BW Offshore: Third quarter results 2021

BW Offshore: Third quarter results 2021

23 Nov 2021 07:30 CET

Third quarter results 2021

HIGHLIGHTS

* EBITDA of USD 97.1 million and operating cashflow of USD 157.2 million
* Completed Barossa FPSO debt financing and equity joint venture partnership
* Barossa FPSO project progressing as planned
* USD 67 million in gross proceeds from block sale of shares in BW Energy in
October
* Quarterly cash dividend of USD 0.035 per share
* Equity ratio of 39.0% and USD 305.7 million in available liquidity
* One-year contract extension for FPSO Sendje Berge signed in November

In the third quarter, BW Offshore continued to progress the Barossa FPSO project
according to plan, including completing the debt financing and the equity joint
venture partnership for the project. First steel cut for the FPSO hull was
achieved in September ahead of original schedule. Due to price inflation for
materials, the project is experiencing some cost increases which are covered by
the project contingency. The Company is focused on locking in suppliers and
equipment packages to manage costs and maintain schedule amid increasing stress
on global supply chains.

The Board of Directors has declared a cash dividend of USD 0.035 per share.
Shares will trade ex-dividend from and including 26 November 2021. Shareholders
recorded in VPS following the close of trading on Oslo Børs on 29 November 2021
will be entitled to the distribution payable on or around 7 December 2021.

"The Barossa project is on track and debt and equity financing have been
completed. We have full focus on safe and efficient execution of the FPSO
construction and we are also delivering stable performance from our core
operating assets," said Marco Beenen, the CEO of BW Offshore. "The recent
increases in energy prices emphasises the need for continued development of new
oil and gas fields in tandem with a rapid scale-up of renewable energy
production such as floating wind. We are well positioned to capture long-term
growth and value creation opportunities across these markets with our widening
offering of offshore energy production solutions."

FINANCIALS
EBITDA for the quarter was USD 97.1 million (USD 91.1 million in Q2 2021). The
increase is mainly related to higher revenue from BW Catcher due to agreement on
commercial uptime for the first three quarters in the year, final milestone
payment for demobilisation of Umuroa, partly offset by effects coming from
planned production shutdown on Espoir Ivoirien and no contribution from FPSO
Polvo as the contract has ended.

EBIT for the third quarter was USD 28.3 million (USD 23.2 million in Q2 2021).
Net financial expense was USD 14.0 million (USD 16.2 million in Q2 2021). Tax
expense in the quarter was USD 5.3 million (USD 6.4 million in Q2 2021).

Total equity at 30 September 2021 was USD 1,089.5 million (USD 1,103.7 million
in Q2 2021). The equity ratio was 39.0% at the end of the quarter (39.9% in Q2
2021).

Net interest-bearing debt was USD 807.1 million (USD 854.4 million in Q2 2021).

Available liquidity was USD 305.7 million when including USD 106.9 million
available to draw under the corporate loan facility (excluding any liquidity in
BW Ideol).

The Barossa FPSO is financed by a 14-year combined construction and long-term
debt facility of USD 1,150 billion with a syndicate of nine international banks
and by USD 240 million from the equity joint venture, consisting of BW Offshore
(51%) and ICMK Offshore Investment Pte Ltd (a 50:50 JV of ITOCHU Corporation and
a subsidiary of Meiji Shipping Co Ltd) (25%) and Macquarie Bank Limited (24%).

In addition, approximately USD 1 billion in pre-payments will be paid by the
Barossa Upstream Joint Venture Partners during the construction period. These
pre-payments are linked to progress and milestones on the project. By end
September a total of USD 133 million has been received as per plan.

In October, BW Offshore sold 20 million shares in BW Energy raising USD 67
million in gross proceeds. The Company decided to divest part of its
shareholding to accelerate growth opportunities within energy infrastructure.
Following the sale, BW Offshore holds approximately 27.5% of the shares
outstanding in BW Energy.

OPERATIONS
The average commercial uptime for the fleet during the quarter was 91.6% (98.7%
in Q2 2021). The commercial uptime was mainly affected by the planned
maintenance shutdown on Espoir Ivoirien.

FPSO Polvo reached end of contract in July 2021. Decommissioning has been
completed in the quarter and preparations for demobilisation are ongoing. The
unit will subsequently be in lay-up awaiting final investment decision on BW
Energy's Maromba field development.

