Prosafe Announces 2nd Quarter & First Half Report 2020

Source: www.gulfoilandgas.com 8/20/2020, Location: Europe

Although the market conditions and macro environment continue to be challenging due to effects of Covid-19 and the parallel oil price collapse, the company remains in constructive discussions with clients relating to upcoming and ongoing contracts on such subjects as temporary suspensions and/or deferral as well as commercial and payment terms. Further details are described in the Operations section later in this report. The company has also successfully implemented further cost and spend saving initiatives to adapt to the new reality and protect liquidity.

Prosafe had liquidity reserve of USD 177.5 million at the end of Q2 2020 (USD 241 million). The forbearance arrangement previously reported expired at the end of July. However, the process and creditor discussions remain constructive and lenders in general maintain their support of the company. Pending conclusions, the company continues to operate on a going concern basis to protect and create value through challenging market conditions on the assumption that there is justified hope for a sustainable financial solution.

Recent highlights
- Prosafe has successfully implemented Covid-19 plans early to safeguard people and assets, onshore and offshore.
- Further cost and spend saving initiatives have been implemented to adapt to the new reality and to protect liquidity.
- Total liquidity reserve of USD 177.5 million per Q2 2020 (USD 241 million). The company is all else equal able to stay cash positive well beyond the next 12 months.
- The process with lenders remains constructive and lenders in general maintain their support for the company to continue to operate on a going concern basis and seek a long-term financial solution while reserving their rights. The company expects to complete the refinancing process in the second half of 2020.
- In light of impact from Covid-19 and the oil price collapse, the company continues its commercial discussions with clients relating to deferred, current and upcoming contracts. There is uncertainty related to the extent to which the order backlog will materialize in 2020, as well as to the final outcome of these negotiations.
- Recently notified that Safe Eurus will return to normal operations on 24 September 2020.
- Fleet utilisation of 6.5 per cent (71.6 per cent) in the quarter.
- Fleet enhancement continues. The process to sell Regalia for recycling has commenced.
- Firm order book of USD 122 million per Q2 2020 (USD 199 million).
- Reported EBITDA was negative by USD 10.1 million (USD 53.1 million positive) in the quarter
- The book equity was negative by USD 899.4 million as of June 2020, which was mainly resulting from the impairment made to the book value of vessels in Q1 2020.

Jesper K. Andresen, Prosafe’s CEO says, “2020 is a lost year as the Covid-19 pandemic and weak market conditions have resulted in an unprecedented low fleet utilisation, low earnings and increased uncertainty about the outlook. This came on top of an already challenging financial situation where the company has initiated discussions with its lenders for a sustainable financial solution. Prosafe has, however, successfully implemented actions to protect people and assets, revised its operating model and business plan in order to adapt and position the company through the turmoil. The process with the lenders remains constructive and progressing. Meanwhile, the company is taking every step to protect liquidity while vigorously pursuing any commercial opportunity”.


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