A N N U A L R E P O R T
2 0 1 5
1
This report
is a short version
of the annual
report.
For a full report, including a presentation of executive
management and board of directors, information about HSEQA,
corporate governance, social responsibility, risk management and
financial and analytical information, please refer to the Download
centre on Prosafe’s website www.prosafe.com.
In order to present updated and correct information at all times,
we will endeavour to update the information on the website
whenever required throughout the year.
2
CONTENT
5
6
8
24
Financial calendar and key figures
About Prosafe
Directors’ report
Statement of the member of
the board of directors and other
responsible persons
26
Consolidated accounts
70
Accounts Prosafe SE
88
Independent auditors’ report
92
Fleet overview
3
4
FINANCIAL CALENDAR
REPORTING RESULTS
The following dates have been set for quarterly interim reporting and presentations in 2016:
1st quarter
2nd quarter
3rd quarter
4th quarter
12 May 2016
24 August 2016
3 November 2016
9 February 2017
ANNUAL GENERAL MEETING
The AGM for Prosafe SE will be held in the company’s premises at Stadiou 126, CY-6020 Larnaca,
Cyprus on 25 May 2016.
KEY FIGURES
Profit
Operating revenues
EBITDA
Operating profit
Net profit
Earnings per share
Balance sheet
Total assets
Interest-bearing debt
USD million
USD million
USD million
USD million
USD
USD million
USD million
Note
2015
2014
2013
2012
2011
474.7
262.9
30.8
(50.6)
548.7
312.6
248.3
178.8
523.5
306.6
245.1
199.1
510.4
280.1
222.4
177.5
449.6
257.6
192.3
158.0
0.21
0.76
0.85
0.80
0.71
1
2
2 187.2 1 816.8 1 619.9 1 487.2 1 376.1
1 107.5
830.1
707.7
748.5
779.6
666.2
739.7
810.4
706.8
516.3
760.5
667.1
461.8
4
32.6 % 41.2 % 45.7 % 34.7 % 33.6 %
Net interest-bearing debt
USD million
3 1 150.4
USD million
715.2
Book equity
Book equity ratio
Valuation
Market capitalisation
USD million
Share price
NOK
619
725
21.00
23.00
1 816
46.80
1 894
47.32
1 529
40.99
1. Operating profit before depreciation
2. Net profit / Average number of outstanding and potential shares
3. Interest-bearing debt - Cash and deposits
4. (Book equity / Total assets) * 100
5
ABOUT PROSAFE
Prosafe is the world’s leading owner and operator of semi-
submersible accommodation vessels. The company operates
globally and employed 851 people at year-end.
6
With eight dynamically positioned, one
POSMOOR passive position moored and five
anchored vessels, our fleet is versatile and able
to operate in nearly all offshore environments.
At present, Prosafe is the leader
in the provision of offshore
accommodation vessels in harsh
and semi-harsh environments
and in hurricane regions such
as the Gulf of Mexico.
The company’s
track record comprises
operations offshore
In addition, one new
harsh environment
semi-submersible is under
construction at COSCO
(Qidong) Offshore Co. Ltd.
Norway, UK, Mexico, USA,
Brazil, Denmark, Tunisia, West
Africa, North-West and South
Australia, the Philippines
and Russia.
storage capacity offshore. Prosafe’s vessels
have accommodation capacity for 306-812
people and offer high quality welfare and
catering facilities, storage, workshops, offices,
medical services, deck cranes and lifesaving
and fire fighting equipment. The vessels are
positioned alongside the host installation
and are connected by means of a telescopic
gangway so that personnel can walk to
work.
Prosafe has a strong track
record from demanding
operations world wide,
with first class operational
performance and good safety
results. The company has
extensive experience from
operating gangway connected
to fixed installations, FPSOs,
TLPs, Semis and Spars.
Prosafe’s operations are amongst
other related to maintenance and
modification of installations on fields already
in production, hook-up and commissioning of
new fields, tie-backs to existing infrastructure
and decommissioning.
The company’s track record comprises
operations offshore Norway, UK, Mexico, USA,
Brazil, Denmark, Tunisia, West Africa, North-
west and South Australia, the Philippines and
Russia.
Accommodation vessels offer additional
accommodation, engineering, construction or
Prosafe is listed on the Oslo Stock Exchange
with ticker code PRS.
7
DIRECTORS’ REPORT
The Directors present their annual report on the affairs of
Prosafe SE (the “Company” or the “parent company”) and its
subsidiaries (the Company and its subsidiaries referred to as
the “Group” or “Prosafe”) together with the Group’s and the
parent company’s audited financial statements for the year
ended 31 December 2015.
8
PRINCIPAL ACTIVITY
the yard stay for the Safe Scandinavia where
Prosafe is the world’s leading owner and
she was undergoing conversion to a tender
operator of semi-submersible accommodation
support vessel (TSV) at Ølensvåg in Norway. The
support vessels, and is currently in process of
vessel is now on contract for Statoil Petroleum
completing its fleet renewal strategy which
AS at the Oseberg Øst field on the Norwegian
further aims at strengthening its competitive
Continental Shelf. The main markets for the
position globally. The parent company, Prosafe
Prosafe vessels are currently the North Sea and
SE, is managed and controlled in Cyprus and is
Brazil, serving primarily oil and gas operating
the ultimate owner of all group companies.
companies as end clients on projects typically
Financial results,
financing and
financial position of
the Group
(The figures in brackets correspond to the 2014
comparatives)
related to installation or maintenance and
modification of offshore oil and gas fields. The
vessels are either provided on a time charter
basis where Prosafe man and operate the
vessels directly, or on a bareboat basis where
Prosafe provides only the vessel to a third party
who is then responsible to man and operate
the vessel.
Total operating expenses decreased to USD
211.8 million (USD 236.1 million), largely as a
result of the lower fleet utilisation.
INCOME STATEMENT
Depreciation increased to USD 86.5 million
Operating revenues totalled USD 474.7 million
(USD 64.3 million) as a result of life extension
in 2015 (2014: USD 548.7 million), with
investments of several vessels, as well as the
utilisation of the fleet dropping to 70 per cent
delivery of the new build Safe Boreas in Q1
(87 per cent). Charter revenues and non-charter
2015. In addition, there was an impairment
revenues reached USD 425.4 million (USD
charge of USD 145.6 million in the 2015
481.2 million) and USD 49.3 million (USD 67.5
accounts related to Jasminia, Safe Hibernia,
million), respectively.
Safe Britannia, Safe Regency, Safe Lancia, Safe
Bristolia, Safe Astoria and Safe Concordia.
Revenues in 2015 were lower than in 2014 as
Compared to the Q4 2015 report published on
a consequence of fleet utilisation of 70% in
4 February 2016, the final accounts for 2015
2015 compared to 87% in 2014. This compares
contain an additional impairment charge of
to an average fleet utilisation of just over 80%
USD 136.2 million.
over the last few years. The main reason for the
reduction in utilisation was non-extension of
The resulting operating profit amounts to USD
the contract relating to Jasminia in Mexico and
30.8 million (USD 248.3 million).
9
Net interest expenses totalled USD 41.6 million
the Safe Concordia.
(USD 37.3 million). This increase is mainly
due to higher interest-bearing debt following
As at year-end 2015, the Group had total
the delivery and financing of the new build
liquid assets of USD 57.1 million (USD 122.4
Safe Boreas in 2015. In accordance with IFRS,
million). The liquidity reserve (liquid assets plus
interest costs totalling USD 12.8 million (USD
undrawn credit facilities) totalled USD 157.1
7.9 million) have been allocated to new build
million (USD 337.4 million).
and refurbishment projects and consequently
capitalised as part of the vessel investment
costs.
Other financial items amounted to USD -29.5
million (USD -20.0 million). This figure includes
changes in value of financial currency hedging
instruments and currency gains and losses. The
figure also includes USD 12.8 million in amor-
tised borrowing costs related to the new builds.
Taxes for 2015 were USD 10.5 million (USD 12.5
million).
Net loss amounted to USD 50.6 million (net
profit of USD 178.8 million), resulting in basic
and diluted earnings per share of USD -0.21
(USD 0.76).
ASSETS
Total assets amounted to USD 2,187.2 million
(USD 1,816.8 million) at the end of 2015.
Investments in tangible assets totalled USD
700.7 million (USD 211.0 million). The
investments in 2015 mainly relate to the
delivery of the new build Safe Boreas, upgrade
of the Safe Scandinavia to a tender support
vessel (TSV), project expenses related to three
new build vessels and the five-year special
periodic survey (SPS) for the Safe Bristolia and
FINANCING
Total shareholders’ equity amounted to USD
715.2 million (USD 748.5 million), resulting in
a book equity ratio of 32.7 per cent (41.2 per
cent).
Interest-bearing debt amounted to USD 1,247
million (USD 830.1 million) at year-end.
Repayments of debt totalled USD 816.5 million
(USD 198.0 million) and gross increase in
borrowing amounted to USD 1,290.0 million
(USD 332.2 million).
The interest-bearing debt agreements are
subject to termination, repayment or buy back
clauses in the event of a change of control
of the Company (as control is defined in the
relevant agreements).
In February 2015, the Company secured a
new credit facility of USD 1,300 million for
the refinancing of the existing USD 1,100
million and USD 420 million credit facilities.
The credit facility, which has a maturity of
seven years with semi-annual amortisations
of USD 65 million, consists of two term loan
tranches totalling USD 800 million (drawn on
closing) and USD 200 million and a revolver
loan tranche of USD 300 million. The USD 200
10
million tranche was drawn on delivery of the
Safe Britannia came off contract at the end of
Safe Zephyrus in January 2016.
2015. Safe Hibernia came off contract on 15
February 2016, whereas the contracts for Safe
In December 2015, Prosafe raised NOK 590
Regency and Safe Lancia were suspended from
million in a private placement of shares. The
mid-March 2016.
private placement was over-subscribed and
supported by existing shareholders.
Safe Concordia operated on a three-year
contract in Brazil throughout the year.
The contract, which is an extension of the
initial contract awarded in December 2013,
commenced in July 2014 with a three-year
term.
Safe Astoria was on an 11-month contract with
Shell Philippines Exploration B.V. until early
September 2015, after which she relocated to
Batam, Indonesia, for lay-up.
Safe Caledonia was contracted to Nexen
Petroleum U.K. Limited until the end of April
2015. In early July 2015 the vessel commenced
a contract for BP Exploration Operating
Company Limited for support at the ETAP field
in the UK. The vessel is scheduled to complete
this contract in early August 2016.
Safe Scandinavia was on contract with Premier
Oil UK Limited at the Solan field in the UK until
the end of February 2015. In March the vessel
arrived at the Westcon shipyard in Ølensvåg,
Norway, where she has been undergoing
conversion to a tender support vessel (TSV) to
carry out a contract for Statoil Petroleum AS at
the Oseberg Øst field in Norway. The contract
commencement which was originally expected
during the third quarter 2015 was considerably
delayed until 17 March 2016. As a result the
cost for the TSV conversion has increased.
11
Operations and
projects
As at year-end, the fleet comprised 12 vessels in
operation plus three new builds in progress.
Specifications for each of the vessels and
details of the current vessel contracts can be
found on the Company’s website at
www.prosafe.com/accommodation-vessels
Safe Hibernia, Safe Britannia, Safe Lancia and
Safe Regency operated on bareboat charters
in Mexico throughout 2015. Jasminia was
off-hire as from the end of February 2015 and
Regalia was on a 450-day contract for Talisman
Ivar Aasen in late July 2016.
Sinopec Energy UK Limited in the UK until
late November 2015 and was sub-let to Shell
In 2013 a turnkey contract was entered into
U.K. Limited at Shearwater and Premier Oil UK
with COSCO (Qidong) Offshore Co., Ltd. in China
Limited at Solan during the 450 days period.
for the delivery of two accommodation support
In late May 2016, the vessel will commence a
vessels, Safe Notos and Safe Eurus, for use
150-day contract with Shell at Brent C/Gannet.
worldwide, excluding Norway. The vessels are
designed and equipped to meet the
Safe Bristolia completed repair work at the
requirements of the accommodation industry
Hanøytangen shipyard in Norway during the
and will be the leading vessels in their sector.
second quarter 2015 and was on contract for
Safe Notos was delivered in February 2016, and
BG International Limited at the Everest field in
is currently in transit to Indonesia for lay-up.
the UK from the beginning of June 2015 until
Her first contract is yet to be awarded.
the end of the third quarter 2015. The vessel is
currently undergoing a special periodic survey
In addition to the new builds, the Group has
in Gdansk, Poland.
also invested substantially in the renewal of the
existing fleet over the past years.
Prosafe had two vessels under construction in
Singapore during 2015, Safe Boreas and Safe
Zephyrus, which were ordered from Jurong
Shipyard Pte. Ltd in December 2011 and
November 2012, respectively. The vessels were
constructed in accordance with strict
Norwegian regulations and are the most
well-equipped and sophisticated offshore
accommodation support vessels in the world.
Safe Boreas was delivered from the yard in
mid January 2015 and has completed its first
contract for Lundin Petroleum Norway AS in
Norway. The vessel commenced an 8-month
contract with Talisman Sinopec at Montrose in
mid-March 2016.
Safe Zephyrus was delivered in January 2016,
and is currently in transit from Singapore to
Norway. The vessel is scheduled to commence
the contract with Det Norske Oljeselskap at
OUTLOOK
The accommodation support segment is late
cyclical by nature. Historically, more than
three quarters of the work has been related to
producing fields, whereas the remainder has
been related to hook-up and commissioning of
new fields. Accommodation support vessels are
also used during decommissioning of offshore
installations.
The supply side is seeing significant growth in
size during the period from 2012 to 2016 with
the entry into the market of a number of new
semi-submersible accommodation support
vessels. However the growth is expected to be
lower than earlier anticipated as a result of the
extended down-cycle which may lead to both
scrapping and delays or even cancellations of
new builds.
12
2015 saw a continued slow-down in
Despite the current down-turn and the supply
contracting activity and the gross value of
side growth, the longer term prospects are
charter contracts, including clients’ extension
promising as it is expected that field life
options, was reduced by approximately 13 per
extensions continue through enhanced oil
cent to USD 1,595 million (USD 1,843 million).
recovery efforts. Further, in the years ahead
A continued fall in oil price has led to further
new fields will come on stream in parallel with
negative revisions of spending plans, which
decommissioning of old platforms gradually
again results in deferral of several projects,
becoming an interesting source of demand.
as well as focus on cash preservation by
way of contract renegotiations and contract
In Mexico, Prosafe’s ultimate client Pemex has
cancellations.
been cutting spending in order to adjust its
budget to an oil price of USD 25 per barrel.
As all providers of oil services are dependent
This development has considerably increased
on oil companies’ cash flow, reductions of
uncertainty
spending plans have led to a substantial
decrease in demand for oilfield services,
including accommodation support vessels.
This has increasingly been evident in all
geographical markets.
13
for the near and medium term outlook in this
combined with in particular the non-extension
region. It is still expected that maintenance and
of contracts in Mexico has led to reduced fleet
modification services will be needed to support
utilisation and consequently reduced charter
extended production from current fields. In
revenues for Prosafe.
addition, further demand may result from
new fields being developed in deeper waters
offshore Mexico.
The near and medium term outlook is also
uncertain in Brazil. Even though
accommodation support vessels are mostly
Total order backlog as of 31 December 2015
amounted to USD 997 million of which USD
598 million related to firm contracts and
USD 399 million related to options. Secured
utilisation for 2016 is 37%. For 2017 and 2018,
secured utilisation is currently 19% and 16%,
used for safety and maintenance purposes on
respectively.
fields that are already producing, the financial
situation of Petrobras has inevitably resulted
in reduced activity and as a result cancellation
or renegotiation by Petrobras of contracts to
preserve liquidity. The longer term outlook
is, however, expected to present further
opportunities.
Outside the three core markets for
semi-submersible accommodation vessels i.e.
the North Sea, Mexico and Brazil, Australia
and the US Gulf of Mexico appear to be the
most promising markets. Although in the past,
demand in both these markets has mostly
been related to hook-up and commissioning
of new platforms or larger re-developments,
in the longer term as the industry normalises
there should be potential for growth related to
maintenance and modification.
Accordingly, Prosafe remains cautious
about the near and medium term, and will
continue to work proactively to ensure the
best possible long-term outcome for Prosafe
and its employees, shareholders, clients and
lenders. The general down-turn in the market
FINANCIAL RESTRUCTURING
In 2015 and in early 2016, various measures
have been taken to improve the Company's
financial situation and continuous efforts are
ongoing. As described in the Financing section
above a share issue was implemented late 2015
and in January 2016 the Company achieved i.a.
additional headroom to financial covenants in
bank facilities and bond loans and the option to
voluntarily skip two scheduled amortisations in
2016 and/or 2017. Further information on the
revised set of covenants is provided in note 15
to the consolidated financial statements. As of
the date of the accounts, the Company is not in
breach of any of its financial obligations.
Since the publication of the Q4 2015 report
in February 2016, the offshore market has
continued to develop negatively, leading to
the sudden suspension of two contracts in
Mexico. As a result, some of Prosafe’s financial
covenants have been put under pressure.
Specifically, there was a material risk that the
14
Company would breach the minimum liquidity
Group’s management.
covenant of USD 65 million in the second
quarter of 2016. On 22 April 2016, Prosafe was
The Company aims to create shareholder value
granted a waiver of this liquidity covenant.
by allocating capital and resources to the
The temporary minimum liquidity covenant is
business opportunities that yield the best
now USD 20 million until the end of the third
return relative to the risk involved within its
quarter of 2016, and is applicable to both the
specified strategic direction.
USD 1.3 billion facility and the USD 288 million
new build facility. Prosafe has initiated a review
Prosafe seeks to reduce its exposure to
of the Company’s funding situation and has
operational, financial and compliance related
engaged financial and legal advisors to assist
risk through proper operating routines, the use
with this process.
of financial instruments and insurance policies.
