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- EBITDA of USD 110.8 million
- Operating cashflow USD 114 million, excluding final settlement of USD 43
million to Petrobras related to Cidade de Sao Mateus
- Equity ratio 39.7% and USD 294.4 million in available liquidity
- Successfully completed Floating Wind subsidiary BW Ideol private placement
and listing on Euronext Growth
- Signed USD 4.6 billion, 15-year firm FPSO Services contract for Barossa FPSO
with Santos
- Firm FPSO contract backlog of USD 7 billion at end of March, up from USD
2.6 billion at year end 2020
- Recycling of FPSO Berge Helene in April in compliance with Hong Kong
convention
- Cash dividend of USD 0.035 per share
- Contemplating inaugural green bond issue
In the first quarter, BW Offshore made significant progress in executing the
dual-track strategy of evolving the core FPSO business and capturing energy
transition opportunities by developing adjacent business areas.
The creation and listing of BW Ideol on Euronext Growth in Oslo on 18 March with
BW Offshore ownership of 53.2% of the shares was one milestone. The listing
followed a successful Private Placement which attracted strong interest from
leading domestic and international investors, including specialist renewable
energy investors, raising gross proceeds of NOK 519.6 million.
The USD 4.6 billion, 15-year firm FPSO Services contract for the Barossa gas
field, located 300 kilometres offshore Darwin in Australia, was a second
milestone. The final investment decision for the project was made by Santos and
its partners on 30 March 2021. Initial gas production from the FPSO is targeted
for the first half of 2025. The FPSO project capex of around USD 2 billion will
be financed by BW Offshore in combination with banks and equity partners, and
approximately USD 1 billion in pre-payments during the construction period by
the client for FPSO Services to be performed during the production period.
Completion of the equity and debt financing for the Barossa project is
progressing as planned with a syndicate of international project finance banks
providing 14-year debt financing during both construction and operation. BW
Offshore and international infrastructure equity partners will contribute 51%
and 49% of the project equity respectively.
âWe had an active start in 2021, progressing two major strategic projects. The
creation of BW Ideol as a floating offshore wind champion and signing of the
Barossa contract as a new infrastructure-like FPSO project with attractive long-
term returns and strong partnerships, confirm our position as a leading provider
of offshore energy production solutions across energy transition and oil and
gas. We are now leveraging that position to widen our funding base in support of
long-term growth plans and stable direct shareholder returns,â said Marco
Beenen, the CEO of BW Offshore.
On 23 April BW Offshore completed the sale of FPSO Berge Helene for
environmentally safe demolition and recycling in compliance with the Hong Kong
Convention at Priya Blue shipyard in India. Grieg Green has been nominated as
representatives to be on site at the yard to monitor progress, compliance with
environmental and safety regulations and that the ship recycling plan is being
applied.
FINANCIALS
BW Offshore completed the BW Ideol private placement in March 2021. Following
the private placement, BW Offshoreâs ownership in BW Ideol is 53.2% and
consequently BW Offshore will consolidate BW Ideol from 15 March 2021.
EBITDA for the first quarter of 2021 was USD 110.8 million (USD 91.9 million in
Q4 2020).
EBIT for the first quarter was USD 41.4 million (negative USD 30.0 million in Q4
2020) after impairment of USD 4.2 million for FPSO Berge Helene. The impairment
was recognised as a consequence of the cash consideration of USD 16 million from
selling the unit being USD 4.2 million lower than net book value for the unit at
end of the quarter.
Net financial items were positive by USD 7.2 million. This is mainly driven by
significant positive non-cash mark to market (MTM) changes to interest rate
hedges due to increasing swap rates, offset by interest expenses in the quarter.
Tax expense was positive by USD 40.3 million. BW Offshore has tax losses carried
forward in Australia as a result of a previous operation linked to the
acquisition of Prosafe Production. This tax loss has previously not been on the
balance sheet as the Company has had no operation in Australia in recent years.
With the signing of Barossa, it is anticipated that this tax loss can be
utilised and consequently a deferred tax asset of USD 48.8 million was
recognised in Q1 2021.
Total equity at 31 March 2021 following the BW Ideol private placement was USD
1,105.5 million (USD 945.0 million in Q4 2020). The equity ratio was 39.7% at
the end of the quarter (36.5% in Q4 2020).
Net interest-bearing debt was USD 931.2 million (USD 936.1 million in Q4 2020).
Available liquidity was USD 294.4 million when including USD 145 million
available to draw under the corporate loan facility. Liquidity has been reduced
during Q1 2021 as BW Offshore made a full and final settlement of USD 43 million
with Petrobras to close out the contract for Cidade de Sao Mateus. This
settlement has been fully provided for so there was no impact on the income
statement in the quarter.
The Board of Directors has declared a cash dividend of USD 0.035 per share.
Shares will trade ex-dividend from and including 1 June 2021. Shareholders
recorded in VPS following the close of trading on Oslo BĂžrs on 2 June 2021 will
be entitled to the distribution payable on or around 10 June 2021.
FPSO OPERATIONS
The FPSO fleet continued to deliver stable uptime in the quarter with an average
commercial uptime for the fleet of 97.4% (97.8% in Q4 2020).
The disconnection of the BW Umuroa has proceeded according to plan and the FPSO
was successfully disconnected from the Tui field beginning of May. The unit will
now be prepared for tow back to Asia mid May.
OUTLOOK
The majority of BW Offshoreâs fleet remains on contract with national and
independent oil companies. The Company expects that the existing fleet will
continue to generate significant cash flow in the time ahead. The firm FPSO
contract backlog at end of March 2021 amounted to USD 7.0 billion when including
the Barossa contract, an increase from USD 2.6 billion at 31 December 2020. When
adding probable options, the backlog was USD 10.0 billion at the end of the
quarter (USD 4.0 billion).
The COVID-19 pandemic continues to affect operations and the market environment.
Higher oil prices in 2021 are a sign of improved market fundamentals as
distribution of vaccines accelerates and some nations are resuming more normal
activity levels. Still, the expectation is that the oil and gas industry will
continue to focus on progressing long-term large field development initiatives
with low break-even costs. BW Offshore maintains a selective approach to such
opportunities, considering only a few high-end projects which can be developed
in partnership with global infrastructure investors.
BW Ideol is the Companyâs vehicle for investment in floating offshore wind. The
net proceeds from BW Ideolâs private placement will predominantly be used to
fund the development of the project pipeline, working capital requirements and
for general corporate purposes.
BW Offshore has a robust financial position and is positioned to continue to
deploy capital towards future accretive offshore energy projects and long-term
value creation, and to provide growing returns to shareholders and a quarterly
cash dividend.
Please see attached the Q1 Presentation. The earnings tables are available at:
www.bwoffshore.com/ir/ (http://www.bwoffshore.com/ir/)
BW Offshore will host a conference call of the financial results 09:00 (CEST)
today. The presentation will be given by CEO Marco Beenen and CFO StÄle
Andreassen.
Conference call information:
To dial in to the conference call where the quarterly results and Q&A will be
hosted, please dial one of the following numbers:
Norway: +47 2350 0236
Singapore: +65 6408 5767
UK: +44 3333 009 271
US: +1 8335 268 347
France: +33 170 750 736
You can also follow the presentation via webcast with supporting slides,
available on:
https://streams.eventcdn.net/bwo/2021q1/
Please note that if you follow the webcast via the above URL, you will
experience a 30 second delay compared to the main conference call. The web page
works best in an updated browser - Chrome is recommended.
For further information, please contact:
StÄle Andreassen, CFO, +65 97 27 86 47
Anders S. Platou, Head of Corporate Finance, +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.
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