Third quarter 2014 Bergen 5 November 2014 05.11.2014 1
Agenda Highlights Q3 2014 Operational review Financial review Summary and outlook Polar Onyx 05.11.2014 2
Highlights third quarter Stable and good operations Fleet utilisation of 99% New time charter agreement for Polar Queen Historically strong EBITDA Polar Queen 05.11.2014 3
Key figures REVENUES NOK million EBITDA NOK million NET PROFIT NOK million 300 250 215 214 241 150 120 126 110 125 500 400 439 200 150 176 168 90 66 75 300 200 100 50 60 30 100 0 41 44 47 0 Q313 Q413 Q114 Q2 14 Q3 14 0 Q313 Q413 Q114 Q2 14 Q3 14-100 -73 Q313 Q413 Q114 Q2 14 Q3 14 05.11.2014 4
Operational Review Q3 2014 05.11.2014 5
New time charter for Polar Queen Extension of existing charter with Boa Marine Services Inc. 3 years duration, commencing April 2015 Includes options for up to 3 years extensions Polar Queen 05.11.2014 6
Contract backlog of NOK 3.2 billion* per 30 September 2014 CONTRACT COVERAGE* Utilisation rate CONTRACT BACKLOG* NOK million 100% 100% 1 800 80% 1 500 1 382 60% 67% 57% 1 200 40% 47% 900 600 816 772 20% 300 241 0% from 30.09.2014 2015 2016 2017 * Excluding options 0 from 30.09.2014 2015 2016 2017-21 05.11.2014 7
Average duration of contract portfolio is 2.4 years VESSEL CHARTERER SUBSEA Fixed Option Polar Prince Reef Subsea Polar King Reef Subsea Polar Queen BOA Marine Services Option (3x1yr) Polar Onyx Ceona Services Contract (5 yr) + Option (5 yr) Fixed MARINE SEISMIC Polar Duke Dolphin p Geophysicalp y Option (6x1yr) Polar Duchess Dolphin Geophysical Option (4+2 yr) Polar Marquis* Dolphin p Geophysicalp y New contract (3.5 yr) + Option (2 x 2 yr) Seismic Newbuild Dolphin Geophysical Contract (5 yr) + Option (2 x 3 yr) ICE/ SUPPORT Polar Piltun Polar Baikal Sakhalin Energy Inv. Sakhalin Energy Inv. 2014 2015 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ernest Shackleton British Antarctic Survey Option (4x1 yr) Polar Pevek Exxon Neftegas Long-term contract until 2021 Fixed Option Option * Former Geo Atlantic Note: Per 30 September 2014 Ernest Shackleton Option for 2015 declared in October 2014 05.11.2014 8
Construction of new seismic vessel Advanced 3D seismic vessel with 22 streamers and ice class 1A* Expected delivery from Kleven Verft in Q1 2015 5 years contract with Dolphin Geophysical from delivery Seismic newbuild 05.11.2014 9
Subsea Fleet utilisation 100 percent 96 percent in Q3 2013 Solid performance improvement YoY Polar Onyx in operations from primo March 2014 Increased fleet utilisation Market Downward pressure overall but relatively good demand for modern and advanced vessels KEY FIGURES NOK million 150 120 90 60 30 0 90 50 82 32 94 46 132 72 145 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Operating income EBITDA 80 05.11.2014 10
Marine Seismic Fleet utilisation 98 percent 100 percent in Q3 2013 Increased income Slightly weakened EBITDA KEY FIGURES NOK million 150 120 Market Challenging market Sound order backlog 90 60 30 80 49 76 25 58 21 67 30 90 47 0 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Operating income EBITDA 05.11.2014 11
Ice/ Support Fleet utilisation 99 percent 94 percent in Q3 2013 KEY FIGURES NOK million Reduced activity and subsequent performance YoY Sale of HMS Protector in September 2013 Yard stay for HMS Protector prior to expire of management agreement 50 20 44 28 18 16 16 Booked gain from termination of UK Tax Lease agreement for Ernest Shackleton in third quarter 2013 Market Generally stable development but small volume -10 9 8 8 6-2 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Operating income EBITDA Note: As of 01.01.2014 joint ventures are booked as financial items using the equity method. All figures have been restated accordingly. 05.11.2014 12
Financial review Q3 2014 05.11.2014 13
Income statement NOK mill Q3 2014 Q3 2013 (2) YTD 2014 YTD 2013 (2) 2013 (2) Operating income 240.7 215.0 623.0 569.9 745.5 EBITDA 124.8 126.5 309.9 309.8 375.4 EBIT 88.1 464.3 201.5 581.1 621.9 Net financial income and expenses - 39.4-5.0-67.2-151.8-260.5 Profit before tax 48.7 459.3 134.3 429.3 361.4 Net profit in the period 47.0 439.0 131.7 444.5 371.0 Normalized profit before tax (1) 59.0 69.2 149.6 78.9 81.8 Earnings per share 1.08 10.06 3.02 10.18 8.50 (1) Profit bef. tax adjusted for unrealised currency gains/losses, profit from disposals and write-downs (2) As of 01.01.2014 joint ventures are booked as financial items using the equity method. Figures from Q3 2013 and 30.12.2013 have been restated accordingly. 05.11.2014 14
Segments Q3 2014 Q3 2013 NOK mill Revenues EBITDA Margin Revenues EBITDA Margin Subsea 145.1 80.2 55.3% 90.0 50.1 55.7% Marin Seismic 89.7 46.9 52.3% 80.4 48.9 60.8% Ice/ support 5.9-2.3 n/a 44.5 27.5 61.8% Sum 240.7 124.8 51.8% 214.9 126.5 58.9% 05.11.2014 15
Balance sheet per 30.09.2014 NOK million 5 000 4 000 3 000 2 000 1 000 0 56 3850 192 2272 1882 440 assets 384 Assets Intangible assets Fixed assets Other current assets Cash & liquid Equity & Liabilities Equity Longterm liabilities Current liabilities Total balance NOK 4 538 million Equity ratio 50.1 percent Solid cash position NOK 422.5 million Net debt NOK 1 644 million Total debt of NOK 2 266 million Average duration of loan portfolio is 3.1 years Available revolving facility of NOK 250 million 05.11.2014 16
Outlook Market view short term Reduced petroleum investment due to cost cutting programs and fall in oil prices Uncertainties related to political risk in the Russian region upheld Expected trends in segments Subsea: Downward pressure, but still demand for advanced vessels Marine Seismic: Challenging market Ice/support: Stable but limited volume 05.11.2014 17
Summary Stable and robust operations New time charter for Polar Queen Historically strong EBITDA Post quarter: Extension of bare boat charter for Ernest Shackleton Polar Queen 05.11.2014 18
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