A dialogue has been commenced with the
Market risk comprises of macro factors such
Company’s key stakeholders, including the
as oil price and industry specific factors such
senior lenders, and the Company is currently
as supply/demand balance and competitive
working with stakeholders and advisors to
position. Demand for accommodation units is
evaluate alternatives to improve the financial
sensitive to oil price fluctuations and changes
situation of the Company. Amendments to the
in exploration and production spending.
bank and bond agreements will be required in
order to secure a robust financial
The Gulf of Mexico contracts contain a
foundation and to safeguard and further
cancellation clause allowing the ultimate
strengthen Prosafe’s market leading position in
customer, Pemex, to cancel the contract upon
the industry. The Company intends to
30 days notice, without compensation, if the
communicate its financial plan during the
financing of the project is cancelled. These
second quarter of 2016.
clauses reflect the crisis that arose in Mexico
RISK
during the 1980s. In March 2016, the two
remaining contracts in Mexico were suspended,
and accordingly, may be cancelled due to the
Prosafe categorises its primary risks under
ongoing downturn.
the following headings: strategic, operational,
financial and compliance related. The
The Company is exposed to financial risks such
Company’s Board and senior officers manage
as currency risk, interest rate risk, financing
these risk factors through continuous
reporting, board meetings, periodic reviews of
the business and tenders, and rolling strategy
and planning processes. This is supplemented
by dialogue and exchange of views with the
and liquidity risk and credit and counterparty
risk. The continued negative development in
the offshore market involves risk that reduced
charter revenues will continue in the short and
medium term. This development has increased
15
the liquidity risk significantly. The Company has
Financial restructuring section above and the
significant debt maturities in 2016 and 2017,
Going concern section below.
though as mentioned in the Financing section
above, in January 2016, the Company agreed
The maturity of the Group’s liabilities and
with its banking syndicate on an option to
capital commitments related to the new builds
voluntarily skip two scheduled amortisations
can be summarised as follows. (Figures in USD
arising in 2016 and/or 2017. Please refer to the
million).
Q1 2016
Q2 2016
Q3 2016
Q4 2016
84.5
19.9
17.8
122.2
410.0
0.0
17.5
0.0
17.5
0.0
55.0
17.5
0.0
72.5
180.0
0.0
19.6
0.0
19.6
0.0
2016
Debt repayments
Interests
Current liabilities
Total 2016
Capital commitments
2017
Debt repayments
Interests
Current liabilities
Total 2017
2018
Debt repayments
Interests
Current liabilities
Total 2018
2019
Debt repayments
Interests
Current liabilities
Total 2019
2020 onwards
Debt repayments
Interests
Current liabilities
Total 2020 onwards
16
139.5
74.5
17.8
231.8
590.0
210.8
84.4
0.0
295.2
233.5
85.0
0.0
317.4
233.5
81.3
0.0
318.5
429.7
146.4
0.0
576.1
The Company reports in USD and generates
reinforced inter alia, by the organisation and
income in USD, whereas parts of its operating
the competence of its personnel, segregation
costs are in other currencies such as NOK and
of duties, regular risk assessments and internal
GBP. This exposure is hedged on a 50-75% basis
reporting, management meetings, board
of estimated currency exposure on a 12-month
meetings, internal audit committee and
basis using currency forward instruments. The
internal audits together with external audit
interest rate risk is partly hedged by the use of
and public reporting and communication.
interest swaps for 75-100% of the debt. This is
carried out on the basis of a perfect match and
hedge accounting basis so that any
mark-to-market effects are accounted for via
comprehensive income and straight to equity.
The Company carries out credit checks on
clients as part of its tendering processes and
has a history of minimal loss from debtors.
There are no material overdue receivables as
of year-end. Further information on financial
risk management is provided in note 19 to the
consolidated financial statements.
An account of the main features of Prosafe’s
internal control and risk management systems
is available on its website www.prosafe.
com/risk-management/risk-management-
article1496-894.html.
INTERNAL CONTROLS
Internal control is effected in accordance with
HEALTH, SAFETY AND THE ENVIRONMENT
(HSE)
Robust HSE performance is fundamental to
all of Prosafe’s operations and is therefore
reflected in its core values. As a consequence,
Prosafe works proactively and systematically to
reduce injuries and sickness absence.
During 2015, Prosafe recorded four lost time
injuries (LTI) (i.e. an incident that resulted in
the employee being absent from the next work
shift). This translates into an LTI frequency rate
of 3.3 for 2015, compared to 2.6 in 2014. The
LTI frequency is calculated by multiplying the
number of LTIs by 1 million and dividing this by
the total number of man-hours worked.
Prosafe operates a zero accident mind-set
philosophy which means that no accidents or
serious incidents are acceptable. Over the past
Prosafe’s policies and procedures which aim to
years, it has focused on preventive measures
ensure the effectiveness and efficiency of its
and a number of initiatives have been
operations, reliability of its financial reporting
implemented in order to further strengthen the
and compliance with applicable laws and
safety culture. These initiatives will be
regulations. These policies and procedures are
continuously developed in order to improve
designed, inter alia, to safeguard assets and
safety performance further.
protect from accidental loss or fraud.
Sick leave decreased from 3.0 percent in 2014
In addition, the policies and procedures are
to 2.45 per cent in 2015.
17
Prosafe had no accidental discharges to the
orientation, with respect to recruitment,
natural environment in 2015 and continues
remuneration or promotion.
to actively reduce emissions by investment in
more modern and fuel efficient equipment
and continuous improvement in operating
procedures.
HUMAN RESOURCES AND DIVERSITY
CORPORATE GOVERNANCE
Corporate governance in the Company is based
on the principles contained in the Norwegian
Code of Practice for Corporate Governance
of 30 October 2014. There are no significant
Prosafe’s workforce consisted of 851 individuals
deviations between the Code of Practice
at the end of 2015, compared with 796 in the
and the way it has been implemented. The
previous year. Prosafe’s global presence was
reflected in the fact that its employees came
from 28 countries around the world. The
Company’s full corporate governance report is
set out on Prosafe’s website www.prosafe.com/
norwegian-code-of-practice/category32.html.
overall workforce turnover in the group was 7.8
Significant shareholdings are presented in note
per cent in 2015, as compared to 8.0 percent
14 to the financial statements and on www.
in 2014.
prosafe.com/largest-shareholders/category160.
Prosafe operates an equal opportunity policy
html.
including gender equality. Men have, however,
By displaying robust corporate governance,
traditionally made up a greater proportion of
the recruitment base for offshore
operations, and this is reflected in Prosafe’s
gender breakdown. As of 31 December 2015,
women accounted for 13.0 per cent of the
the Company aims to strengthen confidence
in Prosafe among shareholders, the capital
market and other interested parties, and will
help ensure maximum value creation over time
in the best interest of shareholders, employees
overall workforce, compared to 12.9 per cent in
and other stakeholders.
2014. Onshore the proportion of women was
43.4 per cent, as opposed to 44.1 per cent in
2014.
Women constituted 12.0 per cent of the
managers as at 31 December 2015, as opposed
to 14.6 per cent at the end of 2014.
The members of the Board of Directors at 31
December 2015 and at the date of this report
are set out on page 25. Except for Harald
Espedal and Glen Ole Rødland, referred to
below they were all members of the Board of
Directors throughout the year. There were no
significant changes in the assignment of the
Prosafe aims to offer the same opportunities
responsibilities of the members of the Board of
to all and there is no discrimination due to age,
Directors. The remuneration of the members of
disability, gender reassignment, marriage and
the Board of Directors is disclosed in note 6 to
civil partnership, pregnancy and maternity,
the financial statements.
nationality, religion or belief, sex, and sexual
18
All directors serve for a period of two years
Directors of the Company be increased from
unless the general meeting decides that a
six to up to seven non-executive Directors. It
director shall serve for a specified period
was further resolved that Glen Ole Rødland was
shorter than two years. At the annual general
elected as an additional non-executive Director
meeting (AGM) on 13 May 2015, Christian
and as a result the Board of Directors now
Brinch, Roger Cornish and Carine Smith
comprises seven Directors.
Ihenacho were re-elected as Directors for a
one-year period.
As at 31 December 2015 the only Director
holding shares in the Company (including
At the extraordinary general meeting on 23
associated parties), was Roger Cornish who
October 2015 Ronny Langeland resigned and
is the registered shareholder and beneficial
Harald Espedal was elected as Director and
owner of 7,000 shares (approximately 0.0027%
Chairman of the Board until the AGM of 2017.
of the issued share capital of the Company).
At the extraordinary general meeting on 15
March 2016, it was resolved that the Board of
19
There have been no changes to the holdings
Group’s long-term forecasts for the following
after 31 December 2015.
years. As a result of the suspension of the two
CORPORATE SOCIAL RESPONSIBILITY
Prosafe aims to be a socially responsible Group
and to further develop its business in a
sustainable manner. In order to ensure
long-term, viable development and profit,
contracts in Mexico and the increased liquidity
risk, a material uncertainty around the going
concern assumption has arisen. The Board of
Directors has evaluated the financial forecasts
including the assumptions for utilisation of
the vessels and the charter day rates. These
Prosafe balances economic, environmental and
assumptions are based on prudent estimates
social objectives and integrates them into its
compared to historical actuals. In the
daily business activities and decisions.
Prosafe’s objectives for corporate social
evaluation of the financial forecasts, factors
such as the order backlog and cost saving
initiatives have been considered. As referred to
responsibility are based on the Group’s strategy,
in the financial presentation of the Q4 2015
core values, Code of Conduct and principles for
result, the Group has already achieved annual
corporate governance, in addition to
international recognised principles and
cost savings amounting to USD 15 million.
There is a target to double these annual
guidelines. In order to advance its commitment
savings. Cost savings to date and going forward
to sustainability and corporate citizenship,
Prosafe signed up as a member of the United
Nations Global Compact in October 2008.
Going forward, Prosafe will continue to aim for
include many cost categories, e.g. offshore,
travel and salaries. Activity level is forecasted to
rebound from 2018 as industry cost reductions
are taking full effect.
continuous improvement of internal standards,
Moreover, the Board of Directors has evaluated
the way it works with partners and suppliers,
and to manage the impact of its operations.
the Company’s ability to reach a solution in
the ongoing dialogue with the Company’s key
stakeholders, and concluded that it is likely/
Further information is available on Prosafe’s
realistic to achieve a favourable outcome of this
website www.prosafe.com/
corporate-responsibility
GOING CONCERN
The Board of Directors confirms that the
accounts have been prepared under the
assumption that the Company is a going
concern and that this assumption is realistic
at the date of the accounts. This assumption is
based on the budgets for the year and the
process. This conclusion is an important factor
in the going concern assumption. The Board of
Directors intends to announce a plan to secure
financing of the Company shortly. As of today,
such a plan is likely to involve a combination
of one or more different alternatives including
but not limited to, renegotiated restrictive
covenants and debt restructuring. The Board of
Directors refers to the Risk section for
additional comments i.a. on liquidity risk.
20
AUDITOR
In December 2015, the Company issued
The auditors of the Company, Messrs KPMG
23,597,300 additional shares of nominal
Limited, have expressed their willingness to
value of €0.25 at a premium of €2.48. As at 31
continue in office. A resolution for authorising
December 2015 Prosafe had an issued share
the Board of Directors to fix their remuneration
capital of 259,570,359 ordinary shares at a
will be submitted at the forthcoming annual
nominal value of EUR 0.25 each.
general meeting. Reference to auditors’ fee is
made in note 6 to the consolidated accounts.
Further information is shown in note 14 to the
consolidated financial statements.
DIVIDENDS AND PROPOSED DIVIDENDS
In 2015, the Company declared and paid
interim dividends of USD 34 million (USD 125.8
million), corresponding to NOK 1.12 per share
(NOK 3.29). The Board of directors does not
propose the payment of a final dividend.
Prosafe’s aim is that its shareholders receive a
competitive return on their shares through a
combination of share price appreciation and a
direct return in the form of dividends.
SHAREHOLDERS AND SHARE CAPITAL
Prosafe’s long-term dividend policy remains
According to the shareholder register as at 31
as described in the Q3 2014 report. However,
December 2015, the twenty largest
in light of the reduction in industry activity
shareholders held a total of 71.2 per cent of the
levels, the Board decided in November 2015 to
issued shares. The number of shareholders was
temporarily suspend dividend payments. The
3,961. A nominee account in the name of State
Board believes that this will be beneficial for
Street Bank was the largest shareholder with a
the Company from a commercial, financial and
holding of 18.1 per cent of the issued shares.
strategic perspective, and that it will improve
the Company’s financial robustness and
Prosafe carries out a quarterly survey
optionality. In addition, as part of the agreed
attempting to identify the underlying owners
amendments to its credit facilities, Prosafe
of shares held in nominee accounts. This
has agreed that it will not issue any dividends,
survey can be found at the Prosafe web
complete any bond- or equity buy-back from
site: www.prosafe.com/getfile.php/PDF%20
31 December 2015 unless all voluntary skipped
Filer/2016-02%20RDIR%20Report.pdf.
amortisations have been prepaid or cancelled
21
and a 12-month financial forecast has been
EVENTS AFTER THE BALANCE SHEET DATE
provided which confirms compliance with
Reference is made to note 24 to the
original financial covenants (except for the
consolidated accounts, and note 16 to the
equity ratio which must be a minimum of 35
parent company’s separate accounts for a
per cent).
description of events after the balance sheet
At 31 December 2015, Prosafe SE had a
date.
distributable equity of USD 491.1 million. The
In January 2016, the Company agreed with
parent company showed a net loss of USD
its banking syndicate to amend its USD 1,300
418.2 million for 2015.
million banking facility agreement. The
amendment includes the option to voluntarily
skip two scheduled amortisations amounting
up to USD 130 million in total under this facility
in 2016 and/or 2017. In addition, the annual
interest rate on the credit facilities was revised
according to a grid pricing system based on
leverage ratio.
22
On 7 March 2016 Prosafe announced that
The Group has decided to scrap three of its
it had been informed by its Mexican client
oldest units, the Jasminia, Safe Hibernia and
Cotemar Group ("Cotemar"), that Safe Regency
Safe Britannia, and to cold stack other units
would be suspended by Petróleos Mexicanos
starting with the Safe Astoria.
("Pemex") from mid-March 2016 and that
it was likely that Safe Lancia would also be
As referred to in the Financial restructuring
suspended by Pemex by mid-March 2016. On
section above, Prosafe was granted a waiver
16 March 2016, Prosafe confirmed that it had
of the liquidity covenant on 22 April 2016.
been informed by Cotemar that the Safe Lancia
The temporary minimum liquidity covenant is
will be suspended by Pemex from mid-March
now USD 20 million until the end of the third
2016. This was in response to the fact that
quarter of 2016.
Pemex is cutting spending in order to adjust
its budget to reflect an oil price of USD 25 per
barrel.
Larnaca, 27th April 2016
Board of Directors of Prosafe SE
Harald Espedal
Christian Brinch
Roger Cornish
Non-executive Chairman
Non-executive Deputy Chairman
Non-executive Director
Nancy Ch. Erotocritou
Carine Smith Ihenacho
Anastasis Ziziros
Non-executive Director
Non-executive Director
Non-executive Director
Glen Ole Rødland
Non-executive Director
23
STATEMENT OF THE MEMBERS
OF THE BOARD OF DIRECTORS
AND OTHER RESPONSIBLE
PERSONS
Statement of the members of the Board of Directors and other
responsible persons of Prosafe SE for the financial statements
in the Annual Report for the year ending December 2015
24
In accordance with Sections 9 (3) (c) and 9 (7) of the Cyprus Transparency Requirements (Securities
for Trading on Regulated Market) Law of 2007 (“Law”) and Cyprus Companies Law Cap. 113, we the
members of the Board of Directors and the other responsible persons for the consolidated financial
statements of Prosafe SE and the other companies included in the consolidated accounts (“the
Group") and the financial statements of Prosafe SE, for the year ended 31 December 2015, confirm
that, to the best of our knowledge:
(a)
the annual consolidated and financial statements that are presented on pages 28 to 70
(i)
were prepared in accordance with the International Financial Reporting Standards
as adopted by the European Union, and in accordance with the provisions of
Section 9 (4), of the Law; and
give a true and fair view of the assets, liabilities, the financial position, and the profit
or losses of Prosafe SE and the Group included in the consolidated accounts taken
as a whole; and
(ii)
(b)
the Directors’ Report gives a fair review of the development and performance of the business
and the financial position of Prosafe SE and the consolidated accounts of the Group as a
whole, together with a description of the principal risks and uncertainties that they face.