Umuroa and Cidade de São Vicente have reached their lay-up locations, in
Indonesia and Oman, and the Company is currently evaluating recycling options.

In November, BW Offshore signed an agreement with Addax Petroleum Exploration
(Nigeria) Ltd, for a one-year extension for the lease and operation of the FPSO
Sendje Berge. The firm period has been extended to Q4 2022.

OFFSHORE FLOATING WIND
BW Offshore is actively engaged in the energy transition by developing clean
energy production solutions, applying its offshore engineering and operations
capabilities to drive future value creation through its 53.2% ownership in BW
Ideol, a global pure player in floating offshore wind. BW Ideol has a dual-track
strategy as a co-developer of offshore floating wind projects and as an EPCI
(engineering, procurement, construction and installation) contractor of floating
offshore wind technology.

In the third quarter, BW Ideol announced its partnership with EDF Renewables and
Maple Power for France's first commercial-scale floating offshore wind tender in
South Brittany. The company also secured exclusive long-term access to the
Ardersier Port in Scotland for local manufacturing of concrete floating wind
substructures for the ScotWind project based on BW Ideol's proven Damping Pool®
technology.

Separately, BW Offshore is also participating in the ScotWind tender in
partnership with the U.S. renewable energy and utility company Invenergy.

OUTLOOK
The Company expects that core units in the existing fleet will continue to
generate significant cash flow in the time ahead. The firm FPSO contract backlog
at end of September 2021 amounted to USD 6.6 billion when including the Barossa
contract. With probable options, the backlog was USD 8.0 billion at the end of
the third quarter.

The Covid-19 pandemic continues to affect operations and the market environment.
Higher energy prices in 2021 are a sign of improved market fundamentals as
distribution of vaccines accelerates and more nations normalise activity levels.

The oil and gas industry is expected to continue to focus on progressing long-
term large field development initiatives with low break-even costs. This
expectation is supported by the increase in oil and gas prices to date in 2021.
BW Offshore maintains a selective approach to such opportunities, progressing
discussions on only a few high-end projects which can be developed in
partnership with global infrastructure investors.

The Company is seeking to optimise the current asset portfolio considering the
overall cost base. This includes potential divestment or recycling of units if
FPSO redeployment opportunities do not materialise.

BW Ideol is BW Offshore's vehicle for investment in floating offshore wind. The
company is progressing multiple projects supported by the funding from the
private placement earlier this year.

BW Offshore has a robust financial position. With the recent divestment of part
of the shareholding in BW Energy, the Company has further strengthened the
balance sheet, to position for accelerated growth into future accretive offshore
energy projects and long-term value creation. The Company remains committed to
provide growing returns to shareholders and a quarterly cash dividend.

Please see attached the Q3 Presentation. The earnings tables are available at:

www.bwoffshore.com/ir/ (http://www.bwoffshore.com/ir/)

BW Offshore will host a presentation of its financial results 09:00 (CET) today
at Hotel Continental in Oslo, Norway. The presentation will be given by CEO
Marco Beenen and CFO Ståle Andreassen.

You can also follow the presentation via webcast, available on:

https://www.bwoffshore.com/ir/bwo-q3-2021
(https://www.globenewswire.com/Tracker?data=V8u2xOnHfcpAWUbS1dSxg5VnFH6w8FcXy_a3
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lQ0tZXjn3mY0r1o3LH0-DR2rY8lEDysI1Q==)

Please note that if you follow the webcast via the above URL, you will
experience a delay compared to the live presentation. The web page works best in
an updated browser.

For further information, please contact:
Ståle Andreassen, CFO, +65 97 27 86 47
Anders S. Platou, Head of Corporate Finance & Strategy, +47 99 50 47 40

About BW Offshore:
BW Offshore engineers innovative floating production solutions. The Company has
a fleet of 14 FPSOs with potential and ambition to grow. By leveraging four
decades of offshore operations and project execution, the Company creates
tailored offshore energy solutions for evolving markets world-wide. BW Offshore
has around 2,000 employees and is publicly listed on the Oslo stock exchange.

This information is subject to disclosure requirements pursuant to Section 5-12
of the Norwegian Securities Trading Act.

More information:
Access the news on Oslo Bors NewsWeb site

547563_2021 Q3 Presentation.pdf

Source

BW Offshore Limited

Provider

Oslo Børs Newspoint