the impact of lower utilization. General and administrative expenses were $3.7 million for the first quarter of 2015, compared to $2.7 million for the prior period in The increase in expenses were primarily due to the combination between Seafox and MOS on November 7, 2014 and the inclusion of the North Sea business, Netherlands office and corporate costs within general and administrative expenses compared with prior year period. At March 31, 2015, backlog was $443.7 million including current fixed term contracts, customer extension options and recent contract additions across the fleet of ASVs. Millennium Offshore Service Superholdings LLC - Page 1 of 7

2 Cash and cash equivalents, excluding cash held on fixed deposit against performance bonds, at March 31, 2015 totaled $34.5 million, up significantly from $24.7 million as of March 31, Martin Adler, Chief Executive Officer of Seafox Group, stated that, Revenues increased in the first quarter as a result of the addition of the Seafox Frontier and integration of Seafox 1, 2, 4 and 7, compared with prior year period. Lower fleet utilization of 57.9% was a result of significant investments we have made during the first quarter which included periods where the Seafox Ahmed, Deema, Marinia, Trident One, Burj and Seafox 4 were undergoing scheduled capital works and surveys. We expect to return to improved utilization levels in the second half of 2015 when the planned shipyard and survey work are completed. As importantly, we believe the investments we are making in our fleet during 2015 will enable us to continue to differentiate ourselves and build upon our leadership position by allowing us to service our clients requirements and needs at the highest level of quality and safety they have come to expect from us. Conference Call and Webcast In conjunction with the earnings results press release, Seafox senior management will host a conference call on Thursday, May 28, 2015 at 9:00 am (Eastern Time) / 2:00 pm (London Time) / 5:00 pm (UAE Time) to discuss the first quarter 2015 financial results. Presentation slides will be available to accompany the conference call webcast. Participants can access the webcast and slide presentation on the Financial Events webpage located in the Investor Relations section of the Company s website at Interested parties may participate in the conference call by dialing the numbers provided below: United States Participants: 1 (877) United Kingdom Participants: International Participants: +1 (201) The conference call will also be simultaneously broadcast live over the Internet via webcast. Please allow extra time prior to the call to visit the website and download any streaming media software that might be required to listen to the webcast. An archive of the webcast replay will be made available for a period of time online in the Investor Relations section of the Company s website at after the conclusion of the live call. About Seafox Seafox is a first choice offshore jack-up company, providing services to support the energy industry around the world. The organization is the result of the combination of Seafox Group and Millennium Offshore Services in November Seafox owns and exclusively manages twelve self-elevating jack-up units. Her multinational long term customers benefit from experience in accommodation & crane support, well testing & work over, transport & installation and decommissioning services. Furthermore Seafox offers temporary accommodation units for offshore locations and on board vessels. The company employs over 600 professional experts on- and off shore. For additional information please visit Use of Non-IFRS Financial Measures In the press release the Company presents certain financial measures and ratios, including EBITDA and other operating data, including backlog and fleet utilization rate, that are not presented in accordance with IFRS and which are not IFRS measures. EBITDA is defined as net profit for the applicable period before finance costs, income tax expense, unrealized gain/loss on fair valuation of interest rate swap, equity settled C-grant expense, depreciation of property and equipment, amortization and other income / expense related to realized and unrealized exchange gain / loss, gain / loss on sale of assets and deposit income. EBITDA margin is defined as EBITDA divided by revenue. The Company presents EBITDA because it believes that (i) it is a useful indicator of the Company s ability to incur and service the Company s indebtedness, (ii) it and similar measures are widely used in the Company s industry as useful indicators or supplemental measures of operating performance and (iii) it can assist certain investors, security analysts and other interested parties in evaluating the Company s operations and performance. Millennium Offshore Service Superholdings LLC - Page 2 of 7