Larnaca, Cyprus, 27th April 2016
Harald Espedal
Christian Brinch
Roger Cornish
Non-executive Chairman
Non-executive Director
Non-executive Director
Carine Smith Ihenacho
Anastasis Ziziros
Nancy Ch. Erotocritou
Non-executive Director
Non-executive Director
Non-executive Director
Glen Ole Rødland
Non-executive Director
Stig Harry Christiansen
Chief Financial Officer
Prosafe Management AS
25
CONSOLIDATED ACCOUNTS
26
CONSOLIDATED INCOME STATEMENT
(USD million)
Charter revenues
Other operating revenues
Operating revenues
Employee benefits
Other operating expenses
Operating profit before depreciation and impairment
Depreciation
Impairment
Operating profit
Interest income
Interest expenses
Other financial income
Other financial expenses
Net financial items
Profit before taxes
Taxes
Net (loss)/profit
Attributable to equity holders of the parent
Earnings per share (USD)
Diluted earnings per share (USD)
Note
4
4, 5
6
7
8
8
10
10
9, 10
9, 10
11
12
12
2015
425.4
49.3
474.7
(98.9)
(112.9)
262.9
(86.5)
(145.6)
30.8
0.2
(41.6)
44.1
(73.6)
(70.9)
(40.1)
(10.5)
(50.6)
2014
481.2
67.5
548.7
(110.6)
(125.5)
312.6
(64.3)
0.0
248.3
0.3
(37.3)
76.4
(96.4)
(57.0)
191.3
(12.5)
178.8
(50.6)
178.8
(0.21)
(0.21)
0.76
0.76
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(USD million)
Net profit for the year
Note
2015
(50.6)
2014
178.8
Other comprehensive income to be reclassified to profit or
loss in subsequent periods
Foreign currency translation
Net gain/loss on cash flow hedges
Net other comprehensive income to be reclassified to profit
or loss in subsequent periods
19
(5.0)
(9.5)
(14.5)
(6.2)
(38.0)
(44.2)
Total comprehensive income for the year, net of tax
(65.1)
134.6
Attributable to equity holders of the parent
(65.1)
134.6
27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(USD million)
ASSETS
Goodwill
Vessels
New builds
Other tangible assets
Total non-current assets
Cash and deposits
Debtors
Other current assets
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Other equity
Total equity
Deferred tax
Derivatives
Other provisions
Total non-current liabilities
Interest-bearing current debt
Accounts payable
Taxes payable
Derivatives
Other current liabilities
Total current liabilities
Total equity and liabilities
Larnaca, 27 April 2016
Note
31.12.2015
31.12.2014
8
8
8, 23
8
18, 20
18, 19
18, 21
14
226.7
1 578.6
228.5
4.9
2 038.7
57.1
60.0
31.4
148.5
2 187.2
72.1
643.1
715.2
11
17, 18
15, 18, 19
17, 18
11
18, 19
16, 18, 19
7.8
48.5
2.6
1 166.4
139.5
17.8
13.7
40.7
93.9
226.7
1 027.3
311.8
5.7
1 571.5
122.4
83.9
39.0
245.3
1 816.8
65.9
682.6
748.5
830.1
13.4
39.0
3.5
886.0
0.0
18.6
17.3
87.9
58.5
305.6
2 187.2
182.3
1 816.8
Interest-bearing non-current liabilities
15, 18, 19
1 107.5
Harald Espedal
Christian Brinch
Roger Cornish
Nancy Ch. Erotocritou
Non-executive Chairman
Non-executive Deputy Chairman
Non-executive Director
Non-executive Director
Carine Smith Ihenacho
Anastasis Ziziros
Glen Ole Rødland
Non-executive Director
Non-executive Director
Non-executive Director
28
CONSOLIDATED CASH FLOW STATEMENT
(USD million)
Note
2015
2014
CASH FLOW FROM OPERATING ACTIVITIES
(Loss)/Profit before taxes
Unrealised currency (gain)/loss on long-term debt
Loss/(gain) on sale of tangible assets
Depreciation and impairment
Interest income
Interest expenses
Taxes paid
Change in working capital
Other items from operating activities
Net cash flow from operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of tangible assets
Acquisition of tangible assets
Interest received
Net cash flow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
15
8
5
8, 23
(40.1)
(56.6)
1.4
232.1
(0.2)
41.6
(16.8)
15.3
(5.2)
171.5
0.0
(700.7)
0.2
(700.5)
Proceeds from new interest-bearing debt
Repayments of interest-bearing debt
15, 18, 19
15, 18, 19
1 290.0
(816.5)
Share issue
Dividends paid
Interest paid
Net cash flow from financing activities
Net cash flow
Cash and deposits at 1 January
Cash and deposits at 31 December
14
13
20
65.8
(34.0)
(41.6)
463.7
(65.3)
122.4
57.1
191.3
(83.7)
2.3
64.3
(0.3)
37.3
(11.5)
63.0
(14.4)
248.3
0.3
(211.0)
0.3
(210.4)
332.2
(198.0)
0.0
(125.8)
(37.3)
(28.9)
9.0
113.4
122.4
29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(USD million)
Share
capital
Other
equity
Cash flow
currency
hedges
translation
Total
equity
Foreign
Equity at 31 December 2013
65.9
Net profit
Other comprehensive income
Total comprehensive income
Dividend (note 13)
0.0
0.0
0.0
0.0
Equity at 31 December 2014
65.9
Net loss
Other comprehensive income
Total comprehensive income
Share issue
Dividend (note 13)
0.0
0.0
0.0
6.2
0.0
Equity at 31 December 2015
72.1
623.1
178.8
0.0
178.8
(125.8)
676.1
(50.6)
0.0
(50.6)
59.6
(34.0)
651.1
8.2
0.0
(38.0)
(38.0)
0.0
(29.8)
0.0
(9.5)
(9.5)
0.0
0.0
(39.3)
42.6
0.0
(6.2)
(6.2)
0.0
36.4
0.0
(5.0)
(5.0)
0.0
0.0
31.4
739.7
178.8
(44.2)
134.6
(125.8)
748.5
(50.6)
(14.5)
(65.1)
65.8
(34.0)
715.2
The legal form of the share capital and the share premium accounts are reflected in the statement
of changes in equity of the accompanying parent financial statements. Other equity includes share
premium reserve and retained earnings.
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: CORPORATE INFORMATION AND PRINCIPAL ACTIVITY
Prosafe SE (the 'Company') is a public limited company domiciled in Larnaca, Cyprus. The registered
office of the Company is Stadiou 126, 6020 Larnaca, Cyprus. The Company is listed on the Oslo
Stock Exchange with ticker code PRS. The consolidated financial statements comprise the financial
statements of the Company and its subsidiaries (together referred to as the 'Group'). The consolidated
financial statements for the year ended 31 December 2015 were approved and authorised for issue
in accordance with a resolution of the board of directors on 27 April 2016. The Group is the world's
leading owner and operator of semi-submersible accommodation vessels.
NOTE 2: BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) endorsed by the European Union (EU) and the requirements of the Cyprus
Companies Law, Cap 113. The accounts have been prepared on a historical cost basis, except for
derivative financial instruments which are stated at fair value. The consolidated financial statements
are presented in US dollars (USD), and all values are presented in USD million unless otherwise stated.
The accounting principles adopted are consistent with those of the previous financial year.
JUDGMENTS. The preparation of the Group’s consolidated financial statements requires management
to make judgments, estimates and assumptions that affect the reported amounts of revenue,
expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting
period. However, uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of the asset or liability affected in future
periods.
ESTIMATES AND ASSUMPTIONS. The estimates and assumptions are assessed on a continuous basis.
The estimates and assumptions which have the most significant effect on the amounts recognised
in the financial statements relate to the going concern assumption, depreciation of fixed assets and
impairment assessment of non-financial assets. Estimated useful life of the Group's semi-submersible
accommodation/service vessels is 30 to 50 years dependent on the age at the time of acquisition and
subsequent refurbishments. The management determines whether goodwill is impaired at least on
an annual basis. This requires an estimation of the value in use of the cash-generating units to which
the goodwill is allocated, which requires management to estimate the future cash flow from the cash-
generating units and to apply a suitable discount rate. Further details are given in note 8.
NEW AND AMENDED STANDARDS
The accounting policies adopted are consistent with those of the previous financial year. The following
new and amended standards are relevant to the Group and have been adopted for the first time in
these financial statements.
IFRIC 21 – Levies
IFRIC 21 clarifies when to recognise a liability to pay a levy that falls within the scope of IAS 37.
The interpretation was issued by IASB in May 2013 and endorsed by the EU in June 2014. The
amendments do not have a material impact on the Group's consolidated financial statements.
31
Annual Improvements to IFRS 2011-2013 Cycle
In December 2013 IASB issued "Annual Improvements to IFRS 2011-2013 Cycle" and was endorsed
by the EU in December 2014. The improvements amended four standards and mainly aim to provide
clarifications. The amendments do not have a material impact on the Group's consolidated financial
statements.
Standards issued but not yet effective, which the Group has not early adopted
IASB has issued multiple new standards and interpretations that may impact the Group, which are
described below. These standards are not yet effective, and the Group has not early adopted these
standards. The Group has not yet finalised the full analysis of the impact on the Group's consolidated
financial statements of the standards below/and the effect the standards is expected to have on the
consolidated financial statements is currently unknown.
IFRS 9 Financial Instruments
IFRS 9 will eventually replace IAS 39 Financial instruments: Recognition and Measurement and is
effective from 1 January 2018 with earlier adoption allowed. The standard was issued July 2014, but
is not yet endorsed by the EU. The standard deals with classification, measurement, hedge accounting
and impairment of financial instruments, and will replace IAS 39 on these topics.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 is a joint revenue recognition standard issued from IASB and FASB and is effective from 1
January 2018, with earlier adoption allowed. The standard presents a single, principles-based five-step
model for determination and recognition of revenue to be applied to all contracts with customers. The
standard replaces existing IFRS requirements in IAS 11 Construction Contracts and IAS 18 Revenue, as
well as supplemental IFRIC guidance. The standard is not yet endorsed by the EU.
IFRS 16 Leases
IFRS 16 was issued by IASB in January 2016. The standard principally requires lessees to recognize
assets and liabilities for all leases and to present the rights and obligations associated with these
leases in the statement of financial position, and is effective from 1 January 2019. Going forward,
lessees will therefore no longer be required to make the distinction between finance and operating
leases that was required in the past in accordance with IAS 17. The standard is not yet endorsed by the
EU.
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION. The consolidated financial statements comprise the financial statements
of the parent company and its subsidiaries. Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control, and continue to be consolidated until
the date that such control ceases. The financial statements of the subsidiaries are prepared for the
same reporting period as the parent company, using consistent accounting policies. All intra-group
balances, income and expenses, unrealised gains and losses and dividends resulting from intra-group
transactions are eliminated in full.
BUSINESS COMBINATIONS AND GOODWILL. Business combinations are accounted for using the
acquisition method. The cost of an acquisition is measured as the aggregate of the consideration
32
transferred, measured at acquisition date fair value. Acquisition related costs incurred are expensed
and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date.
Goodwill is initially measured at cost being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interest over the net identifiable assets
acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of
the subsidiary acquired, the difference is recognised in profit and loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the Group’s cash generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those
units.
Where goodwill forms part of a cash generating unit and part of the operation within that unit is
disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed
of in this circumstance is measured based on the relative values of the operation disposed of and the
portion of the cash generating unit retained.
FOREIGN CURRENCY TRANSLATION. The presentation currency is USD. This is also the functional
currency for the parent company. Transactions in other currencies than the functional currency are
translated at the exchange rate prevailing at the transaction date. Monetary items in other currencies
than the functional currency are translated to the functional currency at the exchange rate on the
reporting date, and the currency difference is recognised in the profit and loss account. Non-monetary
items in other currencies than the functional currency are translated at the exchange rate at the
transaction date. When consolidating companies with a functional currency other than the USD,
profit and loss items are translated at the monthly average exchange rate, while balance sheet
items are translated at the exchange rate on the reporting date. Translation differences are taken to
other comprehensive income. On disposal of a foreign operation, the deferred cumulative amount
recognised in other comprehensive income, relating to that particular operation, is recognised in the
income statement.
SEGMENT REPORTING. For management and monitoring purposes, the Group is organised into one
segment; chartering and operation of accommodation/service vessels. For geographical information,
reference is made to note 4.
REVENUE RECOGNITION. Some of the Group's vessels operate on time charters, and others on
bareboat charters. Revenue is recognised to the extent that it is probable that the economic benefits
will flow to Prosafe and the revenue can be reliably measured. Revenue is measured at the fair value
of the consideration received. Charter income is recognised on a straight line basis over the period
the vessel has operated. Mobilisation and demobilisation fees are recognised in the period in which
the mobilisation or demobilisation takes place. Prosafe does not transfer the risks or benefits of
ownership of the asset to the customers and none of the contracts are accounted for as a financial
lease. Management, crew services and other related income are recognised in the period the services
33
are rendered. Interest income is recognised on an accrual basis. Interest income is included in
financial items in the income statement. Dividends are recognised when Prosafe’s right to receive the
payment is established. Proceeds from customers for catering and other services that is provided by
sub-contractors of Prosafe is recognised as reimbursement revenue. These services are recognised in
the period when the services are rendered.
PROVISIONS are recognised when, and only when, the Group has a present obligation as a result of
events that have taken place, and it can be proven probable that a financial settlement will take place
as a result of this liability, and that the size of the amount can be measured reliably. Provisions are
reviewed on each balance sheet date and their level reflects the best estimate of the liability.
When Prosafe expects some or all of a provision to be reimbursed, the reimbursement is recognised
as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any
provision is presented in the income statement net of any reimbursement.
TANGIBLE ASSETS are stated at acquisition cost less cumulative depreciation and accumulated
impairment losses, if any. Assets are depreciated on a straight-line basis over their estimated
economically useful lives, with account taken of their estimated residual value. Management makes
annual assessments of residual value, methods of depreciation and the remaining economic life of
the assets. Components of an asset which have an estimated shorter life than the main component of
the asset are accordingly depreciated over this shorter period. Acquisition cost includes costs directly
attributable to the acquisition of the assets. Subsequent expenditures are added to the book value of
the asset or accounted for on a separate basis, when it is likely that future benefits would derive from
the expenditures. The vessels are subject to a periodic survey every five years, and associated costs
are amortised over the five-year period to the next survey. Other repair and maintenance costs are
expensed in the period they are incurred.
Expenditures for new builds are capitalised, including instalments paid to the yard, project
management costs, and costs relating to the initial preparation, mobilisation and commissioning
until the vessel is placed into service. In accordance with IAS 23, borrowing costs are capitalised on
qualifying assets.
Tangible fixed assets are depreciated on a straight line basis over their useful lifetime as follows:
• Semi-submersible vessels – 5 to 50 years dependent on the age at the time of the acquisition
and subsequent refurbishments
• Buildings – 20 to 30 years
• Equipment – 3 to 5 years
IMPAIRMENT OF NON-FINANCIAL ASSETS. The Group assesses at each reporting date whether there
is an indication that an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the asset's recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. Where the
carrying amount of an asset or cash generating unit exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and risks specific to the asset. In
determining fair value less costs to sell, recent market transactions are taken into account, if available.
34
If no such transactions can be identified, an appropriate valuation model is used. These calculations
are corroborated by valuation multiples.
The Group bases its impairment calculation on a detailed forecast calculation which is prepared for
the Group’s cash generating units. The forecast calculation is generally covering a period of five years.
For longer periods, a long term growth rate is calculated and applied to project future cash flows after
the fifth year.
For non-financial assets excluding goodwill, an assessment is made at each reporting date as to
whether there is any indication that previously recognised impairment losses may no longer exist or
may have decreased. If such indication exists, Prosafe estimates the asset’s recoverable amount. A
previously recognised impairment loss is reversed only if there has been a change in the assumptions
used to determine the asset’s recoverable amount since the last impairment loss was recognised.
IMPAIRMENT OF GOODWILL. Goodwill is tested for impairment annually, and when circumstances
indicate that the carrying value may be impaired. Impairment is determined by assessing the
recoverable amount of the cash generating units to which the goodwill relates. When the recoverable
amount is lower than the carrying amount, the impairment loss is recognised in the income
statement. Impairment losses related to goodwill cannot be reversed in future periods.
FINANCIAL ASSETS
Initial recognition
Financial assets are classified as financial assets at fair value through profit or loss, loans and
receivables or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
Prosafe determines the classification of its financial assets at initial recognition.
Financial assets are recognised initially at fair value plus directly attributable costs, with the exception
of assets measured at fair value through profit and loss.
Prosafe’s financial assets include cash and short-term deposits, trade and other receivables and
financial derivatives.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss include financial assets held for trading. Financial
assets are classified as held for trading if they are acquired for the purpose of selling in the near
future. This category also includes derivative instruments entered into that do not meet the hedge
accounting criteria as defined by IAS 39. Financial assets at fair value through profit and loss are
carried in the balance sheet at fair value with gains and losses recognised in the income statement.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Such financial assets are carried at amortised cost using the
effective interest rate method. Gains and losses are recognised in the consolidated income statement
when the loans and receivables are derecognised or impaired, as well as through the amortisation
process.
35
Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial
asset or a group of financial assets is impaired. A financial asset or a group of financial assets are
deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or
more events that have occurred after the initial recognition of the asset and that loss event has an
impact on the estimated future cash flows of the financial asset or the group of financial assets that
can be reliable estimated.
FINANCIAL LIABILITIES
Initial recognition
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through
profit or loss, financial liabilities measured at amortised cost or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. Prosafe determines the classification of its financial
liabilities at initial recognition.
Financial liabilities are recognised initially at fair value and, in case of loans and borrowings, net of
directly attributable costs.
Prosafe’s financial liabilities include non-derivative financial instruments (trade and other payables,
bank overdraft, loans and borrowings, financial guarantee contracts) and derivative financial instru-
ments.
Non-derivative financial instruments
Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective
interest method.
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading.
Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in
the near future. This category also includes derivative instruments entered into that do not meet
the hedge accounting criteria as defined by IAS 39. Gains and losses on liabilities held for trading are
recognised in the income statement.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires.
When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new liability,
and the difference in the respective carrying amounts is recognised in the income statement.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments that are actively traded in organised financial markets is
determined by reference to quoted market bid prices at the close of business on the balance sheet
36
date. For financial instruments where there is no active market, fair value is determined using valuation
techniques. Such techniques may include using recent arm’s length market transactions, reference to the
current fair value of another instrument that is substantially the same, discounted cash flow analysis or
other valuation models.
EMPLOYEE BENEFITS. Companies within the Group make contributions to pension schemes that are
defined contribution plans. The companies’ payments are recognised in the income statement for the
year to which the contribution applies.
SHARE-BASED PLANS. The Group has an option plan for key personnel which provides a cash settlement
if an option is exercised. The fair value of the options is expensed over the period until vesting with
recognition of a corresponding liability which also includes social security tax where relevant. This
liability is remeasured at each balance sheet date up to and including the settlement date with changes
in fair value recognised in the income statement.
BORROWING COSTS. Borrowing costs directly attributable to the acquisition, construction or production
of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale
are capitalised as part of the cost of the respective assets. Other borrowing costs are capitalised as
calculated using the effective interest method.
DERIVATIVE FINANCIAL INSTRUMENTS. Prosafe uses derivative financial instruments such as forward
currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks
respectively. Such instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains and losses arising from changes in fair value on derivatives during the year that do not qualify
for hedge accounting and the ineffective portion of an effective hedge, are recognised in the income
statement.
The fair value of forward currency contracts is the discounted difference between the forward exchange
rate and the contract price. The fair value of interest rate swap contracts is determined by reference to
market price for similar instruments.
At the inception of a hedge relationship, Prosafe formally designates and documents the hedge
relationship to which the Group wishes to apply hedge accounting and the risk management objective
and strategy for undertaking the hedge. The documentation includes identification of the hedging
instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity
will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged
item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly
effective in achieving offsetting changes in fair value or cash flows, and are assessed on an ongoing basis
to determine that they actually have been highly effective throughout the financial reporting periods for
which they were designated.
Prosafe applies hedge accounting only for the interest rate swaps. Hedges which meet the strict criteria
for hedge accounting are accounted for as follows:
Cash flow hedges
The effective portion of the gain and loss on the hedging instrument is recognised directly in other
comprehensive income, while any ineffective portion is recognised immediately in the income
statement.
37
Amounts recognised as other comprehensive income are transferred to the income statement when
the hedged transaction affects profit and loss, such as when the hedged financial income or financial
expense is recognised.
Current versus non-current classification
Derivative instruments that are not a designated and effective hedging instrument are classified as
current or non-current or separated into a current and non-current portion based on an assessment of
the facts and circumstances.
When Prosafe holds a derivative as an economic hedge for a period beyond 12 months after the balance
sheet date or a derivative instrument is designated as an effective hedging instrument, the fair value of
the derivative instrument is classified as current or non-current consistent with the classification of the
underlying item. Economic hedges are not treated as hedging for accounting purposes.
