REPORT PER 1 QUARTER 2009 MASTER MARINE ASA - JANUARY-MARCH

Transcription

1 st REPORT PER 1 QUARTER 2009 MASTER MARINE ASA - JANUARY-MARCH

2 MASTER MARINE ASA REPORT PER 1 st QUARTER 16 June 2009 OPERATIONS The Building of the Service Jacks Service Jack 1 is being modified to be a Jacktel, an accommodation unit with 447 beds capacity, for ConocoPhillips. Converting from a normal classed vessel to Norsok specification, able to work as an integrated part of the Ekofisk Complex, has been and still is a challenge. Some progress has been lost (6 to 8 weeks), but with mitigating actions Master Marine expects the vessel to be delivered from the Drydocks World Graha yard according to the original schedule in Q Service Jack 2 is progressing well and expected to be delivered as planned in Q Contracts In October, the Company entered into a contract with ConocoPhillips for the use of Service Jack 1 as an accommodation unit ( JackTel ) for the Ekofisk field in the Norwegian sector of the North Sea. The contract is for a firm period of 3 years, with 2x12 month additional options for the client. The total contract value is around EUR 265 million for the fixed term period, commencing in the summer The company will be compensated with a fixed day rate which reduces the risk exposure. Service Jack 2 will be delivered according to the original concept as a multipurpose jack-up installation vessel, and was in April 2009 awarded a contract with Scira Offshore Energy Limited, with its 50/50 partners StatoilHydro and Statkraft, for the planning and carrying out of installation of 88 wind turbines and 2 substation modules for the Sheringham Shoal Offshore Wind Farm Project. The contract was awarded to Master Marine after strong competition from other installation contractors, and the award shows Service Jack s superior capacity to install wind turbines. Project engineering work for Service Jack 2 will start 2 nd quarter 2009 and the installation work will commence in the beginning of The contract value is estimated to be EUR 78 million, based on an estimated installation time of 7 months. ORGANIZATION, WORKPLACE ENVIRONMENT AND EMPLOYEES Master Marine continues to build the organization to secure the vessels being delivered according to schedule and to be prepared for the operation of the vessels. At the end of the quarter, the Oslo office consisted of 22 employees and 18 consultants. In addition, the site team in Batam, Indonesia, consisted of 24 people. For the first three months the total sick leave was 5 days or 0.4 %. The Company had no serious accidents resulting in personal injury or material damages. OVERVIEW OF THE RESULTS Net Profit/ Loss Net profit for Q was EUR 1.96 million compared to EUR 4.29 million as of Q1,. The main contributor to the period's result is the statutory evaluation of the derivative element of the convertible bond and other financial items. Balance Sheet Total non-current assets amounted to EUR million at the end of the period, compared to EUR as of 31 December,. Cash and cash equivalents balance was EUR million at the end of the quarter, compared to EUR million as of 31 December,. Total liabilities at the end of the quarter were EUR million, of which EUR million is interest bearing. Comparable figures as of 31 December, are EUR million and EUR million. Cash flow and liquidity Operational cash flow in Q was EUR million. Cash flow from investments was EUR million and cash flow from financing was EUR million. This gave a net decrease in cash and cash equivalents in Q of EUR million. As a result of this the Company had a cash reserve of EUR million at the end of Q The cash reserve is sufficient to finance operations until Q3, This means that the Company is dependent on additional funding to finalize the construction of the two vessels. The Company is evaluating its options and is currently in discussions with debt providers and investors, and the initial responses have been positive. Variance on derivative of the convertible bond The market value of the liability represented by the financial derivative part of the convertible bond decreased to EUR 3.77 million at the end of the quarter, representing a financial income of EUR 3.86 million. The change is mainly related to lower share price and reduced volatility. 2 Master Marine ASA Q1 2009

