BW Offshore: Third quarter results 2022

18 Nov 2022 07:30 CET

Third quarter results 2022

HIGHLIGHTS

* EBITDA of USD 80.4 million
* Operating cashflow USD 191.9 million
* Equity ratio 33.8% and USD 488.6 million in available liquidity
* Cash dividend of USD 0.035 per share equivalent to USD 6 million and BW
Energy shares as in-kind distribution of USD 5 million
* Barossa FPSO project progress at 50% per end of October
* Progressing towards contract award for Shell's Gato do Mato development in
Brazil
* Six-month contract extension signed for Sendje Berge

BW Offshore continues to progress the Barossa FPSO project with overall
completion being at 50% per end of October. The project has achieved 6.4 million
manhours without injuries, which reflects BW Offshore and the project partners'
commitment to safeguard people and operations. The overall project economics
remain sound, despite the impact of inflation, supply chain challenges and
design adjustments.

Shell Brasil Petróleo Ltda (Shell) and its partners have extended the limited
notice to proceed (LNTP) period with BW Offshore and Saipem S.p.A. This
extension is valid until 15 February 2023 and is related to the supply of an
FPSO for the Gato do Mato oil and gas field offshore Brazil. Terms of the
contract are in agreed form. Upon completion of the extension period, BW
Offshore and Saipem have the option to be awarded the lease and operate
contract, contingent on financing and the project reaching final investment
decision (FID). If the project reaches FID and moves forward, the FPSO lease and
operate contract will have a firm period of 18 years with seven years of
options.

"Gato Do Mato is set to become the second major FPSO project in our portfolio.
This is in line with our strategy of growing the core floating production
business through new offshore energy infrastructure projects, meeting our
investment requirements through a long-term contract, investment grade
counterparties and an attractive partnership model," said Marco Beenen, CEO of
BW Offshore.

The Board of Directors has declared a cash dividend of USD 0.035 per share and
USD 5 million of BW Energy Limited shares as in-kind distribution. Shares will
trade ex-dividend from 22 November 2022. Shareholders recorded in VPS following
the close of trading on Oslo Børs on 23 November 2022 will be entitled to the
distribution payable on or about 30 November 2022.

FINANCIALS
EBITDA for the third quarter of 2022 was USD 80.4 million (USD 75.6 million in
Q2 2022).

EBIT for the third quarter was USD 29.6 million (USD 25.8 million in Q2 2022).

Net financial items were negative by USD 3.9 million (negative USD 2.6 million
in Q2 2022). Low net financial items are mainly driven by positive mark to
market (MTM) changes in interest rate hedges as long-term interest rates have
increased during the third quarter, offsetting interest expenses. BW Offshore is
well hedged against increasing interest rates under all debt facilities.

Net contribution from BW Offshore's ownership in BW Energy was USD 7.2 million
(negative USD 4.9 million in Q2 2022). BW Energy completed one lifting in the
quarter at USD 101 per barrel.

Net profit for third quarter was USD 29.6 million (USD 12.3 million in Q2 2022).

Total equity at 30 September 2022 was USD 1,095.6 million (USD 1,077.8 million
at 30 June 2022). The equity ratio was 33.8% at the end of the quarter (35.2% at
30 June 2022).

Net interest-bearing debt was USD 463.2 million (USD 528.3 million at 30 June
2022).

Available liquidity was USD 488.6 million, excluding consolidated cash from BW
Ideol and including USD 222 million available to draw under the corporate loan
facility.

FPSO OPERATIONS
The FPSO fleet continued to deliver stable uptime in the quarter with a weighted
average fleet uptime of 99% (95% in Q2 2022).

In July, Pemex assumed the ownership and operations of Yùum K'ak' Náab in
accordance with the terms of the 15-year FPSO financial lease contract.

A short-term contract extension for Petróleo Nautipa was signed in July ahead of
demobilisation and decommissioning, which commenced in October.

