BW Offshore: Fourth quarter and full-year results 2022

Fourth quarter and full-year results 2022

HIGHLIGHTS

• Q4 EBITDA of USD 104.9 million and operating cash flow of USD 174.7 million
• 2022 EBITDA of USD of 345.7 million and operating cash flow of USD 650.3 million
• Equity ratio of 32.9% and USD 371.0 million in available liquidity at end of 2022
• Cash dividend of USD 0.035 per share equivalent to USD 6 million and BW Energy shares as in-kind distribution of USD 5 million for the quarter
• Distributed USD 25.3 million in cash dividends and USD 13.6 million worth of BW Energy Limited shares as dividend in-kind in 2022
• Barossa FPSO project progress at 58% per end of January 2023
• Repurchased USD 60.6 million of Senior Unsecured Convertible Bonds in 2022
• Contract extensions signed for Sendje Berge and Abo FPSO
• Divestment of FPSO BW Joko Tole, BW Cidade de São Vicente, FPSO Umuroa, FPSO Polvo and hand-over of Yùum K’ak’ Náab
  
  

BW Offshore continues to progress the Barossa FPSO project with overall completion at 58% per end of January. The project has achieved 10.2 million manhours without injuries, which reflects BW Offshore and the project partners' commitment to safeguard people and operations. As per end of January, the Hull construction was at 78%, the Turret & Mooring System at 72%, while the Topsides construction stood at 50% completion.

"We focus on executing the Barossa project as per plan, safe and efficient operation of our core assets and concluding the divestment of our non-core units as a basis for continued stable shareholder distributions," said Marco Beenen, CEO of BW Offshore. "While we were disappointed that the Gato de Mato project was paused, it confirmed our ability to replicate infrastructure like FPSO projects with long-term contracts, investment grade counterparties and attractive partnership models. We continue to selectively progress new projects in a strong FPSO market environment.”

The Board of Directors has declared a cash dividend of USD 0.035 per share and USD 5 million of BW Energy Limited shares as in-kind distribution. Shares will trade ex-dividend from 2 March 2023. Shareholders recorded in VPS following the close of trading on Oslo Børs on 3 March 2023 will be entitled to the distribution payable on or about 10 March 2023.

FINANCIALS
EBITDA for the fourth quarter of 2022 was USD 104.9 million (USD 80.4 million in Q3 2022). The increase was mainly driven by reimbursement of expenses incurred related to Gato do Mato under the limited notice to proceed (LNTP) contract with Shell being recorded in Q4 as the project has been paused. Net positive impact from this being recorded in Q4 was USD 13.6 million. The result for Q4 was further supported by good fleet performance in the last quarter of the year.

EBIT for the fourth quarter was positive USD 37.8 million (positive USD 29.6 million in Q3 2022) and included an impairment of USD 15.8 million for earlier capitalised cost related to the Gato do Mato project.

Share of loss of equity-accounted investees was USD 2.0 million compared to a gain of USD 7.2 million the third quarter and includes BW Offshore’s share of net result from the ownership in BW Energy.

Tax expense for the fourth quarter was USD 3.0 million (USD 3.3 million in Q3 2022).

Total equity on 31 December 2022 was USD 1 151.1 million (USD 1 095.6 million in Q3 2022). The equity ratio was 32.9% at the end of the quarter (33.8% in Q3 2022).

Available liquidity on 31 December 2022 was USD 371.0 million, excluding consolidated cash from BW Ideol.

Consolidated net interest-bearing debt was USD 497.4 million (USD 463.2 million in Q3 2022).

FPSO OPERATIONS
During the quarter, the FPSO fleet continued to deliver stable uptime with a weighted average commercial uptime for the fleet of 99.1% (99.2% in Q3 2022).

The contract for Petróleo Nautipa reached the end of its term in October. The FPSO will be sold for recycling after completion of demobilisation and decommissioning.

In November 2022, the Company signed a six-month contract extension for the lease and operation of Sendje Berge, for which divestment negotiations are ongoing.

In January 2023, the contract for Abo FPSO was extended until the end of March 2023. The Company is engaged in divestment negotiations for the unit.

OFFSHORE FLOATING WIND
BW Offshore is actively engaged in the energy transition by developing clean energy production solutions, applying its offshore engineering and operations capabilities to drive future value creation through its 53.2% ownership in BW Ideol.

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

In January, the Floatgen demonstrator reached 25 GWh accumulated production, with an annual availability of over 95%.

OUTLOOK
The Company expects that the core units in the existing fleet will continue to generate significant cash flow in the time ahead supported by the USD 6.0 billion firm contract backlog at year-end 2022 including the Barossa contract.

Nations are expected to increasingly prioritise energy security through diversification of sourcing. The attention to energy independence combined with higher prices, have incentivised oil and gas companies to progress new field development projects in the current inflationary environment.

BW Offshore experiences increased interest for infrastructure type lease and operate FPSO projects, combined with continued access to equity and debt financing for field development initiatives with long-term production, low break-even costs and low carbon emissions. There is also increased activity related to redeployment projects.

The Gato do Mato tender process reconfirmed BW Offshore’s ability to develop a robust execution plan and source the required equity and debt from high-quality investors and lenders. BW Offshore maintains a selective approach to such opportunities, progressing discussions on only a few high-end projects which can be developed in partnership with global infrastructure investors.

The ongoing asset divestment programme for the non-core FPSOs is expected to be completed in 2023 in line with strategy, reducing the operational risks associated with the conventional units and strengthening the balance sheet. The BW Opportunity is retained and marketed as a redeployment candidate.

BW Ideol is BW Offshore’s vehicle for investment in floating offshore wind. The company is progressing multiple projects in collaboration with BW Offshore and other partners.

BW Offshore’s is well positioned for future growth and long-term value creation through the execution of accretive offshore energy projects.

Please see attached the Annual Report and Q4 Presentation. The earnings tables are available at:

www.bwoffshore.com/ir/

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

Conference call information:
To dial in to the conference call where the fourth quarter results and Q&A will be hosted, please pre-register to the event call:

BW Offshore Limited - Q4 Call Registration

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

BW Offshore Limited - Q4 Presentation Webcast

Please note, that if you follow the webcast via the above URL, you will experience a 30 second delay compared to the main conference call. The web page works best in an updated browser - Chrome is recommended.

For further information, please contact:
Ståle Andreassen, CFO, +47 91 71 86 55
Anders S. Platou, Head of Corporate Finance & Strategy, +47 99 50 47 40

About BW Offshore:
BW Offshore engineers innovative floating production solutions. The Company has a fleet of 10 FPSOs with potential and ambition to grow. By leveraging four decades of offshore operations and project execution, the Company creates tailored offshore energy solutions for evolving markets world-wide. BW Offshore has around 2,000 employees and is publicly listed on the Oslo stock exchange.

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

Attachments

• 2022 Q4 Presentation
• 2022 Annual Report
• 2138008LFKH8V2EOA915-2022-12-31-en

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