Prosafe Se

Welcome to Q4 2024 result for ProSafe. The last quarter was quite an eventful quarter for us on operation. I would say that We had a good quarter, all the four vessels that are in operations had 100% utilization and we managed to extend the contract for Zephyrus for another two years. As we said the previous quarter, we expected that, but now we actually have ink on the paper. for financials reese will come back to that later but we are working on the refinancing of the company and as previously said we are looking to refinance a total of 400 million dollars and we have we have good dialogue with all stakeholders including our lenders on that so we are working on that and we expect to have that completed within first half. But I think that we have good progress on the refinancing as such. Market wise, I'll come back to Brazil actually, because there's a lot of activity there. So that's quite positive. So our thesis on Brazil is coming through. So we are optimistic on that. And also I'll talk a little bit about what happens in the rest of the world. But in general, the backload has grown and that's something that we have focused very much on for the last year. So there we have executed on the backlog growth. When it comes to the fleet, Zephyrus is now on contract to Q3, 2027. So there we got a slight uptick in rates and we also have some more coverage for bunker consumption. So the Zephyrus will do her SPS towards the latter half of this year. We haven't sort of pinned down the final dates yet, but that will happen in 2024. sort of the second half, sorry, 25, the second half of 2025. The safe euros is onto Petrobras. So I mean, she's going on the contract and that is sort of running until 2027. So it's at, I think, $86,000 per day. On notice, she's also due her SPS, so that will happen either towards the end of this year or the beginning of next year. Again, I'll talk a little about the future after 26. I think that the Petrobras tenders that are out could be very suitable for a notice. But I'll talk a little bit about that. And likewise, the safe Concordia is on a contract and she is going to go off contract the 9th of March. And then she is due her SPS immediately thereafter. So I'll come back to that as well later. Boreas, we are working on the reactivation. This is currently in Norway. in Skipevika and the thrusters are off and we expect her to be on heavy lift vessel around the beginning of April to go to the Far East and then she will be on contract. The contract window is such that most likely you're talking towards the end of the year, November, December commencement of that contract. It's 15 months with six months of options. The safe Caledonia, we are reactivating her, and she's going to go on a contract to Ithaca 1st of June, and that's a six-month contract with three months of options. Scandinavia, no news. She is still cold stack, and there is no news regarding Nova or Vega. When it comes to the market, this is... is we define our market as 23 vessels that are active. I just like to say that there are other units that can also sort of enter the market, especially on the tender in Brazil, but our core market are 23 units. And as you can see, 11 of those are currently for 25. We expect them to operate in Brazil. So that's more or less 50% of the market. When it comes to the North Sea, what we see there is there is activity both for, you know, in particular for Caledonia, which is on contract this year, but there's also activity going on in 26 and 27. So we are working hard then to see if we can find contracts for the Caledonia for, you know, for the coming years. The strategy there when we took her out to lay up this year was really sort of cash on cash that the Caledonia should be positive and that is very much the case. So then we have a vessel that has been reactivated, has done her SPS and then is ready to work for the coming years. I would say that we also see activities in Africa, Guyana. So in general, outside of Brazil, there is definitely activity, but Brazil is the market now that is really driving the flotel industry. We've shown this before. The driver here, of course, is the increase in oil production in Brazil. They are currently producing 3 million barrels per day. Their target is to come to 5 million barrels towards the end of the 20s, early 30s. And we see that, you know, the number of FPSOs that are sort of being, that have been contracted and we expect to be contracted is very much, you know, it's very strong. So obviously the general activity, not only for flotels, but in other segments of the industry is also very strong in Brazil. But I just add that there are actually other, not only Petrobras in Brazil, there are a number of other sort of both lease operators and also EPC companies in Brazil. So we see that there are more demand from other players in Brazil. picking up and so so we are quite quite optimistic as that as well as we talked about before sort of the corrosion in Brazil is quite heavy and that is not something that's only sort of the case for Petrobras also for other operators in Brazil that's definitely the case so in Brazil so there are There are two tenders out actually. First, they came out with a four-year tender. That's a high specification tender. uh and the the original date was last week that it has been extended to the middle of this month so that's very typical that you know there will be some extension before you have to to give your rate uh there are other players also obviously for that so that that tender is for up to five units So that means that they can take everything from zero to five units for that tender. We think it is ideal for NOTOS. We know that NOTOS is one of the sort of the premium rigs or operate so the vessels that Petrobras they really like it so we think we are well positioned for notice in this coming tender and the date sort of they have the first date the commencement date we cannot make but we can very much make the second window here with the second tender So this is something that will most likely, I would say, be concluded Q2. I mean, it takes some time before this process to play out, but I think that we will know more in Q2. But this is the way we read Petrobras is that we think that currently they have eight vessels on contract. We think that their incremental demand based on our reading of situation is the incremental amount is three vessels. That's an addition to the eight and of course, notice is part of that eight. That's the way we assess the situation. Then there are also other operators in Brazil. as we talked about. So we think that, you know, there could be, you know, if this plays out, it could, you know, the demand in Brazil could go from, you know, from the current sort of 10 vessels in 24 to between 15 and 17 vessels a couple of years out. Then there is an addition to the first tender, there's a second tender out for a lower spec vessel for two years. Again, Concordia could be a candidate for that, time will tell, but it depends on, as we said, we are not going to go through the SPS with Concordia unless we have a contract that can justify it. On operations, we touched upon that earlier, good operations, 100% utilization on the vessels in operation, and also that includes the safe Concordia. So our thinking there is really either, you know, we're going to put her in layup unless we have a contract that can justify the SPS. And that's quite a big number that we're talking about there. So it must be sort of a contract that stands on its own two legs. And alternative, we also look for sale, if that makes sense. So we are quite sort of a, pragmatic and uh on on concordia what makes most sense so the the caledonia again she's going on going on contract first of june to ithaca and there everything goes she's in scapa flow there's some some bad weather but other than that that's going according to plan and likewise is if boreas is also going according to plan The safe Scandinavia has now been laid out for a number of years. I mean, it costs us about a million dollars to have our cold stack per year. So, I mean, it's an option premium in a way to see where the market goes. But, you know, now we had her in layout for, again, a number of years. So unless we can see some visibility for contract there, we are considering to sell the Scandinavia as well. So this is the backlog, you know, we have delivered on this. So the backlog has now up 44% compared to the same quarter last year. So now the sort of the next vessels then that are due for contract is of course the NOTOS and Ithaca, no sorry, the Caledonia for 2026 and potentially the Concordia. Yeah. That's what I had on the numbers and maybe you can do the numbers, Rhys.

