Company Presentation 4Q 2012

Title Text

Earnings Presentation

Fourth Quarter 2012

CEO – Terje Sorensen

28 February 2013

Highlights Fourth Quarter 2012

• Agreed a 5-year firm contract with two yearly options for the first of the four Offshore

Subsea Construction Vessels (“OSCV”) under construction. The contract shall

commence upon delivery from the yard in third quarter 2013.

• Awarded a contract by TenneT to the wholly owned subsidiary Siem Offshore

Contractors for the supply, installation and commissioning of the 155kV grid

connection system for the Innogy Nordsee 1 Offshore Wind Farm.

• Placed order for one dual fuel Platform Supply Vessel (“PSV”) to be delivered in third

quarter 2014.

• Agreed a 2-year firm contract with two yearly options with Stork Technical Services

(RBG) Ltd. for a Multi-Role Support Vessel (“MRSV”). The contract shall commence

in direct continuation upon the expiry of the current contract in second quarter 2013.

• Declared options for a third and fourth OSCV, with scheduled deliveries in second

quarter 2014.

• Placed order for one Infield Support Vessel (“ISV”) to be utilised for project execution

within the offshore wind farm market.

2

Subsequent Events

• Placed one AHTS vessel in lay-up to reduce cost, due to the weak North Sea spot

market.

• Awarded a contract by EnBW to the wholly owned subsidiary Siem Offshore

Contractors for the installation of the 33kV inner array grid cables for the Baltic 2

Offshore Wind Farm.

• Decided to explore strategic alternatives for the subsidiary Siem WIS AS.

• Issued NOK 600 million of unsecured bonds with maturity in January 2018.

• Agreed the sale of the MRSV “Seven Sisters”.

3

Income Statement Fourth Quarter

Fourth Quarter Twelve Months Ended

Amounts in USD million

2012

Unaudited

2011

Unaudited

2012

Unaudited

2011

Audited

Operating revenue 82.0 99.7 368.2 340.6

Operating expenses ( 57.4) ( 49.9) ( 210.8) ( 182.5)

Administration expenses ( 15.5) ( 9.2) ( 47.1) ( 35.2)

Operating margin [1] 9.1 40.6 110.3 123.0

Operating margin % 11 % 41 % 30 % 36 %

Depreciation and amortisation ( 20.6) ( 21.1) ( 82.7) ( 81.3)

Gain/(Loss) on sale of assets 0.1 0.1 14.1 0.4

Gain/(Loss) FX contracts [2] 3.2 1.2 12.5 1.5

Net financial items [3] ( 1.5) ( 10.3) ( 34.8) ( 47.3)

Profit before tax ( 9.7) 10.5 19.4 ( 3.8)

Income tax provision 0.4 0.4 ( 4.0) ( 2.7)

Net Profit ( 9.2) 10.9 15.4 ( 6.5)

Attributable to non-controlling interest ( 0.7) 1.0 ( 1.9) 0.8

Attributable to shareholders of the

Company ( 8.6) 9.8 17.3 ( 7.3)

Net Profit ( 9.2) 10.9 15.4 ( 6.5)

Earnings per share [4] ( 0.02) 0.02 0.04 ( 0.02)

Average number of shares outstanding [5] 394,854 395,952 395,665 395,902

[1] Operating revenue less operating expenses

[2] Revaluation of off-balance sheet currency contracts entered into in order to hedge both operating expenditures and future yard instalments in foreign

currencies.

[3] Including revaluation of non-USD currency balance sheet items

[4] Net profit / Average number of shares outstanding (diluted)

[5] Weighted average number of shares outstanding (diluted) ('000)

Comments to Fourth Quarter Income Statement

• 100% utilization of the MRSV fleet. • All vessels on long-term charters.

• 83% utilization of the PSV fleet. • No exposure to the North Sea spot market during the quarter.

• One vessel has been off-hire the full quarter due to scheduled dry-docking and relocation from India

to West Africa.

• Three vessels have been technical off-hire for 50 days for repair and maintenance.

• One vessel demobilized from a cable-lay mode and restated to ordinary PSV mode.

• 70% utilization of the AHTS fleet. • North Sea spot market was generally weak during the quarter.

• 50% of the fleet exposed to the North Sea spot market.

• 50% of the fleet on long-term charters in Brazil.

• 76% utilization for the fleet of other Brazilian vessels. • 10 of 11 vessels on long-term charters.

• One vessel idle and one vessel in dry-dock during the period.