In November, BW Offshore signed a six-month contract extension for the lease and
operation of Sendje Berge. The firm period has been extended to Q2 2023.

OFFSHORE FLOATING WIND
BW Offshore is actively pursuing opportunities in the energy transition. The
Company's primary investment is in offshore floating wind through the 53.2%
ownership of BW Ideol, a global market leader with more than ten years of
experience from design, execution and development of floating wind projects
based on proprietary and patented Damping Pool® technology and engineering
capabilities.

In September, BW Ideol announced a cooperation with Taiya Renewable Energy for
the joint development of floating offshore wind projects off Taiwan, initially
focused on a 50 MW pilot project. BW Ideol will design, engineer, build and
install the floating foundations based on its proven Damping Pool technology.
Subject to the project reaching final investment decision, COD (commercial
operating date) is targeted before the end of 2026, with construction expected
to start as early as 2025. The agreement also covers joint development of
several commercial-scale projects.

In Scotland, the Floating Energy Allyance (FEA), is proceeding with site
investigations and environmental studies in preparation for the consent
application process for the Buchan Offshore Wind project. During the quarter,
the alliance started near-shore testing of the lidar which will be installed to
collect wind data at the site of the planned 960 MW floating offshore wind farm
off the northeast coast of Scotland. FEA is a development partnership comprising
BayWa r.e., Elicio and BW Ideol.

OUTLOOK
BW Offshore expects the core FPSO fleet to generate significant cash flow in the
time ahead. The firm contract backlog at end of September 2022 amounted to USD
6.1 billion, including the Barossa contract. With probable options, the backlog
was USD 7.3 billion at the end of the quarter.

The war in Ukraine and the Covid-19 pandemic continue to affect global markets
through supply chain disruptions and inflation across a wide range of
commodities. The direct impact on operations from the pandemic has however
started to decrease. The higher energy prices from late 2021 and into 2022
reflect both improved market fundamentals as more nations normalise activity
levels in the wake of Covid-19, as well as concerns related to the security of
energy due to the war in Ukraine.

Oil and gas companies have become more active in progressing new field
development projects in response to higher energy prices. BW Offshore expects
continued focus on large field development initiatives with low break-even costs
and low carbon emissions. The company 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. Activity tied
to potential re-deployment projects continues with a particular focus on BW
Opportunity.

BW Ideol is BW Offshore's vehicle for investment in floating offshore wind. The
company is progressing multiple projects.

BW Offshore seeks to optimise the asset portfolio and overall cost base. This
include divestments or recycling of non-core FPSOs in line with strategy of
focusing on infrastructure FPSOs.

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 with supporting slides,
available on:
B
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fevents.webcas
t.no%2Fviewer-
registration%2FKSZdsWRi%2Fregister&data=05%7C01%7Ceric.stousland%40bwoffshore.co
m%7C470149418fde4707257208dabcc912b8%7Cd7f771bb43b44406b6cde22a0d40ab77%7C0%7C0%
7C638029869045906173%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzI
iLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=NfmskaTZu2ISK6XpYzyWqg2OYw
iZXeSpXV1iQr8pCc8%3D&reserved=0)W Offshore Webcast Q3 2022
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fevents.webcas
t.no%2Fviewer-
registration%2FKSZdsWRi%2Fregister&data=05%7C01%7Ceric.stousland%40bwoffshore.co
m%7C470149418fde4707257208dabcc912b8%7Cd7f771bb43b44406b6cde22a0d40ab77%7C0%7C0%
7C638029869045906173%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzI
iLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=NfmskaTZu2ISK6XpYzyWqg2OYw
iZXeSpXV1iQr8pCc8%3D&reserved=0)

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:
Ståle Andreassen, CFO, +47 91 71 86 55
Anders S. Platou, Head of Corporate Finance and Strategy, +47 99 50 47 40

About BW Offshore:
BW Offshore engineers innovative floating production solutions. The Company has
a fleet of 10 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

576119_2022 Q3 Presentation.pdf