Q3 2007 report

 

EBITDA was USD 46.0 million (USD 19.0 million) in the third quarter. Total revenue amounted to USD 182.6 million (USD 102.9 million). The increase in EBITDA and revenue is primarily attributable to increased activity arising from the acquisition of Advanced Production & Loading Plc (APL), YÙUM K'AK'NÁAB finalizing conversion and commencing operations, termination of the contract of the FPSO BW Peace and share of profit of associates.

 

Operating revenue in the third quarter 2007 included an amount of USD 20.0 million collected under a bank guarantee for the termination of the FPSO BW Peace contract due to the client's non-performance. Operating expenses in the third quarter totalled USD 143.4 million (USD 83.9 million). The increase in operating expenses is mostly attributable to the increased activity from the acquisition of APL. Operating expenses also included a provision of USD 7.0 million related to expenses arising from problems with the gas compression plant on Berge Helene in 2006 and a provision for doubtful debt of USD 1.0 million. In addition, a write-down of the book value of BW LPG FPSO I of USD 3.6 million was recorded in the third quarter, reducing its book value to the agreed sales price of USD 8.6 million.

Share of profit of associates amounting to USD 6.8 million (USD 0.0 million) relates to the Group's investments in Prosafe SE (USD 6.9 million) and Nexus Floating Production Limited (Nexus) (USD -0.1 million). At 30 September 2007, the Group owned 24.33% of the shares in Prosafe and 49.7% of the shares in Nexus.

 

Net financial items for the third quarter amounted to USD -16.6 million (USD 1.9 million). The reduction in net financial result relates to YÙUM K'AK'NÁAB coming into operation, increased financing expenses arising from the acquisitions of shares in Prosafe and APL, and a loss in fair value on an interest swap agreement.

Net profit in the third quarter amounted to USD 16.2 million (USD 11.1 million).

Total assets amounted to USD 2,997.5 million at 30 September 2007 (USD 840.7 million). The increase in total assets is a result of the conversions of YÙUM K'AK'NÁAB and BW Peace, increased activity from the acquisition of APL and Prosafe shares, and the acquisition of the vessels BW Carmen and BW Pioneer.

Total equity amounted to USD 1,530.5 million at 30 September 2007 (USD 383.4 million).

Cash flow from operating activities in the third quarter 2007 was USD 51.3 million (USD -10.5 million). The positive cash flow relates to a reduction in working capital in addition to an amount of USD 20.0 million collected under a bank guarantee for the termination of the FPSO BW Peace contract. Cash flow from investing activities were positive due to the refund of VAT and the up-front payment from the client in the YÙUM K'AK'NÁAB conversion project.

 

EBITDA for the third quarter amounted to USD 35.3 million (USD 19.0 million). The improvement is primarily a result of the finalization of the conversion of YÙUM K'AK'NÁAB (which commenced operation in July 2007). In addition, share of profit of associates amounted to USD 6.9 million in the third quarter 2007 (USD 0.0 million).

Cash flow from operating activities in the third quarter 2007 was USD 52.5 million (USD -10.5 million). The positive cash flow relates to a reduction in working capital in addition to an amount of USD 20.0 million collected under a bank guarantee for the termination of the FPSO BW Peace contract.

 

EBITDA for the third quarter amounted to USD 10.7 million. The EBITDA-margin was 11.2%. The revenues in the third quarter were USD 96.2 million, of which the installation of the LNG Offshore Terminal outside Boston has made a significant contribution.

Cash flow from operating activities in the third quarter was negative by USD 1.2 million. Increase in working capital related to ongoing projects is the reason for this development.

 

 

Board of Directors

 

Bermuda, 15 November 2007

 

 

Please see www.bwoffshore.com for Q3 2007 presentation and more information about BW Offshore.