Prosafe SE

Third quarter 2014 results - Seite 2

On the basis of a faster fleet growth, the Board will normally target a pay out ratio in the range of 40 to 60 per cent of the preceding year's net profit. In periods with exceptional conditions the pay-out ratio may be outside that range.

Guidance for the coming period
In light of the current weak market outlook in the North Sea and the increase in overall supply, the Board of Directors shall focus on strengthening the balance sheet and securing strategic flexibility. Therefore, for the period until the end of 2016 the Board is targeting quarterly dividend payments corresponding to an annual payout ratio in the range of 25 to 35 per cent of the preceding year's net profit.

New builds
The new build projects are progressing well and cost forecasts remain as previously communicated.

Delivery of the first vessel, Safe Boreas, is on track for delivery during the fourth quarter, giving adequate time for mobilisation for the first contract, commencing in April/May 2015. Its sister vessel, Safe Zephyrus, will be ready for operations during the summer of 2015.

Construction of the Safe Notos and Safe Eurus at COSCO Quidong in China is progressing as planned and the vessels should be ready for operations during the first and second half of 2016 respectively.   

Outlook
Statoil, Premier Oil and Prosafe have entered into an agreement for the assignment of Safe Scandinavia from the Snorre field in the Norwegian Continental Shelf, to the Solan field in the UK Continental Shelf with effect from early October 2014. Upon completion of the assignment, Safe Scandinavia will demobilise to the Westcon yard in Norway where it will undergo a temporary conversion to a tender support vessel (TSV). The TSV contract with Statoil at the Oseberg Øst field is expected to commence mid 2015.

As a result of E&P companies' spending and cost cutting initiatives there has been a softening of demand for accommodation vessels in the North Sea region. Several projects both in Norway and in the UK have been descoped and/or postponed, resulting in a temporary reduction in demand for accommodation support. Overall, this will most likely lead to a reduction in the North Sea contract inflow going forward, compared to the levels experienced during the past two to three years.

The demand outlook in Mexico remains positive. The activity level in shallow waters is high, evidenced by substantial growth in the number of drilling jack-ups under contract in the region. This bodes well for continued robust demand for accommodation support services in the short-to-medium-term.