3 CAPEX AND FINANCING The difficult financial market situation worldwide and the decreasing oil prices have not affected the company s services notably. There is still high demand for the services Master Marine offers, and the market outlook is good. However, the financial turmoil has had a negative effect on the banks ability to offer competitive long term financing which again could have an impact on the company s future financing plans. Master Marine has a positive and constructive dialog with a limited numbers of banks in order to secure the first tranche of the remaining financing, based on the ConocoPhillips contract, and is on track for a credit approval in July When the banks have approved the loan, GIEK and Eksportfinans will initiate their internal processes and Master Marine expects GIEK to give its approval in late August. Accordingly, Master Marine now expects first drawdown of the bank loan to take place in the end of Q3 and Master Marine is currently addressing the consequences of a later first drawdown than earlier expected. The company has also started the process with banks in terms of financing the second vessel based on the contract with StatoilHydro/Statkraft which was signed 1 April SUBSEQUENT EVENTS AND OUTLOOK Kaupthing Bank which owns Arion Custody and subsequently 48.35% of Master Marine was put under administration in October. The company has taken a proactive role in resolving the shareholder issue together with Kaupthing Singer & Friedlander Limited (in administration), Ernst & Young UK and Pareto Securities, which has been mandated the sale of the Kaupthing shareholding. As far as the company has been informed the sale is still following its original schedule and has an expected closing on 1 July Master Marine ASA The board of directors Lysaker, 16 June, 2009 Geir Sandvik Tom Røtjer Rebekka Glasser Herlofsen Chairman of the board Bente Thiis Thornton Jetmund Hanssen Per Johansson CEO Master Marine ASA Q

4 Master Marine ASA Income Statements In EUR 000 Notes 2009 Audited Year ended December 31 Income TOTAL OPERATING INCOME OPERATING EXPENSES: Salary and personnel costs Other operating expenses Depreciation TOTAL OPERATING EXPENSES OPERATING PROFIT/(LOSS) FINANCIAL INCOME AND EXPENCES: Financial incom Financial expenses NET FINANCIAL ITEMS Net result before changes in fair value of derivative of convertible bond (CB) Changes in terms conv. Bond Changes in fair value of derivative of CB PROFIT/(LOSS) BEFORE TAX Income tax expense (benefit) NET PROFIT (LOSS) Earnings per share (EUR) - Basic Earnings per share (EUR) - Diluted 0,03 0,03-0,03-0,03-0,01-0,01 Statement of Comprehensive Income* In EUR Audited Year ended December 31 Net profit this period Other comprehensive income COMPREHENSIVE INCOME * New table included after implementation of revised IAS 1 4 Master Marine ASA Q1 2009

5 Master Marine ASA Balance Sheets In EUR 000 ASSETS Notes 2009 Audited December 31 Non-current assets: Property, plant and equipment Total non-current assets Current assets: Other current assets Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity: Paid in capital: Issued capital Share premium Other paid capital Total paid in capital Other equity: Retained earnings Total other equity Total equity Non-current liabilities: Convertible bond Embedded derivative conv. Bond Other long-term liabilities Total long-term liabilities Current liabilities: Account payable Other current liabilities Total current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES Master Marine ASA Q

6 Master Marine ASA Statement of changes in equity In EUR 000 Share catital Share premium Other paid in capital Retained earnings Total equity Equity as at December 31, Shared issues Warrants to Board members Comprehensive income Equity as at 31 December Comprehensive income in the period Equity as at March Master Marine ASA Q1 2009

7 Master Marine ASA Cash flow Statements In EUR 000 Cash flow from operating activities: Profit/ (loss) after tax Adjustment to reconcile profit/(loss after tax net cash flows): Non-cash items: Depreciation and impairment of property, plant and equipment Financial income Financial expenses Changes in fair value of financial instruments Changes in terms conv. Bond Working capital adjustments: Increase in trade and other receivables Increase in trade and other payables Audited Year ended December Net cash flow from operating activities Cash flow from investing activities: Proceeds from sale of property, plant and equipment cash Interests received Net gain financial investments Net realized agio Net cash flow from investing activities Cash flow from financing activities: Proceeds from issue of shares Net proceeds from borrowings Repayment of borrowings Interest paid Net cash flow from financing activities Net increase/ (decrease) in cash and cash equivalents Net currency translation effect Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Master Marine ASA Q