INCOME TAXES in the income statement include taxes payable and changes in deferred tax. Deferred
tax is calculated on the basis of temporary differences between book and tax values that exist at the
end of the period. Deferred tax asset is recognised in the statement of financial position when it is
probable that the tax benefit can be utilised. Deferred tax and deferred tax asset are measured at
nominal value.
Income tax assets and liabilities for the current and prior periods are measured at the amount expected
to be recovered or paid to the taxation authorities.
Deferred tax liabilities are measured at the tax rates that are expected to apply in the year when the
liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting
date. Deferred tax is provided using the liability method.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax
assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and
the same taxation authority.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date
and are recognised to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.
CASH AND DEPOSITS comprise cash at banks and short-term deposits with an original maturity of three
months or less, which are subject to an insignificant risk of changes in value.
DIVIDEND distribution to the shareholders is recognised in the financial statementson the date on
which the shareholders' right to receive payment is established.
SHAREHOLDER'S EQUITY. Any difference between the issue price of share capital and the nominal
value is recognised as share premium. The costs incurred attributable to the issue of share capital are
deducted from equity.
OWN SHARES. Own equity instruments which are reacquired are recognised at cost and deducted from
equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation
of the Group’s own equity instruments.
38
NOTE 4: SEGMENT REPORTING
Prosafe has one segment, which is chartering and operation of accommodation/service vessels.
Operating revenues by geographical location
2015
2014
Europe excl. Cyprus
Cyprus
Americas
Australia/Asia
Total operating revenues
307.3
0.0
111.5
55.9
474.7
322.8
0.0
165.2
60.7
548.7
The revenue allocation is based on place of operation of the vessel.
Operating revenues from major customers situated in:
Europe1
Americas1
Australia/Asia1
Europe2
Americas2
Europe3
Europe4
1) Operating revenues in USD million
2) Percentage of total revenues
2015
1)
84.0
78.2
55.8
47.3
33.3
32.5
0.0
2)
18 %
16 %
12 %
10 %
7 %
7 %
0 %
2014
1)
0.0
110.9
39.4
25.9
54.3
60.3
113.4
2)
0 %
20 %
7 %
5 %
10 %
11 %
21 %
Total assets by geographical location
2015
2014
Europe excl. Cyprus
Cyprus
Americas
Australia/Asia
Total assets
NOTE 5: OTHER OPERATING REVENUES
Mobilisation/demobilisation income
Reimbursement revenues
Total other operating revenues
1 603.2
1 031.8
31.2
198.6
354.2
58.7
266.5
459.8
2 187.2
1 816.8
2015
2014
5.4
43.9
49.3
8.8
58.7
67.5
39
NOTE 6: EMPLOYEE BENEFITS, MANAGEMENT REMUNERATION AND AUDIT FEE
Wages and salaries
Contract personnel
Other personnel-related expenses
Social security taxes
Pension expenses
Other remuneration
Change in share option provision
Total employee benefits
2015
2014
58.5
14.8
11.2
5.8
5.1
3.4
0.0
98.9
58.9
21.7
13.7
7.6
6.2
3.0
(0.4)
110.6
Bonus scheme
The Company's bonus scheme embraces the executive management and other key employees. The
bonus depends on achieving defined results relating to earnings, the attainment of strategic goals
and HSE.
Share options
The executive management and other key employees (in total 12 persons) were included in a synthetic
share option programme that expired in 2015. The outstanding options were granted in 2011. When
a synthetic option was exercised, the option holder was paid a cash consideration corresponding to
the difference between the share price at the exercise date adjusted for any dividends paid during
the period, and the share price at grant date. All synthetic options were capped at two times strike
price. Net proceeds after tax were to be used to purchase shares in the Company at market price. The
options were valued by using the Black-Scholes option pricing model. The right to exercise was subject
to the employee being employed during the vesting period.
Share price at 31 December (NOK)
Weighted average fair value (NOK) at 31 December
Provision at 31 December (USD million)
2015
2014
N/A
N/A
0.0
23.00
0.18
0.0
40
Options granted 2008
Options granted 2009
Options granted 2011
Forfeited in 2010
Exercised in 2011
Forfeited in 2011
Exercised in 2012
Forfeited in 2012
Exercised in 2013
Forfeited in 2013
Forfeited in 2014
Expired in 2014
Expired in 2015
Outstanding options at 31 December 2015
Exercisable at 31 December 2015
Pension and severance pay
2 768 829
910 000
770 000
(917 524)
(70 000)
(20 000)
(673 000)
(2 036 305)
(32 000)
(70 000)
(30 000)
(315 000)
(285 000)
0
0
Certain members of the corporate management have agreements on severance pay. Under these
agreements, the Company guarantees a remuneration corresponding to the base salary received at
the time of departure for a period of up to two years after the normal six-month period of notice. With
the exception of the agreement with the CEO, these agreements specify that benefits received from
new employers are deducted from the remuneration due, unless the person concerned left as a result
of an acquisition, sale or merger. The CEO has an agreement on early retirement pension after the age
of 60 and until the age of 67. With full earning of pension entitlement, the annual early retirement
pension will equal 24 times the Norwegian national insurance base rate.
In accordance with the code of practice for corporate governance recommended by the Oslo Stock
Exchange, remuneration for the corporate management and the board of directors is specified below.
Senior officers
(USD 1 000)
Year
Salary
Bonus 1)
Pension 2)
benefits
Other
Karl Ronny Klungtvedt (CEO)
Robin Laird (Deputy CEO)
Stig Christiansen (CFO from Aug 2015)
Sven Børre Larsen (CFO to Aug 2015)
Karl Ronny Klungtvedt (CEO)
Robin Laird (Deputy CEO)
Sven Børre Larsen (CFO)
2015
2015
2015
2015
2014
2014
2014
498
523
117
227
619
561
381
213
251
0
127
354
329
220
159
79
18
29
181
84
44
28
189
10
25
36
264
58
1) Payment based on previous year's achievements
2) For the CEO, the figures include increase in early retirement pension liability
41
Board of directors
(USD 1 000)
Harald Espedal (chair from Oct 2015)
Ronny Johan Langeland (chair to Oct 2015)
Christian Brinch
Roger Cornish
Tasos Ziziros
Nancy Ch. Erotocritou
Carine Smith Ihenacho
Ronny Johan Langeland (chair from May 2014)
Michael Raymond Parker (chair to May 2014)
Christian Brinch
Roger Cornish
Carine Smith Ihenacho
Nancy Ch. Erotocritou (from May 2014)
Tasos Ziziros (from May 2014)
Christakis Pavlou (to May 2014)
Year
Board fees 1)
2015
2015
2015
2015
2015
2015
2015
2014
2014
2014
2014
2014
2014
2014
2014
25
113
119
101
87
85
81
159
68
122
112
95
59
59
38
1) If applicable, figures include compensation from audit committee and compensation committee.
Auditors' fee
(USD 1 000)
Audit
Fees for other services
Total auditors' fee
Auditor's fee is included in general and administrative expenses (note 7).
NOTE 7: OTHER OPERATING EXPENSES
Repair and maintenance
Other vessel operating expenses
General and administrative expenses
Total other operating expenses
2015
2014
324
15
338
298
34
332
2015
2014
24.3
49.5
39.1
112.9
28.5
53.1
43.9
125.5
42
NOTE 8: TANGIBLE ASSETS AND GOODWILL
New
Vessels
builds Equipment
Buildings
Goodwill
Total
Acquisition cost
31 December 2013
Additions
Disposals
Acquisition cost
31 December 2014
Additions
Disposals
Acquisition cost
31 December 2015
1 537.0
248.9
146.4
(4.0)
62.9
0.0
1 679.4
311.8
783.8
(2.1)
2 461.1
(83.3)
0.0
228.5
Accumulated depreciation
31 December 2013
590.1
Accumulated depreciation
(1.4)
on disposals
Depreciation for the year
Accumulated depreciation
31 December 2014
63.4
652.1
Accumulated depreciation
(0.7)
on disposals
Depreciation for the year
Impairment
Accumulated depreciation
31 December 2015
85.5
145.6
882.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.7
1.2
0.0
5.9
0.2
0.0
6.1
3.5
0.0
0.1
3.6
0.0
0.4
0.0
4.0
7.4
226.7 2 024.8
0.5
0.0
7.9
0.0
0.0
7.9
3.6
0.0
0.9
4.5
0.0
0.5
0.0
5.0
0.0
0.0
211.0
(4.0)
226.7 2 231.6
0.0
0.0
700.7
(2.1)
226.7 2 930.2
0.0
597.2
0.0
(1.4)
0.0
0.0
64.3
660.2
0.0
(0.7)
0.0
0.0
0.0
86.5
145.6
891.5
Net carrying amount
31 December 2015
Net carrying amount 31
December 2014
Depreciation rate (%)
Economically useful life
(years)
1 578.6
228.5
2.1
2.9
226.7 2 038.7
1 027.3
311.8
2.2
3.4
226.7 1 571.5
2-20
5-50
-
-
20-33
3-5
3-5
20-30
-
-
-
-
New builds include prepayment of 20 % of the yard cost for the new builds, owner-furnished
equipment and other project costs incurred. For details, reference is made to note 24.
Tangible fixed assets and goodwill are initially recorded at cost. Subsequent to recognition, tangible
fixed assets are stated at cost less accumulated depreciation and any accumulated impairment losses.
These assets are depreciated on a straight line basis. The costs of upgrades and modification of vessels
are capitalised.
43
Borrowing costs are capitalised as part of the asset in accordance with revised IAS 23. As at 31
December 2015, capitalised borrowing costs amount to USD 28.4 million (31 December 2014: USD
15.8 million). The amount of borrowing costs capitalised in the period equalled USD 12.8 million (USD
7.5 million) and the capitalisation rate used to determine the amount of borrowing costs eligible for
capitalisation was 2.7% (2.8%).
Estimated useful life for the semi-submersible accommodation vessels is 30-50 years. Certain
equipment on a vessel is depreciated over a shorter period than the life of the vessel itself. The
estimated scrap value is USD 3 million per vessel. This estimate is based on steel prices and is
reviewed on an annual basis.
Management performed an annual impairment assessment of the fixed assets in line with IFRS.
Management looked at each individual vessel as a cash generating unit, and concluded that there is
an impairment relating to several of the accommodation vessels due to a weaker market outlook. On
this basis, an impairment charge amounting to USD 145.6 million has been made in the accounts. The
estimated recoverable amounts of the assets - the values in use - are as follows.
Jasminia
Safe Hibernia
Safe Britannia
Safe Regency
Safe Lancia
Safe Bristolia
Safe Astoria
Safe Concordia
Impairment
Recoverable amount
9.1
4.3
21.1
21.0
13.7
57.1
2.3
17.0
145.6
0.0
0.0
0.0
0.0
0.0
71.8
90.2
183.2
345.2
The goodwill of USD 226.7 million relates to the acquisition of Consafe Offshore AB in 2006. Prosafe
has only one reporting segment comprising of all accommodation/service vessels which the goodwill
has been allocated to. The recoverable amount has been identified by calculating the value in use. The
calculation is based on the present value of the estimated cash flow. The discount rates applied reflect
management's estimate of the risks specific to each unit. The present value of this cash flow exceeds
the carrying value, and no need for a write-down is indicated.
The present value of the estimated cash flows from the cash-generating units, is based on the
following inputs:
Revenues
- Current contracts portfolio and contract renewals reflecting current market conditions, remaining
life of asset, and historical utilisation rates
Expenses
- Operating expenses and overheads reflecting current market conditions and historical utilisation
rates
Capital expenditures
- Capex reflecting long-term capex projections (excluding value enhancing investments)
Pre-tax discount rate 8%.
44
- Sensitivity: a 1% increase in the pre-tax discount rate would have lead to an additional impairment
of around USD 30 million on the cash generating units (vessels), and the goodwill would have been
impaired by USD 100 million.
- Sensitivity: a 2% increase in the pre-tax discount rate would have lead to an additional impairment
of around USD 95 million on the cash generating units (vessels), and the goodwill would have been
impaired by USD 175 million.
NOTE 9: OTHER FINANCIAL ITEMS
Currency gain
Fair value adjustment currency forwards
Total other financial income
Currency loss
Fair value adjustment currency forwards
Amortisation of borrowing costs
Other financial expenses
Total other financial expenses
2015
2014
0.0
44.1
44.1
(55.7)
0.0
(12.8)
(5.1)
(73.6)
76.4
0.0
76.4
0.0
(83.4)
(5.3)
(7.7)
(96.4)
45
NOTE 10: FINANCIAL ITEMS - IAS 39 CATEGORIES
Fair value
Financial
liabilities
Loans and
through
measured at
Year ended 31 Dec 2015
receivables
profit and loss
amortised cost
Total
Interest income
Fair value adjustment currency forwards
Total financial income
Interest expenses
Amortisation of borrowing costs
Other financial expenses
Currency loss 1)
Total financial expenses
Net financial items
0.2
0.0
0.2
0.0
0.0
0.0
0.0
0.0
0.2
0.0
44.1
44.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(41.6)
(12.8)
(5.1)
0.0
0.2
44.1
44.3
(41.6)
(12.8)
(5.1)
(55.7)
(59.5)
(115.2)
44.1
(59.5)
(70.9)
Fair value
Financial
liabilities
Loans and
through
measured at
Year ended 31 Dec 2014
receivables
profit and loss
amortised cost
Total
Interest income
Currency gain 1)
Total financial income
Interest expenses
Fair value adjustment currency forwards
Amortisation of borrowing costs
Other financial expenses
Total financial expenses
Net financial items
0.3
0.0
0.3
0.0
0.0
0.0
0.0
0.0
0.3
0.0
0.0
0.0
0.0
(83.4)
0.0
0.0
(83.4)
0.0
0.0
0.0
(37.3)
0.0
(5.3)
(7.7)
0.3
76.4
76.7
(37.3)
(83.4)
(5.3)
(7.7)
(50.3)
(133.7)
(83.4)
(50.3)
(57.0)
1) Currency effects (gain/loss) are excluded from the category break-down, but added to the total
for net effect.
46
NOTE 11: TAXES
Taxes in income statement:
Taxes payable
Change in deferred tax
Total taxes in income statement
Temporary differences:
Exit from Norwegian tonnage tax system
Non-current assets
Current assets
Current liabilities
Basis for deferred tax
Recognised deferred tax
Deferred tax 1 January
Change in deferred tax in income statement
Translation difference
Deferred tax 31 December
2015
2014
13.2
(2.7)
10.5
32.8
(1.5)
0.0
0.0
31.3
7.8
13.4
(2.7)
(2.9)
7.8
15.8
(3.3)
12.5
48.5
(2.2)
0.0
3.3
49.7
13.4
20.1
(3.3)
(3.4)
13.4
Payable tax as at 31 December
13.7
17.3
The cumulated tax loss carried forward in Cyprus as at 31 December 2015 and 2014 amounts to USD
47 million and USD 63.1 million respectively. The tax rate in Cyprus is 12.5%. No deferred tax asset is
recognised in respect of this tax loss carried forward as utilisation of this deferred tax asset is deemed
not probable. The tax loss for each year may be carried forward for five years.
The majority of the Group's vessels are subject to taxation based on the special rules for taxation of
shipping and offshore companies in Singapore. Profit from these charters is not taxable to Singapore,
but the company pays tax deducted at source in some of the countries in which it operates.
The deferred tax liability related to the enforced departure of the vessel business from the Norwegian
tonnage tax system effective 1 January 2006, was initially calculated to NOK 780 million equivalent to
USD 115 million applying the exchange rate prevailing on this date. This liability is paid at a rate of 20
per cent annually on the outstanding balance. The tax rate in Norway was 27% in 2015, but effective 1
January 2016 the tax rate is 25%.
47
NOTE 12: EARNINGS PER SHARE
Earnings per share are calculated by dividing net profit by the weighted average number of ordinary
shares outstanding during the year. There are no dilutive share options.
Net profit/(loss)
Weighted average number of outstanding shares (1 000)
Basic earnings per share
2015
2014
(50.6)
178.8
237 719
235 973
(0.21)
0.76
Weighted average number of outstanding and potential shares (1 000)
237 719
235 973
Diluted earnings per share
(0.21)
0.76
NOTE 13: DIVIDENDS
Dividend declared during the year
Total dividends declared
Dividends per share (NOK)
2015
2014
34.0
34.0
125.8
125.8
1.12
3.29
NOTE 14: SHARE CAPITAL AND SHAREHOLDER INFORMATION
Issued and paid number of ordinary shares at 31 December
Authorised number of shares at 31 December
Nominal value at 31 December
Number of shareholders at 31 December
2015
2014
259 570 359
275 924 148
EUR 0.25
3 961
235 973 059
275 924 148
EUR 0.25
4 335
During the year the Company issued 23,597,300 additional shares of nominal value of €0.25 at a
premium of €2.48.
48
Largest shareholders/groups of shareholders at 31.12.2015
No of shares
Percentage
State Street Bank (nom.)
North Sea Strategic Investments AS
RBC Investor Services Trust (nom.)
DNB
State Street Bank (nom.)
Folketrygdfondet
Pareto Aksje Norge
Odin Norge
FLPS
Six Sis AG (nom.)
Swedbank Robur Småbolagsfond Norden
State Street Bank (nom.)
Schroder International Selection
Pareto AS
JP Morgan Chase Bank (nom.)
Nordnet Bank AB (nom.)
Statoil Pensjon
Verdipapirfondet Alfred Berg Norge
KLP AksjeNorge Indeks
Swedbank Robur Nordenfond
47 071 218
31 526 403
20 175 567
16 452 694
11 643 537
8 615 958
6 717 697
6 058 000
5 374 600
4 369 896
3 969 484
3 503 573
2 922 040
2 752 292
2 591 036
2 587 560
2 335 927
2 067 232
2 058 031
2 000 057
18.1 %
12.1 %
7.8 %
6.3 %
4.5 %
3.3 %
2.6 %
2.3 %
2.1 %
1.7 %
1.5 %
1.3 %
1.1 %
1.1 %
1.0 %
1.0 %
0.9 %
0.8 %
0.8 %
0.8 %
Total 20 largest shareholders/groups of shareholders
184 792 802
71.2 %
All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares
are entitled to dividends from time to time and are entitled to one vote per share at general meetings
of the Company.
49
NOTE 15: INTEREST-BEARING DEBT
As of 31 December 2015, Prosafe’s interest-bearing debt totalled USD 1 247 million. Loans secured
by mortgages (credit facility) accounted for USD 945 million of this total and unsecured bond loans
accounted for about USD 302 million. Cross default clauses apply in both bank and bond loan
agreements.