3 EBITDA is not a recognized term under IFRS. Accordingly, it should not be used as indicator of, or alternative to, revenue, operating profit or operating profit margin or other comparable IFRS metrics, as a measure of operating performance, or of cash flow from operating activities as a measure of liquidity. The Company s presentation of EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results reported under IFRS. In particular, you should not consider EBITDA as an alternative to: (a) operating profit or profit for the period (as determined in accordance with IFRS) as a measure of our operating performance; (b) cash flows from operating, investing and financing activities as a measure of the Company s ability to meet its cash needs; or (c) any other measure of performance under generally accepted accounting principles. The limitations of EBITDA as an analytical tool include: (i) EBITDA and does not reflect the Company s cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) EBITDA does not reflect changes in, or cash requirements for the Company s working capital needs; (iii) EBITDA does not reflect the significant interest expense, or the cash requirements necessary, to service interest or principal payments on the Company s debts; (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often need to be replaced in the future and EBITDA does not reflect any cash requirements that would be required for such replacements; and (v) some of the exceptional items that the Company eliminates in calculating EBITDA reflect cash payments that were made, or will be made in the future. Because the Company s definition of EBITDA may differ from those used by other companies and industries, the Company s presentation of this metrics may not be comparable to other similarly titled measures used by other companies. Backlog and fleet utilization rate are not measurements of financial performance under IFRS and should not be considered as alternatives to other indicators of our operating performance, cash flows or any other measure of performance derived in accordance with IFRS. The Company s management believe that the presentation of backlog and fleet utilization rate is helpful to investors as a measure of the Company s historical operating performance and ability to service debt, and also, in the case of backlog, as an indication of the Company s future revenue. Forward Looking Statements This press release may contain forward looking statements within the meaning of the U.S. federal securities laws regarding future financial performance, results, events and other statements that are not historical facts. The words believe, anticipate, plan, expect, project, estimate, predict, intend, target, assume, may, could, will and similar expressions are intended to identify such forward looking statements. Such statements are made on the basis of assumptions and expectations that the Company believes to be reasonable as of the date of this press release, but may prove to be erroneous. Such forward looking statements involve known and unknown risks and uncertainties and other factors which may cause the Company s actual results, business, financial condition, results of operations, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward looking statements. Such factors include, among others, those more fully described in Risk Factors and elsewhere in the Company s annual report for the year ended December 31, You are therefore cautioned against relying on any of these forward looking statements. Except as required by law or regulation, the Company assumes no obligation to update such forward looking statements or to update the reasons for which actual results could differ materially from those anticipated in such forward looking statements. For more information, please contact: Investors Ms. Trúc Nguyen, Vice President Grayling Investor Relations Telephone: +1 (646) truc.nguyen@grayling.com Millennium Offshore Service Superholdings LLC - Page 3 of 7

4 Condensed consolidated statement of comprehensive income (unaudited) for the three months period ended 31 March 2015 Three months period ended 31 March Revenue 39,406,458 38,546,820 Direct costs (22,852,926) (14,157,972) Gross profit 16,553,532 24,388,848 General and administrative expenses (3,690,574) (2,735,324) Unrealised loss on fair valuation of interest rate swap (90,602) - Finance costs: - Secured senior notes (5,838,643) (5,768,938) - Senior secured term loan (3,288,614) - - Other (90,480) (162,500) Foreign currency exchange gain/(loss) 26,107,673 (34,221) Other income 11,549 9,750 Profit before tax 29,673,841 15,697,615 Income tax expense (2,317,671) (2,110,227) Profit for the period 27,356,170 13,587,388 Other comprehensive loss: Items that may be reclassified subsequently to profit or loss: Exchange loss on translating foreign operations (28,086,849) - Total comprehensive (loss)/income for the period (730,679) 13,587,388 Millennium Offshore Service Superholdings LLC - Page 4 of 7