8 Notes to the interim financial statements 1. Reporting entity Master Marine ASA is a public limited company incorporated in Norway. 2. Statement of compliance These interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with financial statements of Master Marine for the year ended 31 December. These interim financial statements are unaudited. The accounting policies applied by Master Marine in these interim financial statements are the same as those applied in financial statements for the year ended 31 December. The financial statements of Master Marine for the year ended 31 December are available upon request from the Company s registered office at Drammensveien 288, NO-0283 Oslo, Norway or at In preparing these interim financial statements, the significant judgements made by management in applying the accounting policies of the Company and the key sources of estimation uncertainty were the same as those that applied to the financial statements as at and for the period ended 31 December. The company has in addition implemented the revised IAS 1, which require the Company to present comprehensive income. 3. Vessels under construction The construction of the vessels is progressing well, but some progress is lost on L205 (6 to 8 weeks). The company still expects delivery of the two vessels from the yard on schedule in Q1 and Q3 2010, respectively. 4. Capital Structure The company has during the last two years issued in excess of NOK 858 million in share capital, NOK 420 million in a convertible bond and EUR 60 million in a secured loan bond. The final part of the funding of the two vessels will consist of bank loans. The company has a close dialogue with a limited number of banks in order to secure the first tranche of the remaining financing, based on the ConocoPhillips contract. The company expects to have this part of the financing in place by the end of August The company has also started the process towards securing the second tranche based on the contract with Scira Offshore Energy Limited, with its 50/50 partners StatoilHydro and Statkraft. 5. Convertible bond and embedded derivative According to IFRS, a convertible bond shall be split into an equity element and a debt element. However, this is not the case if the currency of the convertible bond is different from the functional currency of the issuing company. The convertible bond was issued in NOK by Master Marine ASA, having EUR as its functional currency. Consequently, the convertible bond includes a financial derivative to be recognised as a financial liability at inception and with following changes in estimated market value recognised in the profit and loss statement. In Q1 2009, the change in fair value amounted to EUR 3.86 million, representing financial income (non-cash) and decreasing the liability to EUR 3.77 million as of 31 March, Legal Issues First Securities ASA instituted in 2007 legal proceedings against Kaupthing ASA regarding the termination of a financial advisor s agreement between the two parties in connection with Master Marine s share and bond offerings in Kaupthing has recourse against Master Marine if First Securities should succeed in its claim. Both Kaupthing and Master Marine dispute the claim. Kaupthing is currently under administration and any further development of the claim situation is uncertain. 7. Events after the balance sheet date Master Marine was in April 2009 awarded a contract with Scira Offshore Energy Limited for the planning and carrying out of installation of 88 wind turbines and 2 substation modules for the Sheringham Shoal Offshore Wind Farm Project. The contract was awarded to Master Marine after strong competition from other installation contractors, and the award shows Service Jack s superior capacity to install wind turbines. Ernst & Young UK as financial advisor to the administration board of Kaupthing Singer & Friedlander (KSF) in UK appointed in May this year Pareto Securities to manage the sale of KSF s shareholding in Master Marine. The sale of pct of the company is expected to be closed by the end of Q Master Marine ASA Q1 2009

9 8. Largest shareholders The 20 largest shareholders as of 10 June, 2009 are: Name Euroclear Bank S.A. / 25% Clients Labroy Marine Ltd. Pareto Growth AS Brown Brothersw Harri S/A Oppenheimer Que Goldman Sachs Int. Security Separation Odin Offshore Odin Forvaltning AS Pensjonskassen Stato Luen AS Freyer Holding AS ABN Amro Global Cust A/S AAGC/Clients Acc Johansson Per Martin Bank of New York Mel S/A Mellon Nominee 1 Statoil Forsikring A JP Morgan Chase Bank Claessen Harald KLP LK Aksjer Verdipapirfondet KLP Aksjevold AS c/o AS Naturbetong GMC Holding AS O.J Sandven AS v/ Olav Sandven Svenska Handelsbanken c/o Handelsbanken AS Account Type NOM NOM NOM NOM NOM Country Of orgin BLE SGP USA GBR NLD USA NLD SWE Numpers Of shares Ownership interest 48,35 % 11,27 % 5,54 % 5,16 % 3,76 % 3,23 % 2,55 % 2,18 % 1,94 % 1,59 % 1,58 % 1,52 % 1,49 % 1,07 % 0,97 % 0,61 % 0,56 % 0,56 % 0,41 % 0,36 % Total 20 largest shareholders ,70 % Other ,30 % Total shares ,00 % Master Marine ASA Q

10 Master Marine ASA - Drammensveien 288, NO-0283 Oslo, Norway. Postal address: P.O. Box 76, NO-1325 Lysaker, Norway. Tel: Fax: mail@master-marine.no -