Credit facility
Bond loans
Total interest-bearing debt
Debt in NOK
Debt in USD
Total interest-bearing debt
Long-term interest-bearing debt
Current interest-bearing debt
Total interest-bearing debt
USD 1,300 million credit facility
2015
945.0
302.0
1 247.0
302.0
945.0
1 247.0
1 107.5
139.5
1 247.0
2014
440.0
390.1
830.1
390.1
440.0
830.1
830.1
0.0
830.1
In February 2015, the USD 1,100 million and USD 420 million credit facilities were refinanced in a new
credit facility of USD 1,300 million with a tenor of seven years. The credit facility consists of two term
loan tranches of USD 800 million and USD 200 million (drawn on delivery of Safe Zephyrus in January
2016) and a revolving credit facility of USD 300 million. The term loan tranches are reduced semi-
annually with USD 55 and USD 10 million, respectively. In January 2016, the syndicate banks granted
voluntary options to skip two scheduled amortizations. As of 31 December 2015, USD 100 million was
available under the revolving credit facility and the term loan for Safe Zephyrus was unutilised. The
annual interest rate above 3-month LIBOR depends on leverage ratio;
2.00 per cent. per annum if below 3.00
2.15 per cent. per annum if above 3.00 and less than or equal to 4.00
2.30 per cent. per annum if above 4.00 and less than or equal to 5.00
2.50 per cent. per annum if above 5.00 and less than or equal to 5.50
2.75 per cent. per annum if above 5.50
Financial covenants as per amendment in December 2015 (ref note 24)
Liquidity:
Leverage ratio:
Minimum USD 65 million 1)
Net Debt 2) / EBITDA 3) must not exceed;
5.0 until 31 December 2015
6.0 1st January 2016 – 31 December 2018
5.0 1st January 2019 – maturity
Minimum 25 per cent 4)
Equity ratio:
Collateral maintenance: Market value collateral vessels / facilities outstanding above 125 per cent
until 31 December 2018, and 150 per cent thereafter
50
USD 288 million credit facility
In May 2014, the company secured a new credit facility. The credit facility, which has a maturity
of seven years, consists of two tranches of USD 144 million (USD 288 million in total) that can be
drawn upon delivery of the two new builds, Safe Notos (delivered in February 2016 and Safe Eurus
(to be delivered in 2016). The availability under each tranche is reduced quarterly with USD 3 million,
starting 3 months after delivery of the tranche security. The annual interest rate above 3-month LIBOR
depends on leverage ratio;
2.25 per cent. per annum if below 4.00
2.50 per cent. per annum if above 5.00 and less than or equal to 5.50
2.75 per cent. per annum if above 5.50
Financial covenants as per amendment in December 2015 (ref note 24)
Liquidity:
Leverage ratio:
Minimum USD 65 million 1)
Net Debt 2) / EBITDA 3) must not exceed;
5.0 until 31 December 2015
6.0 1st January 2016 – 31 December 2018
5.0 1st January 2019 – maturity"
Minimum 25 per cent 4)
Equity ratio:
Collateral maintenance: Market value vessels/total outstanding loans
above 125 per cent
1) Including up to USD 25 million of commitment available for utilization
2) Less cash and excluding debt related to new builds under construction
3) Annualisation of contribution from new vessels that have not been in operation for a full year
4) Book equity to total assets
Financial covenants as of 31 December 2015 - Bank credit facilities
Cash and deposits
Amount available for utilisation, revolving credit facility (max USD 25 million)
Liquidity (minimum USD 65 million)
Credit facility
Bond loan PRS07
Bond loan PRS08
Bond loan PRS09
Bond loan PRS10
Bond loan PRS11
Total interest-bearing debt
Cash and deposits
Interest-bearing debt related to new builds
Bank guarantees
EBITDA 1) last 12 months
Leverage ratio (maximum 5.0)
57.1
25.0
82.1
945.0
29.5
56.8
56.8
79.5
79.5
1 247.0
57.1
228.5
32.9
391.0
2.5
1) Including annualisation of contribution from new builds and conversions that have not been in
operation for a full year.
51
Equity
Total assets
Equity ratio (minimum 25%)
Market value collateral vessels
Facilities outstanding
Collateral maintenance (minimum 125%)
715.2
2 187.2
33 %
1 707.5
945.0
181 %
Bond loans
The bond debt is divided into five loans of NOK 500 million maturing February 2016 (PRS07), NOK 500
million maturing February 2017 (PRS08), NOK 500 million maturing January 2020 (PRS09), NOK 700
million maturing October 2018 (PRS10) and NOK 700 million maturing September 2019 (PRS11). All
bonds are listed on the Oslo Stock Exchange.
Loan
PRS07
PRS08
PRS09
PRS10
PRS11
Principal
Outstanding
NOK 260 million
NOK 260 million
NOK 500 million
NOK 500 million
NOK 500 million
NOK 500 million
NOK 700 million
NOK 700 million
NOK 700 million
NOK 700 million
Maturity
Feb 2016
Feb 2017
Jan 2020
Oct 2018
Sep 2019
Interest
Loan margin
3m Nibor
3m Nibor
3m Nibor
3m Nibor
3m Nibor
3.50 %
3.75 %
3.75 %
2.95 %
3.10 %
Bond loans - Financial covenants
Value adjusted equity ratio: Minimum 30 per cent
Leverage Ratio: Debt / EBITDA 1) must not exceed; 5.0
1) Annualisation of contribution from new vessels and conversions that have not been in
operation for a full year.
As of 31 December 2015, the Group was in compliance with all covenants on interest-bearing debt.
In February 2016, the bond holders approved to adjust the equity and leverage ratio covenants to be
aligned with the covenants in the bank credit facilities. See note 24 for further information.
The Group has on 22 April 2016 been granted a waiver of a liquidity covenant relating to the credit
facilities. The new temporary minimum liquidity level is USD 20 million until the end of the third
quarter of 2016. This is applicable to both the USD 1.3 billion facility and the USD 288 million new
build financing facility.
52
Financial covenants as of 31 December 2015 - Bond loans
Credit facility
Bond loan PRS07
Bond loan PRS08
Bond loan PRS09
Bond loan PRS10
Bond loan PRS11
Total interest-bearing debt
Bank guarantees
EBITDA 1) last 12 months
Leverage ratio (maximum 5.0)
945.0
29.5
56.8
56.8
79.5
79.5
1 247.0
32.9
446.3
2.9
1) For PRS08, PRS09, PRS10 and PRS11 EBITDA includes annualisation of contribution from new builds
and conversions that have not been in operation for a full year. For PRS07, maturing February 2016,
no EBITDA annualisation applies. As of 31 December 2015, Leverage Ratio for PRS07 was 4.87.
Value adjusted total equity
Value adjusted total assets
Equity ratio (minimum 30%)
1 161.9
2 633.9
44 %
As of 31 December 2015, the Group was in compliance with all covenants on interest-bearing debt.
In February 2016, the bond holders approved to adjust the equity and leverage ratio covenants to be
aligned with the covenants in the bank credit facilities. See note 24 for further information.
3 month LIBOR is the basis for interests on the loans denominated in USD, whereas 3 month NIBOR
is the basis for interests on the loans denominated in NOK. On average, LIBOR interest fixings were
higher and NIBOR interest fixings were lower in 2015 compared to 2014.
Sellers credits
In November 2015, Jurong Shipyard Pte Ltd. granted Prosafe a sellers’ credit of USD 30 million as a
reduction on the final delivery instalment of the Safe Zephyus. The sellers’ credit is due to be repaid in a
single payment on or before 15 June 2017, together with the annual interest rate of 6.7%.
In January 2016, Cosco (Qidong) Offshore Co. Ltd. granted a sellers’ credit of around USD 29 million as
a reduction on the final delivery instalment of the Safe Notos. The amount reduces the final delivery
instalment for the vessel, and is due to be repaid in a single payment on or before 31 December 2016.
The interest cost is estimated to be around 6%.
53
NOTE 16: OTHER CURRENT LIABILITIES
Various accrued costs
Accrued interest costs
Deferred income
Public taxes
Provision share option costs
Other interest-free current liabilities
Total interest-free current liabilities
2015
2014
79.8
5.0
4.6
0.3
0.0
4.1
93.9
53.1
3.8
1.2
0.4
0.0
0.0
58.5
NOTE 17: MORTGAGES AND GUARANTEES
As of 31 December 2015, Prosafe’s interest-bearing debt secured by mortgages totalled USD 945
million. The debt was secured by mortgages on the accommodation/service vessels Safe Astoria, Safe
Bristolia, Safe Caledonia, Safe Concordia, Safe Scandinavia, Regalia, Safe Boreas (net carrying value
USD 1,391 million) and Safe Zephyrus when delivered. Negative pledge clauses apply on shares in the
vessel owning subsidiaries. Earnings accounts are pledged as security for the credit facilities, but cash
will only be restricted if a continuing event of default occurs.
Bank guarantees amounted to NOK 290 million at 31 December 2015 (no outstanding bank
guarantees as at 31 December 2014). The guarantees were secured by parent company guarantee
and mortgages on the accommodation/service vessels Safe Regency, Safe Lancia, Safe Hibernia, Safe
Britannia and Jasminia (net carrying value USD 0 million).
As of 31 December 2015, Prosafe had issued parent company guarantees to customers on behalf of its
subsidiaries in connection with the award and performance of contracts totalling approximately USD
124 million.
As of 31 December 2014, Prosafe’s interest-bearing debt secured by mortgages totalled USD 440
million. The debt was secured by mortgages on shares in Prosafe Rigs Pte Ltd and Prosafe Offshore
Pte Ltd, and the accommodation/service vessels owned by these entities. The book value of the
mortgaged fleet was USD 1 027.3 million. Prosafe had issued parent company guarantees to
customers on behalf of its subsidiaries in connection with the award and performance of contracts.
54
NOTE 18: FINANCIAL ASSETS AND LIABILITIES
As of 31 December 2015, the group had financial assets and liabilities in the following categories:
Fair value
Financial
liabilities
through
measured at
Year ended 31 Dec 2015
receivables
loss
cost
Loans and
profit and
amortised
Book
value
Fair
value
Cash and deposits
Accounts receivable
Other current assets
Total financial assets
Credit facility 1300 million 1)
Bond loan PRS07 2)
Bond loan PRS08 3)
Bond loan PRS09 4)
Bond loan PRS10 5)
Bond loan PRS11 6)
Fair value interest swaps 7)
Fair value currency forwards
Accounts payable
Other current liabilities
Total financial liabilities
57.1
60.0
26.3
143.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
48.5
40.7
0.0
0.0
89.2
0.0
0.0
0.0
0.0
57.1
60.0
26.3
57.1
60.0
26.3
143.4
143.4
945.0
945.0
905.0
29.5
56.8
56.8
79.5
79.5
0.0
0.0
17.8
84.8
29.5
56.8
56.8
79.5
79.5
48.5
40.7
17.8
84.8
29.6
55.4
46.6
69.0
65.1
48.5
40.7
17.8
84.8
1 349.7
1 438.9
1 362.4
1) Fair value reflects current market conditions with the assumption that the credit margin would
increase from the actual 200 basis points to 275 basis points. The net present value of the interest
advantage, discounted with USD 5-year swap rate, is around USD 40 million.
2,3,4,5,6) Fair value reflects current market conditions based on last trade prices as of 31 December
2015 (Bloomberg rates): PRS07 100.208, PRS08 97.487, PRS09 82.000, PRS10 86.757, PRS11 81.893
7) Interest swaps are treated as effective hedges (hedge accounting), and changes in fair value affect
other comprehensive income, not profit and loss.
Management assessed the cash and deposits, accounts receivables, other current assets, accounts
payable and other current liabilities to approximate their carrying amounts largely due to the short-
term maturities of these instruments.
The Group enters into derivative financial instruments with various counterparties, principally
financial institutions with investments grade credit ratings. Derivatives valued using valuation
techniques with market observable inputs are mainly interest rate swaps and foreign exchange
forward contracts. The most frequently applied valuation techniques include forward pricing and
swap models, using present value calculations. The models incorporate various inputs including the
credit quality of counterparties, foreign exchange spot and forward rates, interest rate and forward
rate curves. All derivative contracts are secured under the USD 1,300 million credit facility.
55
Assets measured at fair value in the balance sheet
The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 -
Inputs other than quoted prices included within level 1 that are observable for assets or
liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Inputs for assets or liabilities that are not based on observable market data
(unobservable inputs).
Level 3 -
The currency forwards and interest swaps are valued based on current exchange rates and forward
curves.
Year ended 31 Dec 2015
Fair value currency forwards
Fair value interest swaps
Total financial assets/liabilities
Total
(40.7)
(48.5)
(89.2)
Level 1
0.0
0.0
0.0
Level 2
(40.7)
(48.5)
(89.2)
Level 3
0.0
0.0
0.0
56
As of 31 December 2014, the group had financial assets and liabilities in the following categories:
Fair value
Financial
liabilities
through
measured at
Year ended 31 Dec 2014
receivables
loss
cost
Loans and
profit and
amortised
Book
value
Fair
value
Cash and deposits
Accounts receivable
Other current assets
Total financial assets
Credit facility 1100 million 1)
Bond loan PRS07 2)
Bond loan PRS08 3)
Bond loan PRS09 4)
Bond loan PRS10 5)
Bond loan PRS11 6)
Fair value interest swaps
Fair value currency forwards
Accounts payable
Other current liabilities
Total financial liabilities
122.4
83.9
32.4
238.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
39.0
87.9
0.0
0.0
0.0
0.0
0.0
0.0
122.4
122.4
83.9
32.4
83.9
32.4
238.7
238.7
440.0
440.0
432.0
67.3
67.3
67.3
94.2
94.2
0.0
0.0
18.6
56.9
67.3
67.3
67.3
94.2
94.2
39.0
87.9
18.6
56.9
66.6
65.4
59.2
84.7
89.8
39.0
87.9
18.6
56.9
126.9
905.8
1 032.7
1 000.1
1) Fair value reflects current market conditions with the assumption that the credit margin would
increase from the actual 187.5 basis points to 200 basis points. The net present value of the
interest advantage, discounted with USD 5-year swap rate, is around USD 8 million.
2,3,4,5,6) Fair value reflects current market conditions based on prices estimated by the Norwegian
Securities Dealers Association as of 31 December 2014: PRS07 99.000, PRS08 97.146, PRS09
87.955, PRS10 89.895, PRS11 95.313.
Interest swaps are treated as effective hedges (hedge accounting), and changes in fair value affect
other comprehensive income, not profit and loss.
7)
Year ended 31 Dec 2014
Fair value currency forwards
Fair value interest swaps
Total financial assets/liabilities
Total
(87.9)
(39.0)
(126.9)
Level 1
0.0
0.0
0.0
Level 2
(87.9)
(39.0)
(126.9)
Level 3
0.0
0.0
0.0
57
NOTE 19: FINANCIAL RISKS AND DERIVATIVE FINANCIAL INSTRUMENTS
Prosafe operates on a global basis with cash flows and financing in various currencies. This means
that the Group is exposed to market risks related to fluctuations in exchange rates and interest
rates. Prosafe's presentation currency is USD, and financial risk exposure is managed with financial
instruments in accordance with internal policies and standards approved by the board of directors.
Currency risk
Prosafe is exposed to currencies other than USD associated with operating expenditure, capital
expenditure, interest-bearing debt, tax, cash and deposits. Cash and deposits are mainly denominated
in USD, GBP, EUR and NOK. Cash and deposits in currencies other than USD, are to a certain extent
natural hedges for any GBP, EUR and NOK liabilities. The proportion of the total currency exposure
hedged by use of financial derivatives will normally lie between 50 and 75 per cent for the next
12-month period, by using forward contracts.
Operating expenditure
Operating expenditure are mainly denominated in GBP and NOK, but depending on the country of
operation and the nationality of the crew, operating expenses can also be in SGD, SEK, EUR, USD and
BRL. Operating expenditure and maintenance related capital expenditure currencies other than USD is
typically currency-hedged using forward contracts with a time horizon of 9-12 months.
Capital expenditure
Capital expenditure will, depending on the origin of equipment and the location of the yard, tend to
be in USD, GBP, EUR and NOK. Planned capital expenditure in currencies other than USD is typically
currency-hedged independent of time horizon, by using forward contracts.
Interest bearing debt
Interest bearing debt consists of both USD and NOK denominated liabilities. The principal amounts
of liabilities denominated in other currencies than USD are fully hedged by using multiple forward
contracts with different settlement dates with a time horizon of up to 12 months. At maturity, the
forwards are rolled for further 12 months until debt maturity.
Tax
Tax liabilities predominantly consist of a NOK denominated deferred tax associated with the exit from
the Norwegian tonnage tax system effective 1 January 2006. Payable tax related to the deferred tax
liability is also currency-hedged.
Fair value estimates the gain or loss that would have been realised if the contracts had been closed
out at the balance sheet date. As of 31 December 2015, the fair value and maximum credit risk
exposure of forward exchange contracts was USD 40.7 million negative.
A negative fair market value on currency forwards will be associated with a positive effect on the
fair market value of the underlying hedged item. For example, a NOK depreciation will cause a
negative fair market value on currency forwards, but a positive effect on the fair market value of
future operating expenses, capital expenditure, NOK denominated interest-bearing debt and NOK
denominated tax liabilities. A NOK appreciation will have the opposite effects.