Thank you everyone for joining. I'll walk through some of the numbers here. I think probably the most important activity from a financial perspective that we're working on is the refinancing, as Terje correctly mentioned. As we previously communicated in the last quarter, we're looking at a total financing need in the range of $400 million. That includes not only the refinancing of the debt that's coming due at the end of the year, but it also includes a cash need in 2025. And that number, we believe, is in the range of $70 million. We are reactivating the Caledonia. We're reactivating the Breas. We have a couple of SPSs coming up. So we are looking at in CapEx alone, approximately a number close to the $70 million mark. So that number is sort of the total cashflow, not just the CapEx of course, but a significant portion of the spend in 25 is related to CapEx. So the amounts coming due plus the CapEx plus giving us headroom in the future to operate, continue to operate the business, we believe we have a need in the $400 million range. As Terry has said, good dialogue with the various stakeholders. And we are aiming to conclude the process in the first half. And as we've communicated over the last several quarters, actually, the runway that we have is into mid 2025. So this is clearly the focus over the coming weeks and months is to resolve the capital need. Jumping back to the performance of the actual quarter, I think it was a good quarter. As Tania said, we had very good uptime. I think revenue was broadly in line with the previous quarters as expected. We did have some one-off other income in the quarter, which was positive. This is largely related to some historical agreements, but it was good to see an extra million or so coming in on that. By and large, steady as she goes on the operating revenue. on the cost side we did see some slightly increased cost i think that was mentioned already i think this morning i saw a few analyst comments we did have some increased costs in the quarter i think that by and large is driven to timing particularly around concordia so should we actually go and lay up concordia uh there is a certain there there's a demobilization cost associated with this uh which we have we've taken an adjustment in the quarter Moving on, I think cash and balance sheet is obviously the key focus. On the balance sheet, I think there's obviously been a recategorization. Long-term debt is now short-term debt given its maturity within one year. Otherwise, I think the balance sheet is by and large pretty steady. The one thing that we do see, of course, running through the balance sheet and the cash flow is working capital. As we ramp up on these projects, particularly the Caledonia and the Bureas, we did start some work on the Caledonia Bureas in Q4. And we see that that had a negative working capital draw. So I think there have been some questions around the cash and liquidity balance. the year end versus versus estimates the majority of this is driven by working capital movements both so year-end movements pretty typical clients pay you slightly over the year end rather than before the year end but in addition we saw some draw driven by the ramp up of these projects and also we saw some pulling forward of capex in relation to these projects particularly caledonia where we spent a little bit more CapEx in 24, which was originally planned to spend in 25. But the cash balance today is still hovering around the $50 million mark, and we do have a significant portion of prepayments coming from clients supporting these reactivations. So we think the runway again runs into mid-2025. With that, I'll let Terja jump back in and wrap things up.

Yeah, I mean, I think we touched upon this, but I think we are well positioned in terms of the market and I think that the market will tighten. We see it from Brazil and that's going to drive this market in the years to come. And obviously we are focusing a lot on the refinancing now that we hope to conclude within the first quarter or first half of this year. I think that sort of ends our presentation. If there are any questions, you can either raise them here in the audience or you can send an email to Ries and we will sort of read them out and answer them as best we can. Yeah, maybe you want to use a microphone some. uh with Petrobras requiring up to three incremental units in the new tender do you see any potential to bid the new builds yeah I mean that's that's part of course some of our assessment so so that that is that they are you know they meet the specification let me put it that way but I think in terms of what we will bid and not bid will keep our okay you know cars close to our chest but but what i can say is that the new buildings are meeting the specifications but as always in in brazil it's the the lowest bidder that wins so so there it's in this new tender compared with a 120 level that we've seen uh recently again we we think that the market dynamics are favorable But we will again try to be a little bit sort of cautious in commenting too much on what we think the market will be for these contracts. But we think that the market fundamentals are positive. So that should sort of hopefully mean that it's in our favor.

There's one question here from the audience regarding the marketing of safe Scandinavia. Any plans regarding that?

I think we have, in terms of marketing for contract, we are very active on that. In terms of marketing for sale, we have, we're talking to, you know, she's out there. So we have a dialogue with a few parties, but nothing that we can report on. Okay. Anything else, Cerise, from... Let's take a... If not, thank you very much all for attending and I look forward to see you next quarter.