5 Condensed consolidated statement of financial position At 31 March March 31 December (unaudited) (audited) ASSETS Non-current assets Property and equipment 519,611, ,319,399 Intangible assets 3,056,903 3,486,624 Goodwill 2,286,681 2,590,878 Total non-current assets 524,954, ,396,901 Current assets Inventories 10,170,367 10,051,793 Due from related parties 1,406, ,959 Trade and other receivables 31,639,841 35,368,758 Bank balances and cash 36,280,808 65,739,684 Total current assets 79,497, ,542,194 Total assets 604,452, ,939,095 EQUITY AND LIABILITIES Equity Capital contribution 40,866,331 40,866,331 Foreign currency translation reserve (34,990,056) (6,903,207) Retained earnings 141,645, ,289,581 Total equity 147,522, ,252,705 Non-current liabilities Provision for employees end of service indemnity 689, ,359 Senior secured notes 217,455, ,887,293 Bank borrowings 145,295, ,743,239 Derivative financial instrument 182,767 92,165 Trade and other payables 332,238 1,931,214 Total non-current liabilities 363,955, ,277,270 Current liabilities Bank borrowings 38,356,355 43,839,505 Due to related parties 3,288,816 3,775,883 Trade and other payables 51,330,381 55,793,732 Total current liabilities 92,975, ,409,120 Total liabilities 456,930, ,686,390 Total equity and liabilities 604,452, ,939,095 Millennium Offshore Service Superholdings LLC - Page 5 of 7

6 Condensed consolidated statement of cash flows (unaudited) for the three months period ended 31 March 2015 Three months period ended 31 March Cash flows from operating activities Profit for the period after tax 27,356,170 13,587,388 Adjustments for: Depreciation of property and equipment 8,185,218 5,268,775 Amortization of intangible assets 18,844 - Unrealised loss on fair valuation of interest rate swap 90,602 - Amortisation of issue costs 1,257, ,350 Foreign currency exchange gain on term loan (25,639,000) - Finance costs 7,960,295 5,433,088 Income tax expenses 2,317,671 2,110,227 Provision for employees end of service benefits 66, ,255 Operating cash flows before changes in operating assets and liabilities 21,613,399 27,040,083 Increase in inventories (118,574) (82,729) Increase in due from related parties (1,024,839) - Decrease/(increase) in trade and other receivables 3,728,917 (679,510) Decrease in due to related parties (487,067) - Decrease in trade and other payables (1,463,962) (1,803,974) Net cash generated from operating activities 22,247,874 24,473,870 Finance costs paid (13,377,207) (10,837,500) Income tax paid (1,499,124) (3,630,485) Net cash flows generated from operating activities 7,371,543 10,005,885 Cash flows from investing activities Purchase of property and equipment (23,795,171) (16,807,106) Increase in fixed deposits (341,623) - Net cash used in investing activities (24,136,794) (16,807,106) Cash flows from financing activities Term loans repaid (10,981,458) - Net cash used in financing activities (10,981,458) - Net decrease in cash and cash equivalents (27,746,709) (6,801,221) Cash and cash equivalents at the beginning of the period 64,313,144 31,512,900 Effects of exchange rate changes on the balances of cash held in foreign currency (2,053,790) - Cash and cash equivalents at the end of the period (Note 15) 34,512,645 24,711,679 Millennium Offshore Service Superholdings LLC - Page 6 of 7

7 Reconciliation of EBITDA to net profit on a consolidated basis For the quarters ended March 31, (U.S. dollars in millions) Net profit Depreciation (a) Finance costs Income tax expense Acquisition transaction fees Foreign currency exchange (gain) / loss 0.0 (26.1) Other income/expense (b)... (0.0) (0.0) EBITDA (a) (b) Includes depreciation of property and equipment recognized in Direct Costs as well as deprecation of certain property and equipment included in our General and Administrative Expenses. Other income and expense related to realized and unrealized gain / loss on interest swap, gain / loss on sale of assets and deposit income. ### Millennium Offshore Service Superholdings LLC - Page 7 of 7