Offshore accommodation rig provider Prosafe has achieved the highest quarterly fleet utilisation rate since 2019, nearly quadrupling its revenues and shrinking net loss when compared to the third quarter last year.
In its 3Q 2021 report on Thursday, Prosafe said that its fleet utilisation rate in the third quarter of 2021 was 70.9 per cent compared to 16.4 per cent in the same period last year. Six out of seven Prosafe units were on contract in the quarter with Safe Scandinavia being idle and laid up in Norway. According to Prosafe, this was its highest fleet utilization rate since 2Q 2019.
In the third quarter of the year, Prosafe booked revenues of $46 million, nearly quadruple when compared to the third quarter of 2020 and revenues of $12 million. The revenues were driven by higher fleet utilisation. The company shrunk its net loss from $24 million in 3Q 2020 to $9 million in the third quarter of this year.
At the end of this year’s quarter, the company’s net interest-bearing debt equalled $1.47 billion, compared to $1.3 billion in 3Q 2020. Prosafe is currently in the process of financial restructuring, which is on track with formal support from all lenders. The overall process is expected to be completed before or around year-end 2021.
Upon completion, this transaction will result in a significant de-leveraging of the balance sheet with approximately 75 per cent of debt reduction, debt service based on cash sweep and a more robust financial situation. Post-implementation, existing banks/creditors will own 99 per cent of the equity and current shareholders will own 1 per cent of the equity.
Energy transition more complicated than believed, Prosafe says
Looking ahead, Prosafe expects energy consumption to continue to increase in the longer term, with oil and gas remaining an important part of the energy mix. In addition, the oil price has recovered from the low levels triggered by the pandemic. With an oil price currently above $80 per barrel, Prosafe expects the oil and gas companies to increase their investments in their oil and gas activities.
In the short term, Prosafe believes the increased capital investment will focus on existing fields. However, the energy transition may take a longer time and be more complicated than most observers believe. Investments in new oil and gas fields will likely see a comeback from 2022/2023, leading to a further increase in the activity for the oil service industry from the middle of this decade.
Prosafe also believes that the activity level is relatively high in the short term. However, beyond 2022, visibility remains low, which is in line with a historic trend in the offshore accommodation industry. As such, the company remains of the opinion that the industry needs further consolidation and vessel recycling and anticipates this to occur in the years ahead.