BW Offshore: First quarter results 2024

First quarter results 2024

HIGHLIGHTS

• Q1 EBITDA USD 86 million and operating cashflow of USD 91 million
• Equity ratio 31.1% and USD 682 million in available liquidity
• Q1 cash dividend USD 0.06 per share equivalent to USD 11 million
• Full-year 2024 EBITDA outlook maintained
• Barossa FPSO project 82% complete at end-April 2024
• Completed sale of the FPSO Polvo to BW Energy in early May
• Repurchased USD 36 million of Senior Unsecured Convertible bond
  
  
  
  

BW Offshore continues to progress the Barossa FPSO project, having achieved overall completion of 82% by the end of April, in line with the project schedule. In Singapore, integration activities are well underway with 13 out of 16 topside modules successfully lifted onboard and integrated at the end of April. Offshore Australia, the turret mooring system components have been delivered and installed on the Barossa field.

“BW Offshore delivers a quarter with strong operational performance across our FPSO fleet and good progress on the BW Opal topside integration in accordance with plan,” said Marco Beenen, CEO of BW Offshore. “We have further strengthened our financial position with the sale of shares in BW Energy and the remaining legacy assets. This provides a strong foundation for an attractive and stable quarterly cash dividend and selectively progressing growth opportunities that meet our selection criteria in a strong FPSO market.”

The shares of BW Offshore will trade ex-dividend from 28 May 2024. Shareholders recorded in VPS following the close of trading on Oslo Børs on 29 May 2024 will be entitled to the distribution payable on or about 5 June 2024.

FINANCIALS

EBITDA for the first quarter of 2024 was USD 85.5 million (USD 91.1 million in Q4). The EBITDA reflects solid operational performance across the FPSO fleet and USD 8.6 million net contribution mostly related to early works as part of securing new contracts. Fourth quarter EBITDA was positively impacted by the conclusion of the Petróleo Nautipa contract.

EBIT for the first quarter was USD 40.9 million (USD 44.3 million). A reversal of impairment of USD 1.1 million in the quarter relates to the sale of Petróleo Nautipa, which was classified as held for sale on 31 March 2024.

Net financial items were positive by USD 0.8 million (expense USD 19.4 million) of which net interest expense amounted to USD 8.7 million (USD 9.0 million). Other financial items were positive, mainly due to settlement of swap contracts in the quarter.

Share of loss from equity accounted investments was USD 2.2 million (profit of USD 17.5 million Q4) and relates to BW Offshore’s ownership in BW Energy. In January 2024, the Group sold all of its shares in BW Energy Limited at a price of NOK 32 per share, resulting in total proceeds to BW Offshore of NOK 1 860 million or USD 176.4 million. Due to currency fluctuations, a loss related to the sale was recognised in the first quarter of 2024.

Net profit for the first quarter was USD 36.8 million (USD 40.0 million).

Total equity on 31 March 2024 was USD 1 218.4 million (USD 1 195.3 million). The equity ratio was 31.1% at the end of the quarter (30.2%). Net interest-bearing debt was USD 28.2 million (USD 172.2 million).

Available liquidity was USD 681.1 million, excluding consolidated cash from BW Ideol and including USD 267.8 million available 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 100.0% (97.3% in Q4 2023).

In April, BW Offshore signed an agreement to recycle the FPSO Petróleo Nautipa in compliance with the Hong Kong International Convention at Baijnath Melaram ship recycling facility (the "Facility") in India. The sale will free up approximately USD 9 million of liquidity to the Company.

In May, BW Offshore received the remaining USD 20 million plus interest for the sale of FPSO Polvo to BW Energy, thereby completing the transaction.

OFFSHORE FLOATING WIND

BW Offshore is 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 ownership in BW Ideol. BW Ideol is a global leader in offshore floating wind technology and co-development with more than 12 years of experience from design, execution and development of floating wind projects based on proprietary and patented Damping Pool® technology and engineering capabilities.

In April, BW Ideol introduced a standardised floating foundation for mass production based on the Damping Pool® patent. The design is optimised for all metocean conditions found in the main floating wind markets and compatible with all 15 MW+ wind turbines currently available and easily scalable for 20+ MW units. The approach centres on a flexible manufacturing line capable of delivering one floating foundation per week. It is designed for scalability and replication, with minimal harbour requirements, to facilitate adaptation and growth in key markets.

OUTLOOK

BW Offshore expects that the fleet will continue to generate significant cash flows in the time ahead. Based on the contract backlog, BW Offshore maintains the guidance of reporting an EBITDA in the range USD 290-310 million for 2024.

Growing energy demand, underinvestment in production capacity and geopolitical conflicts continue to support high oil and gas prices and drive interest for developing new infrastructure-type FPSO projects. These projects typically have long production profiles, low break-even costs and focus on lower emissions. Increased project complexity, combined with inflationary pressures and higher construction costs, necessitates financial structures with significant dayrate prepayments during the construction period for new lease and operate projects. Alternatively, oil and gas majors may finance and own FPSOs, relying on FPSO specialists for the design, construction and installation scope, combined with operation and maintenance services.

BW Offshore will continue to selectively evaluate new projects that meet required return targets, offer a firm contract with no residual value risk, and provide a financeable structure with strong national or investment-grade counterparties.

BW Offshore is also actively applying its offshore engineering and operational capabilities to drive future value creation within the energy transition by developing low-carbon and clean energy production solutions. This includes exploring new ventures that target significant market opportunities emerging within gas-to-power, ammonia and carbon capture, as well as combining FPSO and floating offshore wind capabilities to grow in new, adjacent areas. BW Offshore maintains a disciplined approach with selective and diligent allocation of capital.

Please see attached the Q1 Presentation. The earnings tables are available at:

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BW Offshore will host a webcast of the financial results 09:00 (CEST) today. The presentation will be given by CEO Marco Beenen and CFO Ståle Andreassen.

Webcast information:

You can follow the presentation via webcast with supporting slides and a Q&A module, available on:

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,

About BW Offshore:

BW Offshore engineers innovative floating production solutions. The Company has a fleet of 3 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 1,200 employees and is publicly listed on the Oslo Stock Exchange.

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

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