58
As of 31 December 2015, Prosafe had entered into the following forward exchange contracts:
Maturity
14.01.2016
20.01.2016
28.01.2016
03.02.2016
11.02.2016
29.02.2016
04.03.2016
31.03.2016
13.04.2016
13.04.2016
04.05.2016
13.05.2016
31.05.2016
08.06.2016
16.06.2016
02.07.2016
07.07.2016
11.07.2016
03.08.2016
08.08.2016
17.08.2016
03.09.2016
07.09.2016
09.09.2016
15.09.2016
05.10.2016
17.10.2016
17.10.2016
04.11.2016
09.11.2016
16.11.2016
07.12.2016
09.12.2016
15.12.2016
20.01.2017
08.02.2017
08.03.2017
Prosafe buy NOK Amount
Rate
Prosafe sell USD Amount
125 000 000
30 000 000
150 000 000
50 000 000
150 000 000
150 000 000
30 000 000
150 000 000
150 000 000
50 000 000
30 000 000
150 000 000
150 000 000
30 000 000
150 000 000
150 000 000
30 000 000
150 000 000
30 000 000
150 000 000
150 000 000
100 000 000
30 000 000
100 000 000
150 000 000
30 000 000
150 000 000
50 000 000
50 000 000
30 000 000
150 000 000
30 000 000
50 000 000
150 000 000
30 000 000
30 000 000
30 000 000
7.77
8.46
7.79
7.83
7.64
7.62
8.74
8.04
8.12
8.13
7.40
7.61
7.73
7.49
7.83
7.91
7.50
8.24
7.49
8.28
8.19
8.32
7.49
8.30
8.24
7.51
8.17
8.17
8.48
7.51
8.70
7.54
8.64
8.64
8.46
8.46
8.45
16 089 229
3 546 377
19 251 390
6 383 881
19 634 004
19 689 561
3 434 336
18 653 655
18 472 204
6 153 683
4 053 914
19 704 577
19 393 250
4 002 768
19 159 780
18 951 598
4 000 962
18 211 597
4 003 614
18 126 100
18 326 206
12 019 086
4 003 433
12 055 019
18 201 895
3 994 837
18 363 449
6 123 256
5 898 918
3 995 012
17 248 893
3 980 004
5 788 042
17 362 116
3 547 171
3 545 419
3 550 691
59
Maturity
11.02.2016
04.03.2016
13.04.2016
05.05.2016
10.06.2016
08.07.2016
12.08.2016
09.09.2016
05.10.2016
09.11.2016
07.12.2016
Prosafe buy GBP Amount
Rate
Prosafe sell USD Amount
6 000 000
6 000 000
6 000 000
6 000 000
6 000 000
4 000 000
4 000 000
4 000 000
4 000 000
4 000 000
4 000 000
1.52
1.54
1.48
1.54
1.52
1.55
1.55
1.52
1.49
1.49
1.49
9 134 668
9 228 572
8 869 770
9 217 471
9 128 850
6 210 440
6 193 440
6 098 000
5 957 116
5 964 692
5 967 028
Currency risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant exchange rates and
reflects the main effects on profit or loss and equity assuming that the change had occurred at the
balance sheet date. A 10% strengthening/weakening of the USD against NOK and GBP will have the
following effects. Exposures to foreign currency changes for all other currencies are not material.
Pre-tax effects
USD +10%
Re-valuation cash and deposits
Re-valuation currency forwards
Re-valuation NOK bonds
Total
USD -10%
Re-valuation cash and deposits
Re-valuation currency forwards
Re-valuation NOK bonds
Total
Interest rate risk
2015
2014
Income
statement
effect
OCI
effect
Income
statement
effect
OCI
effect
(3.2)
(40.0)
27.5
(15.7)
3.7
52.0
(33.5)
22.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(5.0)
(60.0)
29.0
(36.0)
5.0
71.0
(35.0)
41.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Interest on debt is in principle floating, but has been hedged to reduce the variability of cash flows in
the interest payments through the use of interest rate swap agreements. Prosafe evaluates the hedge
profile in relation to the repayment schedule of its loans, the company’s portfolio of contracts, cash
flow and cash in hand. The proportion hedged will normally lie between 75 and 100 per cent for all
loans.
60
Hedge accounting
The objective of the interest rate hedging is to reduce the variability of cash flows in the interest
payments for the floating-rate debt (i.e. cash flow hedging). Changes in the cash flows of the interest
rate swaps are expected to offset the changes in cash flows (i.e. changes in interest payments)
attributable to fluctuations in the benchmark interest rate on the part of the floating-rate debt that is
hedged. At the inception of the hedge and in subsequent periods, expected effectiveness during the
subsequent quarter is demonstrated based on a comparison of the change in fair value of the actual
swap designated as the hedging instrument and the change in fair value of a hypothetical swap
(dollar offset). If the terms of the swap and debt differ (notional amount, interest rate reset dates,
maturity/expiration date, underlying index) or the counterparty's ability to honour its obligation
under the swap change during the life of the hedge, the measurement of hedge ineffectiveness will
be based on a comparison of the change in fair value of the actual swap designated as the hedging
instrument and the change in fair value of a hypothetical swap (dollar offset). Changes in fair value
for interest swaps treated as effective hedges (hedge accounting) will affect other comprehensive
income, while interest swaps not treated as effective hedges (not hedge accounting) will affect equity
through the income statement. Interest swaps treated as effective hedges have been highly effective,
and no ineffectiveness has been recognised in the income statement.
As of 31 December 2015, Prosafe’s hedging agreements totalled USD 1 600 million (including
USD 300 million with forward start):
Notional amount
rate Maturity
type
value
Fixed
Swap
Fair
USD 100 million
1.2650 %
USD 150 million
1.7780 %
USD 150 million
2.1000 %
USD 150 million
1.6120 %
USD 150 million
1.6624 %
USD 150 million
1.3625 %
USD 150 million
2.2325 %
USD 150 million
2.7195 %
USD 150 million
2.3265 %
USD 150 million
3.6865 %
USD 150 million
3.8620 %
Total
2016
2017
2017
2017
2019
2018
2020
2020
2020
2021
2022
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
(0.4) hedge accounting
(1.6) hedge accounting
(2.7) hedge accounting
(1.4) hedge accounting
(0.7) hedge accounting
(0.1) hedge accounting
(4.0) hedge accounting
(7.4) hedge accounting
(4.6) hedge accounting
Started
Started
Started
Started
Started
Started
Started
Started
Started
(12.6) hedge accounting
Forward start
(13.1) hedge accounting
Forward start
(48.5)
Fair value of interest rate swap agreements are estimated using quoted market prices. The fair value
estimates the gain or loss that would have been realised if the contracts had been closed out at the
balance sheet date. As of 31 December 2015, the fair value and maximum credit risk exposure of
interest rate swap agreements was USD 48.5 million negative.
Interest rate risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant forward curves and
reflects the main effects on profit or loss and equity assuming that the change had occurred at the
balance sheet date. A forward curve shift of ±100bps is applied in the analysis.
61
Pre-tax effects
Forward curve +100bps
Re-valuation interest rate swaps
Total
Forward curve -100bps
Re-valuation interest rate swaps
Total
2015
2014
Income
statement effect
OCI
effect
Income
statement effect
OCI
effect
0.0
0.0
39.2
39.2
0.0
0.0
60.1
60.1
0.0
0.0
(70.7)
(70.7)
0.0
0.0
(60.1)
(60.1)
Changes in other comprehensive income related to financial instruments
As of 31 December 2015, the following changes in other comprehensive income were related to
financial instruments:
Re-valuation interest rate swaps
Ineffectiveness
Total
Change
28.5
0.0
28.5
2015
(9.5)
0.0
(9.5)
2014
(38.0)
0.0
(38.0)
Credit risk
The Gulf of Mexico contracts contain a cancellation clause allowing the ultimate customer, Pemex,
to cancel the contract with 30 days notice without compensation, if the financing of the project is
cancelled. These clauses reflect the crisis that Mexico saw during the 1980s. Prosafe experienced in
March 2016 that the two remaining contracts in Mexico were suspended, and the company is prepared
that these contracts may be cancelled due to the ongoing crises.
In line with industry practice, other contracts normally contain clauses which give the customer
an opportunity for early cancellation under specified conditions. Providing Prosafe has not acted
negligently, however, the effect on results in such cases will normally be wholly or partly offset by a
financial settlement in the company’s favour. Following a potential notice of convenience termination,
the customer will have to pay Prosafe a substantial part of the remaining contract value.
Credit assessment of financial institutions issuing guarantees in favour of Prosafe, yards,
sub-contractors and equipment suppliers is part of Prosafe’s project evaluations and risk analyses.
The counterparty risk is in general limited when it comes to Prosafe’s clients, since these are typically
major oil companies and national oil companies.
As of 31 December 2015, there is no objective evidence that accounts receivable is impaired, and no
impairment loss has been recognised in the income statement.
Accounts receivables
31 December 2015
31 December 2014
Total
60.0
83.9
Not due
< 30 days 30 - 60 days
61-90 days
> 90 days
59.5
60.0
0.3
15.8
0.2
8.1
0.0
0.1
0.0
0.0
62
Liquidity risk
Prosafe is exposed to liquidity risk in a scenario when the Group’s cash flow from operations is
insufficient to cover payments of financial liabilities. Prosafe manages liquidity and funding on a group
level. In order to mitigate the liquidity risk, Prosafe makes active use of a system for planning and
forecasting the development of its liquidity, and utilises scenario analyses to secure stable and sound
development in order to maintain sufficient cash to cover its financial and operational obligations.
In February 2015, Prosafe completed the refinancing of two bank facilities. In Q3 2015, the Board of
Directors decided to suspend dividend payments in light of the near term reduction in industry activity
levels.
As of 31 December 2015, Prosafe had a liquidity reserve totalling USD 157.1 million (cash and deposits of
USD 57.1 million and undrawn portion of revolving credit facility of USD 100 million). Under the existing
credit facility agreements, the Group is required to maintain minimum liquidity of USD 65 million
(including up to USD 25 million of total commitments available for utilisation).
The continued negative development in the oil and gas industry has increased the risk of reduced
charter revenues in the short and mid term. This development has increased the liquidity risk compared
to prior years. The Company has significant debt maturities in 2016 and 2017. Although the Company
views the longer term prospects as positive, the Company has taken measures to improve the situation.
This includes an agreement with its banking syndicate on an option to voluntarily skip two scheduled
amortisations amounting in 2016 and/or 2017.
As of 31 December 2015, the Group's main financial liabilities had the following remaining contractual
maturities:
Per year
Interest-bearing debt
(downpayments) 1)
Interest-bearing debt
(interest including interest swaps) 2)
Accounts payable
and other current liabilities
Total
Per quarter 2016
Interest-bearing debt
(downpayments) 1)
Interest-bearing debt
(interest including interest swaps) 2)
Accounts payable and other current
liabilities
2016
139.5
2017
210.8
2018
233.5
2019
2020 →
233.5
429.7
74.5
84.4
85.0
86.3
146.4
17.8
0.0
0.0
0.0
0.0
231.8
295.2
318.5
319.8
576.1
Q1 2016 Q2 2016 Q3 2016 Q4 2016
84.5
0.0
55.0
0.0
Total
139.5
19.9
17.5
17.5
19.6
74.5
17.8
0.0
0.0
0.0
17.8
Total
122.2
17.5
72.5
19.6
231.8
1) In January 2016, the syndicate banks granted two voluntary skip options in an aggregate amount
of USD 130 million for the USD 1,300 million credit facilities. Prosafe has the right to exercise the
options until and including 31 December 2017.
2) Based on forecasted average debt, average LIBOR per 31 December 2015 and average weighted
margin.
63
As of 31 December 2015, the commitments under the USD 1,300 million credit facility totalled USD
1,245 million (including the USD 200 million term loan for financing of Safe Zephyrus), of which USD
945 was utilised. As of year-end, available amount under the revolving credit facility was USD 100
million, meaning that scheduled downpayment for 2016 amounted to USD 10 million. Following
delivery of Safe Zephyrus, scheduled semi-annual amortisations amount to USD 65 million. At
year-end, the USD 288 facility was unutilised and consists of two tranches of USD 144 million each.
Following delivery of Safe Notos and Safe Eurus, each tranche which will be reduced quarterly with
USD 3 million. Reference is made to note 15 for further information.
As of 31 December 2014, the Group's main financial liabilities had the following remaining
contractual maturities:
Interest-bearing debt (downpayments) 1)
Interest-bearing debt (interest including interest swaps) 2)
Accounts payable and other current liabilities
Total
2015
2016
2017
2018 2019 →
0.0
67.3 382.3
56.9
18.6
68.3
70.5
0.0
0.0
94.2
67.0
0.0
286.3
100.0
0.0
75.5 135.6 452.8 161.2
386.3
As of 31 December 2014, the availability under the credit facility secured in 2011 totalled USD 655
million (USD 215 million undrawn credit lines), meaning that the first actual downpayment on the
credit facility will not occur until 2016.
Capital management
The primary objective of the Group's capital management is to ensure that it maintains a healthy
capital structure in line with economic conditions. Prosafe manages the total of shareholder's equity
and long term debt as their capital. Prosafe's main tool to assess its capital structure is the leverage
ratio, which is calculated by dividing net interest-bearing debt (excluding debt related to newbuilds)
including bank guarantees, by EBITDA over the last 12 months. To stay in compliance with financial
covenants, the leverage ratio is not allowed to exceed 5.0 up to and including 31 December 2015, and
6.0 thereafter. At 31 December 2015 (2014), the leverage ratio was 2.5 (1.7).
NOTE 20: CASH AND DEPOSITS
Restricted cash deposits (withholding personal income tax)
Free cash and short-term deposits
Total cash and deposits
NOTE 21: OTHER CURRENT ASSETS
Receivables
Prepayments
Stock
Other current assets
Total other current assets
64
2015
2014
0.2
56.9
57.1
0.2
122.2
122.4
2015
2014
7.2
4.2
0.9
19.1
31.4
16.7
5.8
0.8
15.7
39.0
NOTE 22: RELATED PARTY DISCLOSURES
The financial statements comprise the parent company, Prosafe SE, and the subsidiaries listed below.
Company name
Prosafe AS
Prosafe Management AS
Prosafe Offshore AS
Prosafe (UK) Holdings Limited
Prosafe Rigs Limited
Prosafe Offshore Limited
Prosafe Rigs (Cyprus) Limited
Prosafe Holding Limited
Prosafe Offshore Accommodation Ltd
Prosafe Rigs Pte. Ltd.
Prosafe Offshore Pte. Limited
Prosafe Offshore Employment Company Pte. Limited
Prosafe Offshore Services Pte. Ltd.
Prosafe Offshore Asia Pacific Pte. Ltd.
Prosafe Offshore S.a.r.l.
Prosafe Offshore Sp.zo.o.
Prosafe Offshore BV
Prosafe Services Maritimos Ltda
Country
of incorporation Ownership
Norway
Norway
Norway
United Kingdom
United Kingdom
United Kingdom
Cyprus
Cyprus
Jersey
Singapore
Singapore
Singapore
Singapore
Singapore
Luxembourg
Poland
Netherlands
Brazil
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Voting
share
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Transactions and outstanding balances within the Group have been eliminated in full.
Shares owned by senior officers and directors at 31 December 2015:
(includes shares owned by wholly-owned companies)
Senior officers:
Karl Ronny Klungtvedt - CEO
Robin Laird - Deputy CEO
Stig Christiansen - CFO
Harald Espedal - chair
Christian Brinch - deputy chair
Roger Cornish - director
Carine Smith Ihenacho - director
Nancy Ch. Erotocritou - director
Tasos Ziziros - director
Shares
72 500
58 000
0
0
0
7 000
0
0
0
65
NOTE 23: CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
As at 31 December the Group had three new builds under construction. Safe Zephyrus was delivered
in January 2016. The amount paid on delivery equalled USD 230 million. Safe Notos was delivered in
February 2016. The amount paid on delivery equalled USD 180 million. Sellers' credits were given for
these two vessels. (See more details in note 24). The estimated final instalment on the third new build,
the Safe Eurus, is USD 180 million. This vessel is scheduled to be delivered in Q3 2016.
NOTE 24: EVENTS AFTER THE BALANCE SHEET DATE
Amended credit facilities
In December 2015/January 2016, the company agreed with its bank syndicates to amend the USD
1,300 million and USD 288 million credit facilities. The additional liquidity, flexibility and headroom
created by the amendments, which cover both covenant headroom and voluntary option to skip two
scheduled amortisations, provides Prosafe with increased operational and financial flexibility and
makes the company more robust in a challenging market. The amendments to the credit facilities
include:
Leverage ratio (ratio of net borrowings divided by adjusted EBITDA):
1 January 2016 - 31 December 2018: Net debt/EBITDA < 6.0
1 January 2019 and thereafter: Net debt//EBITDA < 5.0
"Net debt" is excluding debt related to new builds under construction and conversions, and "EBITDA"
includes the annualisation of contribution from such vessels that have not been in operation for a full
year.
Equity ratio to be minimum 25 per cent from 31 December 2015 until 31 December 2017, and 30 per
cent thereafter.
Prosafe has secured an option to voluntary skip scheduled amortisations amounting to two
instalments of USD 65 million under the USD 1,300 million facility, in total amounting to USD 130
million. These voluntary amortisations options will be available to the company immediately and until
31 December 2017, subject to completion of formal documentation.
Other conditions: No dividends, bond- or equity buy-backs from 31 December 2015 unless;
i) all voluntary skipped amortisations have been prepaid or cancelled; and
ii) a 12 month financial forecast has been provided which confirms compliance with original financial
covenants, except for the equity ratio to be minimum 35 per cent of book equity.
Amended covenants bond loans
In February 2016, bondholders approved adjustments of the financial covenants in all outstanding
bond issues, in order to align with the covenants in the bank facilities. The amendments include:
Leverage ratio (ratio of net borrowings divided by adjusted EBITDA):
31 March 2016 - 31 December 2018: Net debt/EBITDA < 6.0
1 January 2019 and thereafter: Net debt//EBITDA < 5.0
"Net debt" is excluding debt related to new builds under construction and conversions, and "EBITDA"
includes the annualisation of contribution from such vessels that have not been in operation for a full
year.
66
Equity ratio to be minimum 25 per cent from 31 March 2016 until 31 December 2017, and 30 per cent
thereafter.
Delivery of new builds and seller credits
The new build, Safe Zephyrus, was delivered from Jurong Shipyard in Singapore in January 2016.
The final delivery instalment was reduced by USD 30 million, which represents a seller's credit from
Jurong Shipyard Pte Ltd. This amount is to be repaid in a single payment on or before 15 June 2017.The
company took delivery of Safe Notos in February 2016. The final delivery instalment will be reduced
by USD 29 million, by way of a seller’s credit from Cosco (Qidong) Offshore Co., Ltd. This amount is
repayable in a single payment by 31 December 2016.
Mexico market update
On 7 March 2016 Prosafe announced that it had been informed by its Mexican client Cotemar Group
("Cotemar"), that Safe Regency will be suspended by Petróleos Mexicanos ("Pemex") from mid-March
2016 and that it is likely that Safe Lancia will also be suspended by Pemex by mid-March 2016. On
16 March 2016, Prosafe confirmed that it had been informed by Cotemar that the Safe Lancia will
be suspended by Pemex from mid-March 2016. This is in response to the fact that Pemex is cutting
spending in order to adjust its budget to reflect an oil price of USD 25 per barrel. The Group has
decided to scrap three of its oldest units, the Jasminia, Safe Hibernia and Safe Britannia, and to cold
stack other units starting with the Safe Astoria.