5

Operating Margin

Operating Margin Fourth Quarter

Q4 2012 Q4 2011

Amounts in

USD million

Operating

revenue

Operating

expenses

Operating

margin

Operating

margin %

Operating

revenue

Operating

expenses

Operating

margin

Operating

margin %

PSVs 22.5 -18.8 3.7 16 % 24.2 -11.1 13.1 54 %

MRSVs 8.9 -4.9 4.1 45 % 14.5 -6.2 8.3 57 %

AHTS vessels 25.6 -18.7 6.9 27 % 37.6 -16.8 20.8 55 %

Brazilian built vessels 6.4 -7.1 -0.7 -10 % 5.1 -6.1 -1.0 -20 %

Cable installation 0.6 -1.0 -0.4 4.2 -3.4 0.8

Scientific core drilling 12.9 -5.3 7.6 59 % 10.2 -4.4 5.8 57 %

CMS 2.5 -1.8 0.7 29 % 3.3 -1.8 1.5 45 %

Siem WIS 0.0 0.1 0.1 0.1 0.0 0.1

Other 2.5 0.0 2.5 0.5 0.0 0.5

G&A 0.0 -15.5 -15.5 0.0 -9.2 -9.2

Total 82.0 -72.9 9.1 11% 99.7 -59.1 40.6 41 %

7

Operating Margin Twelve Months

Twelve months ended 2012 Twelve months ended 2011

Amounts in

USD million

Operating

revenue

Operating

expenses

Operating

margin

Operating

margin %

Operating

revenue

Operating

expenses

Operating

margin

Operating

margin %

PSVs 91.4 -53.4 38.0 42 % 96.7 -46.2 50.5 52 %

MRSVs 49.8 -23.0 26.8 54 % 57.5 -24.1 33.4 58 %

AHTS vessels 115.0 -66.6 48.3 42 % 127.5 -64.9 62.6 49 %

Brazilian built vessels 29.1 -23.3 5.7 20 % 25.3 -23.0 2.3 9 %

Cable installation 7.8 -9.6 -1.8 4.8 -8.4 -3.6

Scientific core drilling 59.1 -28.7 30.4 51 % 16.9 -8.2 8.7 52 %

CMS 8.3 -6.1 2.2 27 % 10.1 -7.8 2.2 22 %

Siem WIS 0.2 -0.1 0.1 0.1 0.0 0.1

Other 7.6 0.0 7.6 1.8 0.0 1.8

G&A 0.0 -47.1 -47.1 0.0 -35.2 -35.2

Total 368.2 -257.9 110.3 30 % 340.6 -217.7 123.0 36 %

8

• Preparations for the Amrumbank West Offshore Wind Farm project well underway.

Offshore phase in 1H 2014

• Recently awarded two contracts within the renewable energy market

• Joint contract with J-Power Systems Corporation (“JPS”) for the Innogy Nordsee 1

Offshore Wind Farm Project

• Baltic 2 Offshore Wind Farm project by EnBW Baltic 2 GmbH

• Strong development in 2012 with total backlog to be executed next 48 months at

approx. USD 180 million

• Continue to tender for other projects within the Offshore Wind Farm market

• Placed order for Infiled Support Vessel (“ISV”) for utilization during project execution

Siem Offshore Contractors - Submarine power cable activities

9

Siem WIS

• Siem WIS is preparing for the Gullfaks operation, which is planned to commence in

second quarter 2013.

• Siem WIS is also in discussions for other projects for utilisation of the pressure

control device (“PCD”).

• The shareholders of Siem WIS consider that the company has reached the phase

of technology development where strategic alternatives for the company shall be

explored. The shareholders haves engaged an advisor to assist in this process.

10

Financial Position and Cash Flow

Statement of Financial Position

31 December

2012

Unaudited

31 December

2011

Audited

Intangible assets 36.3 35.7

Vessels under construction 108.4 105.2

Vessels, equipment and other 1,272.3 1,428.1

CIRR loan deposits 53.2 56.5

Investment in associates and other long-term receivables 11.3 11.9

Debtors, prepayments and other current assets 149.9 85.4

Cash and cash equivalents 107.1 136.6

Total Assets 1,738.5 1,859.4

Total Equity 786.5 769.8

Borrowings falling due after 1 year 714.7 839.0

CIRR loan 53.2 56.5

Other non-current liabilities 24.3 34.3

Borrowings falling due within 1 year 82.3 95.5

Trade creditors and other current liabilities 77.5 64.4

Total Liabilities 951.9 1,089.6

Total Equity and Liabilities 1,738.5 1,859.4

Amounts in USD million

* Current cost of debt approximately 4%

12

Consolidated Statements of Cash Flows

Cash flow from operations

31.12.2012

Unaudited

31.12.2011

Audited

Profit before taxes, excluding interest 47.9 34.8

Interest paid (36.7) (29.1)

Depreciation and amortization 82.7 81.3

Change in short-term receivable and payables 21.7 5.5

Taxes paid in the period (13.9) (2.4)

Loss (gain) on sale of assets (13.7) (0.1)

Other changes (17.6) (3.8)

Net cash flow from operations 70.5 86.3

Cash flow from investing activities

Investments in fixed assets (53.4) (208.0)

Proceeds from sale of fixed assets 87.6 1.2

Investment in subsidiaries 0.0 (22.5)

Other investment activities 5.1 10.0

Cash flow from investing activities 39.4 (219.4)

Cash flow from financing activities

Buyback of own shares (2.7) 0

Proceeds from bank overdraft 2.6 0

Proceeds from issue of new equity 3.5 12.3

Proceeds from raising of new long-term borrowing 8.8 327.4

Repayment of long-term borrowing (161.8) (190.8)

Cash flow from financing activities (149.8) 148.9

Effect of exchange rate differences 10.3 5.6

Net change in cash (29.6) 21.5

Cash at bank start of period 136.6 115.2

Cash at bank end of period 107.1 136.6

Siem Offshore – Debt Maturity profile

14

• Scheduled balloon payment (re-financing) of 6 AHTS vessels in 2015 can be

postponed to 2018 subject to profile of vessel employment.

• NOK 600 million of unsecured bonds with maturity in 2018.

• The debt maturity profile reflects debt repayment in relation to the sale of the MRSV

“Seven Sisters”.

Vessels in Operation and Shipbuilding Contracts

Employment and Deliveries

Fleet overview - 37 vessels in operation and 10 vessels under construction

1) Incl. two vessels owned by a partner 2) Seven Sisters agreed sold to Subsea 7 Inc.

PSV (3,300 – 4,700 dwt)

16

# 11

# 32)

OSCV AHTS

Core Drilling Vessel

# 1

# 11

Smaller Brazilian vessels Well stimulation vessel

# 1

# 101)

Vessels in operation Vessels under construction (Delivery 2013 and 2014)

# 2

OSRV OSCV

# 4

PSVs

# 3

ISV

# 1

Employment – Vessels in operation

2013 2014 2015 2016

Vessel Type Ownership 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Siem Sasha PSV 100 %

Siem Sophie PSV 100 %

Siem Louisa PSV 100 %

Siem Hanne PSV 100 %

Siddis Skipper PSV 51 %

Siem Carrier PSV 100 %

Siem Supplier PSV 100 %

Hugin Explorer PSV 100 %

Siem Sailor PSV 51 %

Siem Pilot PSV 51%

Siddis Mariner PSV 51%

Seven Sisters OSCV 100%

Siem Marlin OSCV 100%

Adams Vision OSCV 100%

Siem Pearl AHTS 100%

Siem Emerald AHTS 100%

Siem Sapphire AHTS 100%

Siem Aquamarine AHTS 100%

Siem Ruby AHTS 100%

Siem Topaz AHTS 100%

Siem Diamond AHTS 100%

Siem Amethyst AHTS 100%

Siem Garnet AHTS 0%

Siem Opal AHTS 0%

Total order backlog in % and USD mill. 54% 172 33% 124 9% 8 7% 22

Contract Contract option Spot work

17

Employment – Vessels in operation (cont.)

2013 2014 2015 2016


Big Orange XVIII WSV 41 %

Joides Resolution SPV 100 %

Total order backlog in % and USD mill. 87% 22 4% 0.3 0% 0 0% 0

Marati OSRV 100 %

Marabá OSRV 100 %

Parnaiba FSV 100 %

Propriá FSV 100 %

Paracaru FSV 100 %

Capela FSV 100 %

Parati FSV 100 %

Siem Piatã FCV 100 %

Siem Pendotiba FCV 100%

Siem Caetes FSP 100%

Siem Carajas FSP 100%

Total order backlog in % and USD mill. 76% 19 55% 14 36% 9 36% 9

Contract Contract option Spot work

18

Employment – Vessels under construction

2013 2014 2015 2016


Brazil, Siem Maragogi OSRV 100 %

Brazil, Siem Marataizes OSRV 100 %

Brazil Siem Atlas PSV 100 %

Brazil Siem Giant PSV 100 %

Norway, Siem Daya 1 OSCV 100%

Norway, Siem Barracuda OSCV 100%

Norway, ”TBN” OSCV 100%

Norway, TBN” OSCV 100%

Norway, ”TBN” ISV 100%

Norway, TBN” PSV 100%

Under Construction Contract

Contract USD 94 million



Contract option


19

Market outlook

Market Outlook Summary

• Current and near term North Sea market for AHTS vessels and PSVs:

• The North Sea spot market for PSVs and AHTS vessels were generally weak during the fourth

quarter of 2012, both in terms of spot market fixture rates and utilization.

• A temporary increase in spot market fixture rates for AHTS vessels was observed in the beginning

of 2013, due to increased rig move activity, weather conditions and fewer vessels available for spot

work.

• The number of AHTS > 15k bhp in the North Sea has gradually decreased from year end 2011, but

an increasing share is operating in the spot market.