Temporary liquidity bank covenant
In April 2016, the Company agreed with its lenders an amendment to the credit faciltites. A new
bank covenant minimum liquidity level of USD 20 million was set until the end of the third quarter of
2016. The new temporary covenant are applicable to both the USD 1.3 billion facility and the USD 288
million new build financing facility.
Financial restructuring plan
A dialogue has been commenced with the Company’s key stakeholders, including the senior lenders,
and the Company is currently working with stakeholders and advisors to evaluate alternatives to
improve the financial situation of the Company. Amendments to the bank and bond agreements will
be required in order to secure a robust financial foundation and to safeguard and further strengthen
Prosafe’s market leading position in the industry. The Company intends to communicate its financial
plan during the second quarter of 2016.
NOTE 25: GOING CONCERN
The Board of Directors confirms that the accounts have been prepared under the assumption that
the Company is a going concern and that this assumption is realistic at the date of the accounts. This
assumption is based on the budgets for the year and the Group’s long-term forecasts for the following
years. As a result of the suspension of the two contracts in Mexico and the increased liquidity risk, a
material uncertainty around the going concern assumption has arisen. The Board of Directors has
evaluated the financial forecasts including the assumptions for utilisation of the vessels and the
charter day rates. These assumptions are based on prudent estimates compared to historical actuals.
In the evaluation of the financial forecasts, factors such as the order backlog and cost saving initiatives
have been considered. As referred to in the financial presentation of the Q4 2015 result, the Group has
already achieved annual cost savings amounting to USD 15 million. There is a target to double these
annual savings. Cost savings to date and going forward include many cost categories, e.g. offshore,
travel and salaries. Activity level is forecasted to rebound from 2018 as industry cost reductions are
taking full effect.
67
Moreover, the Board of Directors has evaluated the Company’s ability to reach a solution in the
ongoing dialogue with the Company’s key stakeholders, and concluded that it is likely to achieve
a favourable outcome of this process. This conclusion is an important factor in the going concern
assumption. The Board of Directors intends to announce a plan to secure financing of the Company
shortly. As of today, such a plan is likely to involve a combination of one or more different alternatives
including but not limited to, renegotiated restrictive covenants and debt restructuring. For additional
comments on liquidity risk, please refer to note 19.
68
69
ACCOUNTS PROSAFE SE
70
INCOME STATEMENT - PROSAFE SE
(USD 1 000)
Note
2015
2014
Income from investments in subsidiaries
Impairment of shares in subsidiaries
Results of investing activities
Operating expenses
Depreciation
Operating profit
Other financial income
Other financial expenses
Net financial items
(Loss)/profit before taxes
Taxes
Net (loss)/profit
7
2
3
4, 5
4, 5
5
6
9 670
(331 209)
(321 539)
(11 634)
(8)
(333 180)
167 061
(252 063)
(85 002)
(418 182)
(1)
739 646
(483 609)
256 037
(11 950)
(10)
244 077
140 817
(198 649)
(57 832)
186 245
(1)
(418 183)
186 244
Attributable to the owners of the company
(418 183)
186 244
STATEMENT OF COMPREHENSIVE INCOME - PROSAFE SE
(USD 1 000)
Net (loss)/profit
2015
2014
(418 183)
186 244
Other comprehensive income to be reclassified to profit or loss in
subsequent periods
Net loss on cash flow hedges
(9 530)
(38 043)
Other comprehensive loss to be reclassified to profit or loss in
subsequent periods
(9 530)
(38 043)
Total comprehensive (loss)/income for the year, net of tax
(427 713)
148 201
Attributable to the owners of the company
(427 713)
148 201
71
STATEMENT OF FINANCIAL POSITION - PROSAFE SE
(USD 1 000)
ASSETS
Tangible assets
Shares in subsidiaries
Note
31/12/15
31/12/14
3
7
19
27
2 227 991
2 335 450
Intra-group long-term receivables
12, 14
556 225
547 320
Total non-current assets
Cash and deposits
Other current assets
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Share premium reserve
Total paid-in equity
Retained earnings
Total retained earnings
Total equity
Interest-bearing long-term debt
Derivatives
Interest-free long-term liabilities
Total long-term liabilities
Interest-bearing current debt
Derivatives
Intra-group current liabilities
Other interest-free current liabilities
Total current liabilities
Total equity and liabilities
14
8, 14
9
10
14
14, 15
10, 15
14
12, 14, 15
11, 14, 15
2 784 235
2 882 797
12 194
22 557
34 751
17 285
13 747
31 032
2 818 986
2 913 829
72 135
804 700
876 835
491 143
491 143
1 367 978
1 107 464
48 510
1 733
1 157 707
139 500
40 707
105 053
8 041
293 301
65 894
745 109
811 003
952 836
952 836
1 763 839
830 142
38 980
2 081
871 203
0
74 675
197 838
6 275
278 787
2 818 986
2 913 829
On 27 April 2016 the Board of Directors of Prosafe SE approved and authorised these financial
statements for issue.
Larnaca, 27 April 2016
Harald Espedal
Christian Brinch
Roger Cornish
Nancy Ch. Erotocritou
Non-executive Chairman
Non-executive Deputy Chairman
Non-executive Director
Non-executive Director
Carine Smith Ihenacho
Anastasis Ziziros
Glen Ole Rødland
Non-executive Director
Non-executive Director
Non-executive Director
72
CASH FLOW STATEMENT - PROSAFE SE
(USD 1 000)
Note
2015
2014
Cash flow from operating activities
Profit/loss before taxes
Unrealised currency loss / (gain) on long-term debt
Depreciation
Impairment shares in subsidiaries
Interest income
Interest expenses
Change in working capital
Taxes paid
Other items from operating activities
Net cash flow from operating activities
Cash flow from investing activities
Acquisition of shares
Change in intra-group balances
Interest received
Net cash flow from investing activities
Cash flow from financing activities
Proceeds from issue of share capital
New interest-bearing long-term debt
Repayment of interest-bearing long-term debt
Dividends paid
Interest paid
Net cash flow from financing activities
Net cash flow
Cash and deposits at 1 January
Cash and deposits at 31 December
3
6
12
9
10
10
(418 182)
(56 715)
8
331 209
(14 506)
54 381
(7 044)
(1)
(34 315)
(145 165)
(223 750)
(101 690)
14 506
(310 933)
65 832
1 290 000
(816 463)
(33 980)
(54 381)
451 008
(5 090)
17 285
12 194
186 245
(83 701)
10
483 609
(5 974)
45 309
1 090
(1)
67 704
694 292
(320 018)
(335 514)
5 974
(649 558)
0
332 220
(198 000)
(125 774)
(45 309)
(36 863)
7 871
9 414
17 285
73
STATEMENT OF CHANGES IN EQUITY - PROSAFE SE
(USD 1 000)
Share
Share
Retained
Cash flow
capital
premium
earnings
hedges
Total
equity
Equity at 31 December 2013
65 894
745 109
922 328
8 081
1 741 412
Net profit
Other comprehensive income
Total comprehensive income 1)
Dividends
0
0
0
0
0
0
0
0
186 244
0
186 244
(125 774)
0
186 244
(38 043)
(38 043)
(38 043)
148 201
0
(125 774)
Equity at 31 December 2014
65 894
745 109
982 798
(29 962)
1 763 839
Net profit
Other comprehensive income
Total comprehensive income 1)
Dividends
Share issue
0
0
0
0
0
0
0
0
0
(418 183)
(33 980)
6 241
59 591
0
(9 530)
(9 530)
0
0
(9 530)
(427 713)
(33 980)
65 832
(418 183)
0
(418 183)
Equity at 31 December 2015
72 135
804 700
530 635
(39 492)
1 367 978
1) Total comprehensive income is attributable to the owners of the company
NOTES - PROSAFE SE
All figures in USD 1 000 unless otherwise stated.
NOTE 1: ACCOUNTING POLICIES
The financial statements have been prepared in accordance with the International Financial Reporting
Standards (IFRS) endorsed by the European Union (EU) and the requirements of the Cyprus Companies
Law, Cap 113. The accounting policies applied to the consolidated accounts have also been applied to
the parent company, Prosafe SE. THe parent company financial statements should be read in
conjunction with the consolidated accounts. The notes to the consolidated accounts provide
additional information to the parent company's accounts which is not presented here separately. The
Company's functional currency is US dollars (USD), and the financial statements are presented in USD.
Investments in subsidiaries are measured at historic cost, unless there is any indication of
impairment. In case of impairment, an investment is written down to recoverable amount.
74
NOTE 2: OPERATING EXPENSES
Services from subsidiaries
Directors’ fees
Salaries and management bonus
Other remuneration
Payroll taxes
Share option costs
Pension expenses
Auditors' audit fees
Auditors' other fees
Other operating expenses
Total operating expenses
NOTE 3: TANGIBLE ASSETS
Acquisition cost 31.12.13
Additions
Disposals at acquisition cost
Acquisition cost 31.12.14
Additions
Disposals at acquisition cost
Acquisition cost 31.12.15
Accumulated depreciation 31.12.13
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31.12.14
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31.12.15
Carrying value 31.12.15
Carrying value 31.12.14
Depreciation rate (%)
2015
2014
6 692
8 203
574
453
37
34
(7)
(92)
24
10
731
620
75
46
(403)
(69)
270
6
3 909
11 634
2 471
11 950
Equipment
Total
206
204
5
0
5
0
211
211
0
0
0
0
211
211
174
0
10
184
0
8
174
0
10
184
0
8
192
192
19
27
20-30
19
27
-
75
NOTE 4: OTHER FINANCIAL ITEMS
Interest receivable from subsidiaries
Other interest receivable
Loan from subsidiary written off
Currency gain
Fair value adjustment currency forwards
Other financial income
Total other financial income
Interest payable to subsidiaries
Interest expenses
Currency loss
Fair value adjustment currency forwards
Other financial expenses
Total other financial expenses
2015
2014
14 436
70
0
5 917
57
8 407
108 254
126 437
44 123
178
0
0
167 061
140 817
0
(123)
(54 381)
(45 186)
(178 280)
(72 047)
0
(68 170)
(19 402)
(13 123)
(252 063)
(198 649)
NOTE 5: FINANCIAL ITEMS - IAS 39 CATEGORIES
Fair value
Financial
liabilities
through
measured at
Loans and
profit and
amortised
Year ended 31 Dec 2015
receivables
loss
cost
Total
Interest income
Currency gain 1)
Fair value adjustment currency forwards
Other financial income
Total financial income
Interest expenses
Currency loss 1)
Other financial expenses
Total financial expenses
14 506
0
0
0
14 506
0
0
0
0
Net financial items
14 506
0
0
0
0
0
0
0
0
0
0
0
0
44 123
178
14 506
108 254
44 123
178
44 301
167 061
(54 381)
(54 381)
0
(178 280)
(19 402)
(73 783)
(19 402)
(252 063)
(29 482)
(85 002)
1) Excluded from the category breakdown, but added to the total for net effect.
76
Financial
Fair value
liabilities
through
measured at
Loans and
profit
amortised
Year ended 31 Dec 2014
receivables
and loss
cost
Total
Interest income
Currency gain 1)
Loan from subsidiary written off
Total financial income
Interest expenses
Currency loss 1)
Fair value adjustment derivatives
Other financial expenses
Total financial expenses
5 974
0
0
5 974
0
0
0
0
0
0
0
0
0
0
0
(68 170)
0
(68 170)
0
0
8 407
8 407
(45 309)
0
0
(13 123)
(58 432)
5 974
126 437
8 407
140 818
(45 309)
(72 047)
(68 170)
(13 123)
(198 649)
Net financial items
5 974
(68 170)
(50 025)
(57 832)
1) Excluded from the category breakdown, but added to the total for net effect.
NOTE 6: TAXES
(Loss)/profit before taxes
Permanent differences
Change in tax loss carried forward
Tax base
Taxes
Temporary differences:
Loss carried forward
Basis for deferred tax liability (+)/benefit (-)
Deferred tax liability (+)/benefit (-)
Taxes payable at 31 December
2015
2014
(418 182)
532 245
399 962
(506 554)
18 220
(25 691)
0
1
0
1
(44 873)
(63 093)
(44 873)
(63 093)
0
0
0
0
No deferred tax asset has been recognised 1:1048576 respect of the tax loss carried forward as
utilisation of this deferred tax asset is deemed not probable. Tax losses for each year are carried
forward for 5 years. The tax rate in Cyprus is 12.5%.
77
Reconciliation in accordance with IAS 12.81
(Loss)/profit before taxes
Corporation tax thereon at the applicable tax rates
Tax effect of expenses not deductible for tax purposes
Tax on income not taxable in determining taxable profit
Effect of unused current year tax losses
Special contribution to defence fund
Tax charge
NOTE 7: SHARES IN SUBSIDIARIES
(Share capital and carrying value in 1 000)
2015
2014
(418 182)
532 245
(52 273)
30 472
66 531
37 777
(20 280)
(108 868)
680
4 560
1
1
1
1
Company
Prosafe AS
Prosafe Offshore AS
Prosafe Management AS
Prosafe (UK) Holdings Ltd
Prosafe Offshore Pte Ltd
Consafe Offshore AB
Prosafe Offshore Services Pte Ltd
Prosafe Asia Pacific Pte Ltd
Prosafe Rigs Pte Ltd
Total carrying value
Share
Carrying
Carrying
capital
value 2015
value 2014 Ownership
NOK
NOK
NOK
GBP
USD
SEK
USD
SGD
USD
100
100
100
11 000
10 000
27 786
10
10
69 316
69 316
270
15
270
15
9 826
9 826
244 533
320 037
0
150
7
4 371
150
0
2 500 040
1 903 873
1 931 464
2 227 991
2 335 450
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
91 %
Consafe Offshore AB was liquidated in 2015.
In the income statement for 2015, the following impairment charges were made:
Prosafe Rigs Pte Ltd USD 255.7 million and Prosafe Offshore Pte Ltd USD 75.5 million.
In the income statement for 2014, the following impairment charges were made:
Consafe Offshore AB USD 137.6 million, Prosafe Rigs Pte Ltd USD 333 million and Prosafe (UK)
Holdings Ltd USD 13 million.
There are mortgages on the shares in Prosafe Rigs Pte Ltd and Prosafe Offshore Services Pte Ltd. Please
refer to note 13.
78
NOTE 8: OTHER CURRENT ASSETS
Current receivables from group companies
Other current assets
Total other current assets
The main part of other current assets consists of capitalised borrowing costs.
NOTE 9: SHARE CAPITAL
2015
2014
4 218
18 339
22 557
81
13 666
13 747
2015
2014
Authorised shares as of 31 December
275 924 148
275 924 148
Issued and paid number of ordinary shares as of 31 December
259 570 359
235 973 059
Nominal value
EUR 0,25
EUR 0,25
On 8 December 2015, Prosafe completed a private placement of 23 597 300 new shares directed
towards Norwegian and international institutional investors. The placement was made at a
subscription price of NOK 25 per share. Net proceeds amounted to USD 65.8 million.
NOTE 10: INTEREST-BEARING DEBT
As of 31 December 2015, Prosafe SE's interest-bearing debt totalled about USD 1,247 million. Loans
secured by mortgages (credit facility) accounted for USD 945 million of this total and unsecured bond
loans accounted for about USD 302 million.
Credit facility
Bond loans
Total interest-bearing debt
Debt in NOK
Debt in USD
Total interest-bearing debt
Long-term interest-bearing debt
Current interest-bearing debt
Total interest-bearing debt
For further information, see note 15 of the consolidated accounts.
2015
2014
945 000
440 000
301 964
390 142
1 246 964
830 142
301 964
390 142
945 000
440 000
1 246 964
830 142
1 107 464
830 142
139 500
0
1 246 964
830 142
79
NOTE 11: OTHER INTEREST-FREE CURRENT LIABILITIES
Accrued interest costs
Other current liabilities
Total other interest-free current liabilities
NOTE 12: INTRA-GROUP BALANCES
NOK loan to Prosafe AS
USD loan to Prosafe Offshore Pte Ltd
Intra-group long-term receivables
2015
2014
4 957
3 083
8 041
3 776
2 500
6 275
2015
2014
76 225
66 028
480 000
481 292
556 225
547 320
Loan agreements with subsidiaries are made at market prices using 3M NIBOR (NOK loan) and 3M LI-
BOR (USD loan) interest rates and a margin of 2.00%. Outstanding balances at year-end are unsecured,
and settlement normally occurs in cash.
Transactions with related parties
2015
2014
Transactions
Administrative services from subsidiaries
Interest income
Interest expenses
Dividend
(6 692)
14 436
0
(8 203)
5 917
(123)
9 670
739 646
Prosafe AS and Prosafe Management AS are performing services on behalf of Prosafe SE relating to
management, corporate activities, investor relations, financing and insurance. The services are in-
voiced on monthly basis and paid on market terms. Please refer to note 7 to the consolidated accounts
for disclosure of remuneration to directors.
Year-end balances
Current receivables of the ultimate parent to subsidiaries
Intra-group long-term receivables
Current payables from the ultimate parent to subsidiaries
4 218
81
556 225
547 320
105 053
197 838
Current receivables and payables are not subject to any interest calculation. The balances will be set-
tled on ordinary market terms.
80
NOTE 13: MORTGAGES AND GUARANTEES
As of 31 December 2015, Prosafe’s interest-bearing debt secured by mortgages totalled USD 945
million. The debt was secured by mortgages on the accommodation/service vessels Safe Astoria, Safe
Bristolia, Safe Caledonia, Safe Concordia, Safe Scandinavia, Regalia, Safe Boreas (net carrying value
USD 1,391 million) and Safe Zephyrus when delivered. Negative pledge clauses apply on shares in the
vessel owning subsidiaries. Earnings accounts are pledged as security for the credit facilities, but cash
will only be restricted if a continuing event of default occurs.
Bank guarantees amounted to NOK 290 million at 31 December 2015 (no outstanding bank
guarantees as at 31 December 2014). The guarantees were secured by parent company guarantee
and mortgages on the accommodation/service vessels Safe Regency, Safe Lancia, Safe Hibernia, Safe
Britannia and Jasminia (net carrying value USD 0 million).
As of 31 December 2015, Prosafe had issued parent company guarantees to customers on behalf of its
subsidiaries in connection with the award and performance of contracts totalling approximately USD
124 million.
As of 31 December 2014, Prosafe’s interest-bearing debt secured by mortgages totalled USD 440
million. The debt was secured by mortgages on shares in Prosafe Rigs Pte Ltd and Prosafe Offshore Pte
Ltd, and the accommodation/service vessels owned by these entities. The book value of the
mortgaged fleet was USD 1 027.3 million. Prosafe had issued parent company guarantees to
customers on behalf of its subsidiaries in connection with the award and performance of contracts.
81
NOTE 14: FINANCIAL ASSETS AND LIABILITIES
As of 31 December 2015, Prosafe SE had financial assets and liabilities in the following categories:
Financial
Fair value
liabilities
through
measured at
Loans and
profit
amortised
Year ended 31 Dec 2015
receivables
and loss
cost
Book value
Intra-group long-term receivable
Cash and deposits
Other current assets
Total assets
556 225
12 194
22 557
590 976
Credit facility
Bond loan PRS07
Bond loan PRS08
Bond loan PRS09
Bond loan PRS10
Bond loan PRS11
Fair value derivatives
Interest-free long-term liabilities
Intra-group current liabilities
Other interest free current liabilities
Total liabilities
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
89 217
0
0
0
0
0
0
0
556 225
12 194
22 557
590 976
945 000
945 000
29 515
56 760
56 760
79 464
79 464
0
1 733
29 515
56 760
56 760
79 464
79 464
89 217
1 733
105 053
105 053
8 041
8 041
89 217
1 361 791
1 451 008
82
As of 31 December 2014, Prosafe SE had financial assets and liabilities in the following categories:
Fair value
Financial
liabilities
through
measured at
Loans and
profit and
amortised
Year ended 31 Dec 2014
receivables
loss
cost
Book value
Intra-group long-term receivable
Cash and deposits
Other current assets
Total assets
547 320
17 285
13 747
578 352
Credit facility
Bond loan PRS07
Bond loan PRS08
Bond loan PRS09
Bond loan PRS10
Bond loan PRS11
Fair value derivatives
Interest-free long-term liabilities
Intra-group current liabilities
Other interest free current liabilities
Total liabilities
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
113 654
0
0
0
0
0
0
0
547 320
17 285
13 747
578 352
440 000
440 000
67 266
67 266
67 266
94 172
94 172
0
2 081
197 838
6 275
67 266
67 266
67 266
94 172
94 172
113 654
2 081
197 838
6 275
113 654
1 036 336
1 149 990
For further information, see note 18 of the consolidated accounts.
NOTE 15: MATURITY PROFILE LIABILITIES
As of 31 December 2015, Prosafe SE's main financial liabilities had the following remaining
contractual maturities:
Year ended 31 Dec 2015
2016
2017
2018
2019
2020 →
Interest-bearing debt
(downpayments)
139 500
210 800
233 500
233 500
429 700
Interests incl interest swaps
74 500
84 400
85 000
86 300
146 400
Intra-group current liabilities
105 053
0
Interest-free long-term liabilities
0
2 081
Other interest-free current liabilities
8 041
0
0
0
0
0
0
0
0
0
0
Total
327 094
297 281
318 500
319 800
576 100
83
As of 31 December 2014, Prosafe SE's main financial liabilities had the following remaining
contractual maturities:
Year ended 31 Dec 2014
2015
2016
2017
2018
2019 →
Interest-bearing debt
(downpayments)
0
67 300
382 300
94 200
286 300
Interests incl interest swaps
56 900
68 300
70 500
67 000
100 000
Intra-group current liabilities
197 838
0
Interest-free long-term liabilities
0
2 081
Other interest-free current liabilities
6 275
0
0
0
0
0
0
0
0
0
0
Total
261 013
137 681
452 800
161 200
386 300
NOTE 16: EVENTS AFTER THE BALANCE SHEET DATE
Amended credit facilities
In December 2015/January 2016, the company agreed with its bank syndicates to amend the USD
1,300 million and USD 288 million credit facilities. The additional liquidity, flexibility and headroom
created by the amendments, which cover both covenant headroom and voluntary option to skip two
scheduled amortisations, provides Prosafe with increased operational and financial flexibility and
makes the company more robust in a challenging market. The amendments to the credit facilities
include:
Leverage ratio (ratio of net borrowings divided by adjusted EBITDA):
1 January 2016 - 31 December 2018:
1 January 2019 and thereafter:
Net debt/EBITDA < 6.0
Net debt//EBITDA < 5.0
"Net debt" is excluding debt related to new builds under construction and conversions, and "EBITDA"
includes the annualisation of contribution from such vessels that have not been in operation for a full
year.
Equity ratio to be minimum 25 per cent from 31 December 2015 until 31 December 2017, and 30 per
cent thereafter.
Prosafe has secured an option to voluntary skip scheduled amortisations amounting to two
instalments of USD 65 million under the USD 1,300 million facility, in total amounting to USD 130
million. These voluntary amortisations options will be available to the company immediately and until
31 December 2017, subject to completion of formal documentation.
Other conditions: No dividends, bond- or equity buy-backs from 31 December 2015 unless;
i) all voluntary skipped amortizations have been prepaid or cancelled; and
ii) a 12 month financial forecast has been provided which confirms compliance with original financial
covenants, except for the equity ratio to be minimum 35 per cent of book equity.
84
Amended covenants, bond loans
In February 2016, bond holders approved adjustments of the financial covenants in all outstanding
bond issues, in order to align with the covenants in the bank facilities. The amendments include:
Leverage ratio (ratio of net borrowings divided by adjusted EBITDA):
31 March 2016 - 31 December 2018:
1 January 2019 and thereafter:
Net debt/EBITDA < 6.0
Net debt//EBITDA < 5.0
"Net debt" is excluding debt related to new builds under construction and conversions, and "EBITDA"
includes the annualisation of contribution from such vessels that have not been in operation for a full
year.
Equity ratio to be minimum 25 per cent from 31 March 2016 until 31 December 2017, and 30 per cent
thereafter.
Temporary liquidity bank covenant
In April 2016, the Company agreed with its lenders an amendment to the credit faciltites. A new
bank covenant minimum liquidity level of USD 20 million was set until the end of the third quarter of
2016. The new temporary covenant are applicable to both the USD 1.3 billion facility and the USD 288
million new build financing facility.
Financial restructuring plan
A dialogue has been commenced with the Company’s key stakeholders, including the senior lenders,
and the Company is currently working with stakeholders and advisors to evaluate alternatives to
improve the financial situation of the Company. Amendments to the bank and bond agreements will
be required in order to secure a robust financial foundation and to safeguard and further strengthen
Prosafe’s market leading position in the industry. The Company intends to communicate its financial
plan during the second quarter of 2016.
85
NOTE 17: GOING CONCERN
The Board of Directors confirms that the accounts have been prepared under the assumption that
the Company is a going concern and that this assumption is realistic at the date of the accounts. This
assumption is based on the budgets for the year and the Group’s long-term forecasts for the following
years. As a result of the suspension of the two contracts in Mexico and the increased liquidity risk,
a material uncertainty around the going concern assumption has arisen. The Board of Directors has
evaluated the financial forecasts including the assumptions for utilisation of the vessels and the
charter day rates. These assumptions are based on prudent estimates compared to historical actuals.
In the evaluation of the financial forecasts, factors such as the order backlog and cost saving initiatives
have been considered. As referred to in the financial presentation of the Q4 2015 result, the Group has
already achieved annual cost savings amounting to USD 15 million. There is a target to double these
annual savings. Cost savings to date and going forward include many cost categories, e.g. offshore,
travel and salaries. Activity level is forecasted to rebound from 2018 as industry cost reductions are
taking full effect.
Moreover, the Board of Directors has evaluated the Company’s ability to reach a solution in the
ongoing dialogue with the Company’s key stakeholders, and concluded that it is likely to achieve
a favourable outcome of this process. This conclusion is an important factor in the going concern
assumption. The Board of Directors intends to announce a plan to secure financing of the Company
shortly. As of today, such a plan is likely to involve a combination of one or more different alternatives
including but not limited to, renegotiated restrictive covenants and debt restructuring. For additional
comments on liquidity risk, please refer to note 19 to the consolidated accounts.
86
87
INDEPENDENT
AUDITORS' REPORT
88
To the members of
Prosafe SE
REPORT ON THE CONSOLIDATED AND THE
SEPARATE FINANCIAL STATEMENTS OF
PROSAFE SE
We have audited the accompanying consolidated
financial statements of Prosafe SE (“the Company”)
and its subsidiaries (together with the Company,
the “Group”) and the separate financial statements
of the Company, on pages 26 to 86, which comprise
the consolidated statement of financial position of
the Group and the statement of financial position
of the Company as at 31 December 2015, and the
consolidated income statement, and statements
of other comprehensive income, changes in equity
and cash flows of the Group, and the income
statement, and statements of comprehensive
income, changes in equity and cash flows of the
Company for the year then ended, and a summary of
significant accounting policies and other explanatory
information.
Board of Directors’ Responsibility for the
Financial Statements
The Board of Directors is responsible for the
preparation of consolidated and separate financial
statements of the Group and the Company that give
a true and fair view in accordance with International
Financial Reporting Standards as adopted by the
European Union (EU) and the requirements of the
Cyprus Companies Law, Cap. 113, as amended from
time to time (the “Companies Law, Cap. 113”), and
for such internal control as the Board of Directors
determines is necessary to enable the preparation of
consolidated and separate financial statements that
are free from material misstatements, whether due
to fraud or error.
Independent Auditors’ Responsibility
Our responsibility is to express an opinion on these
consolidated and separate financial statements
of the Group and the Company based on our
audit. We conducted our audit in accordance
with International Standards on Auditing. Those
Standards require that we comply with ethical
requirements and plan and perform the audit to
obtain reasonable assurance about whether the
consolidated and separate financial statements are
free from material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the financial statements. The procedures selected
depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of
the consolidated and separate financial statements,
whether due to fraud or error. In making those risk
assessments, the auditors consider the internal
control relevant to the entity's preparation of
consolidated and separate financial statements
that give a true and fair view in order to design
audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity's
internal control. An audit also includes evaluating
the appropriateness of accounting policies used and
the reasonableness of accounting estimates made
by the Board of Directors, as well as evaluating the
overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the consolidated financial statements
of the Group and the separate financial statements
of the Company give a true and fair view of the
financial position of the Group and the Company,
respectively, as at 31 December 2015, and of their
financial performance and their cash flows for the
year then ended in accordance with International
Financial Reporting Standards as adopted by the
European Union and the requirements of the
Companies Law, Cap. 113, as amended form time to
time.
Emphasis of Matter
Without qualifying our opinion, we draw attention
to the Group’s and the Company’s statement of
financial position on pages 28 and 72 which indicate
that the Group’s and the Company’s current liabili-
ties as at 31 December 2015 exceeded current assets
by USD157,1m and USD258,6m, respectively. This
condition, along with other matters as set forth in
notes 24 and 25 to the Group’s financial statements
and notes 16 and 17 to the Company’s financial
statements, indicate the existence of a material
uncertainty which may cast significant doubt as to
the Group’s and the Company’s ability to continue as
a going concern.
89
OTHER MATTER
Auditors’ Responsibility
This report, including the opinion, has been prepared
for and only for the Company’s members as a body
in accordance with Section 34 of Law 42(I)/2009
and for no other purpose. We do not, in giving this
opinion, accept or assume responsibility for any
other purpose or to any other person to whose
knowledge this report may come to.
Comparative Figures
The financial statements of the Company for the
year ended 31 December 2014 were audited by
another auditor who expressed an unmodified
opinion on those financial statements on 17 March
2015.
Sylvia A. Loizides
Certified Public Accountant
and Registered Auditor
for and behalf of KPMG Limited
Certified Public Accountants and Registered
Auditors
KPMG Center,
No.11, 16th June 1943 Street,
3022 Limassol,
Cyprus.
Limassol, 27 April 2016
The financial statements have been prepared
on a going concern basis which assumes that
the financial restructuring referred to in the
aforesaid notes will be concluded favourably. As
explained in the notes, such financial restructuring
will likely involve a combination of one or more
different alternatives including, but not limited
to, renegotiated restrictive covenants and debt
restructuring. The financial statements do not
include the adjustments that would result if the
Group and the Company were unable to continue as
a going concern.
REPORT ON OTHER LEGAL
REQUIREMENTS
Pursuant to the additional requirements of the
Auditors and Statutory Audits of Annual and
Consolidated Accounts Law of 2009, L.42(I)/2009, as
amended from time to time (“Law 42(I)/2009”), we
report the following:
• We have obtained all the information and
explanations we considered necessary for
the purposes of our audit.
•
In our opinion, proper books of account
have been kept by the Company, so far
as it appears from our examination of
these books.
• The consolidated and the separate financial
statements are in agreement with the
books of account.
•
•
In our opinion and to the best of the
information available to us and according to
the explanations given to us, the
consolidated and separate financial
statements give the information required
by the Companies Law, Cap. 113, as
amended form time to time, in the manner
so required.
In our opinion, the information given in the
report of the Board of Directors on pages 8
to 23 is consistent with the consolidated
and the separate financial statements.
Pursuant to the requirements of the Directive DI190-
2007-04 of the Cyprus Securities and Exchange
Commission, we report that a corporate governance
statement has been made for the information
relating to paragraphs (a), (b), (c), (f) and (g) of article
5 of the said Directive, and it forms a special part of
the Report of the Board of Directors.
90
91
FLEET OVERVIEW
Prosafe is the leading player within the global market for semi-
submersible accommodation vessels for the oil and gas industry.
92
SAFE NOTOS
2016
Built
GustoMSC’s Ocean 500
Design
500
No of beds
Gangway
38.0m +/- 7.5m
Power generation 28 800 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system 10 x 612 t chain
DP3
6 x 3 700 kW azimuth
SAFE EURUS
Ready for operations in 2016
Built
GustoMSC’s Ocean 500
Design
500
No of beds
Gangway
38.0m +/-7.5m
Power generation 28 800 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system 10 x 612 t chain
DP3
6 x 3 700 kW azimuth
SAFE ZEPHYRUS
2016
Built
GVA 3000 E
Design
450
No of beds
Gangway
38.0m +/- 7.5m
Power generation 30 000 kW (6 diesel generator sets)
DP3
Station keeping
Thrusters
6 x 4 000 kW azimuth
Mooring system 12-point wire winches
SAFE BOREAS
2015
Built
GVA 3000 E
Design
450
No of beds
38.0m +/- 7.5m
Gangway
Power generation 30 000 kW (6 diesel generator sets)
DP3
Station keeping
Thrusters
6 x 4 000 kW azimuth
Mooring system 12-point wire winches
93
1985
2003/2009/2014
GVA 3000 – enhanced
REGALIA
Built
Upgraded
Design
No of beds
Gangway
38.0m +/- 7.5m
Power generation 19 560 kW (6 diesel generator sets)
Station keeping
Thrusters
6 x 2 640 kW azimuth
Mooring system 4-point wire winches
306 (NCS: 282)
NMD3
2003/2005/2014/TSV conversion 2016
1984
SAFE SCANDINAVIA
Built
Upgraded
Design:
No of beds:
Gangway:
Power generation: 9 339 kW (4 diesel generator sets)
Station keeping : Moored
Mooring system:
12-point chain winches
36.5m +/- 6.0m
583 (NCS: 292)
Aker H-3.2E
1982
F+G Pacesetter
2004/2012 (refurbishment)
SAFE CALEDONIA
Built
Upgraded
Design
No of beds
Gangway
36.5m +/- 5.5m
Power generation 15 900 KW (6 diesel generator sets)
Station keeping
Thrusters
4 x 2 400 kW azimuth
Mooring system 10-point wire winches
DP2, Posmoor ATA
454
2008
1983, 2006
SAFE BRISTOLIA
Built, converted
Upgraded
Design
No of beds
Gangway
35m +/- 6.0m
Power generation 6 240 kW (4 diesel generator sets)
Station keeping
Mooring system 8-point wire winches
Earl & Wright Sedco 600
588 (UKCS: 316)
Moored
94
SAFE CONCORDIA
2005
Built
Keppel Deepwater Technology Group
Design
461
No of beds
Gangway
29.5m +/- 5.0m
Power generation 17 950 kW (5 diesel generator sets)
DP2
Station keeping
Thrusters
4 x 2 500 kW azimuth
Mooring system 4-point wire winches
SAFE ASTORIA
1983, 2005
Built, converted
2012
Upgraded
Earl & Wright Sedco 600
Design
349
No of beds
Gangway
36.5m +/- 6.0m.
Power generation 6 350 kW (4 diesel generator sets)
Station keeping Moored
Mooring system 8-point wire winches
SAFE BRITANNIA
1980
Built
1987/2003
Upgraded
F+G Pacesetter - enhanced
Design
812
No of beds
36.5m +/- 6.0m
Gangway
Power generation: 13 895 kW (7 diesel generator sets)
Station keeping
Thrusters
Mooring system 9-point wire winches
DP2
4 x 2 400 kW azimuth, 2 x 1 500 kW fixed
SAFE REFENCY
1982
Built
2003/2008
Upgraded
F+G Pacesetter
Design
780
No of beds
Gangway
36.5m +/- 6.0m
Power generation 12 960 kW (6 diesel generator sets)
DP2
Station keeping
Thrusters
4 x 2 400 kW azimuth
Mooring system 8-point wire winches
95
SAFE LANCIA
1984
Built
2003
Upgraded
GVA 2000
Design
605
No of beds
27.5m +/- 5.5m
Gangway
Power generation 14 500 kW (6 diesel generator sets)
DP2 / Posmoor
Station keeping
Thrusters
4 x 2 400 kW azimuth
Mooring system 7-point wire winches
JASMINIA
1982
Built
2002
Upgraded
GVA 2000
Design
535
No of beds
Gangway
Rigid, simple span 34.0m +/-3.0m
Power generation 7 070 kW (3 diesel generator sets)
Station keeping Moored
Thrusters
2 x 2 400 kW azimuth
Mooring system 8-point wire winches
SAFE HIBERNIA
1977
Built
1991/1994/2006
Upgraded
Aker H-3 (modified)
Design
632
No of beds
36.0m +/- 6m
Gangway
Power generation 6 320 (4 diesel generator sets)
Station keeping Moored
Thrusters
Mooring system 12-point wire winches
2 x 3 300 HP Propulsion (Aft)
96
Accommodating
the Offshore
Industry
Stadiou 126
CY-6020 Larnaca, Cyprus
Phone: +357 2462 2450
Fax: +357 2462 2480
mail@prosafe.com
www.prosafe.com
Design: Olavstoppen. Photo: Tom Haga
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