• Activity and number of working rigs expected to increase based on firm contracts for new rigs

entering the North Sea.

• Long term Global demand for OSCVs:

• Based on an increasing number of subsea wells and installations the activity level is expected to be

high.

• Long-term North Sea demand for AHTS vessels and PSVs:

• Increased exploration, field development and number of fields on stream is expected to lead to

further demand for both high-end AHTS vessels and PSVs.

• Long-term Global demand for AHTS vessels and PSVs:

• Favorable outlook in Brazil based on firm contracts for Rigs, FPSOs and Subsea projects.

• Increasing demand in US GoM, West Africa and Oceania, especially on drilling support.

• Prospects for harsh and/or remote areas (Barents Sea, Canada, US Alaska, Brazil).

21

Global Rig and FPSO Market

© Siem Offshore, ODS Petrodata

• Total # UDW Drilling rigs currently working at 116, up from 92 twelve months ago (-12M).

• Total # North Sea Floater Rigs currently working at 39, up from 34 twelve months ago (-12M).

• Total # Floater Rigs currently working in Brazil at 74, up from 67 twelve months ago (-12M).

• Total # FPSOs currently working/under construction at 191, up from around 174 twelve months

ago (-12M).

• New demand added from FSRU/FLNG units.

• Continue to see increased activity going forward for both Drilling, FPSO and Subsea.

Global Drilling Market Global FPSO market

* = Ultra Deep Water (UDW)

Under Construction

Working

22


• Global Term Demand utilization AHTS > 15k bhp

currently approximately 75%.

• Around 92% excluding North Sea.

• Global term demand slightly down Y/Y, mainly due

to lower term demand for construction, drilling and

production support in the North Sea, temporary

pause in Brazil, no Greenland Drilling in 2012

• Increased drilling and production support

activity Y/Y in West-Africa, as well as drilling

support in Oceania and production support in

the Mediterranean

• Global Term Demand utilization PSV > 3,000 dwt

currently at approximately 87%.

• Strong demand growth Y/Y in all major regions,

especially US GoM, West Africa and Oceania

• Drilling support activity in US GoM up +20%

Y/Y.

• Increased fields on stream going forward is

expected to increase demand in the longer term.

• More than 200 vessels planned for delivery by

end of first half 2014.

Global AHTS and PSV Market - Demand flat last twelve months

23

North Sea AHTS and PSV Fleet

• The number of AHTS > 15k bhp in the North Sea

has gradually decreased from year end 2011.

• The last couple of months several vessels have

mobilized for other regions.

• A relative large share of the AHTS > 15 bhp North

Sea fleet is operating in the spot market.

• Lower term demand for construction, drilling and

production support than 12 months ago.

• 3 to 5 AHTS>15K bhp vessels under construction

could enter the region in 2013.

* Spot Fleet = Total Fleet – Term Demand

• Number of PSV> 3,000 dwt working in the North

Sea has stabilized around 205 vessels.

• Term demand up approx. 8% year-on-year, but

increased supply of vessels puts pressure on fixture

rates.

• Prevailing uncertainty in the markets ability to

absorb the increased supply of PSVs in

short/medium term.

• Another 30+ vessels to be delivered next 18

months.


24

• The number of semis and drillships working in the

North Sea at 39 units, up from year end due to rigs

returning from yard and new rigs entering the

market.

• Number of floaters in the North Sea expected to

increase >40 in 2013 based on firm contracts.

• More than 10 new floaters expected to enter the

North Sea in the period 2013 -16.

• The number of Jack-Ups working in the North Sea

is currently at 40 units.

• Close to 10 jack-ups under construction set to enter

the North Sea in the period 2013-2015 based on

firm contracts.


Demand: North Sea Rigs working - New rigs ready to enter the North Sea

+3 rigs y/y

+3 rigs y/y

25


• The Global Fleet of ROV/MSV/DSV Offshore

Construction Vessels >120m DP2+ has grown by

around 25 vessels from 2007 to YE 2012 to around

40 vessels (excluding Pipelay/Derrick Pipelay).

• Several new vessels ordered in 2012 and 2013, with

a majority to be delivered during 2014 and H1 2015

• Fleet will grow with minimum 50% the next 3 years

based on the current firm vessel orders at yards.

• Global number of X-mas Tree installations as a

leading indicator to this vessel segment will grow

by up to 90% (IHS Petrodata) by year end 2015.

• Increasing number of X-mas Trees installed is

expected to create a growing market for IMR

services.

• Balanced supply/demand characteristics for the

period 2013 to 2015.

Offshore Construction Vessel (OCV) market

Global Fleet ROV/MSV/DSV vessels > 120m Global X-mas Tree installations

+35-90%

26

Company Presentation 4Q 2012

Documents

Transcript of Company Presentation 4Q 2012