Third quarter results 2024
HIGHLIGHTS
EBITDA USD 83 millionNet profit USD 13 millionOperating cashflow USD 86 millionEquity ratio 29.6% and USD 707 million in available liquidityQ3 cash dividend USD 0.0625 per share equivalent to USD 11 millionBarossa FPSO 90% completed, additional costs to close variation orders and maintain scheduleFull year 2024 EBITDA expectation increased to USD 315 – 320 million
BW Offshore continues to progress the Barossa project according to schedule. As of end October 2024, the project was 90% completed. BW Opal is undergoing commissioning and preparations for sail-away from the yard in Singapore, where it will be towed to the field in Australia. Closing out variation orders and prioritising the schedule, combined with additional manhours at the yard, is expected to lead to net additional investments of USD 100 – 150 million until project completion.
“As the BW Opal is nearing completion, we remain focused on maintaining schedule and preparing for the FPSO sail-away at the end of first quarter next year,” said Marco Beenen, CEO of BW Offshore. “I am pleased with the consistent high commercial uptime of the operational fleet, which continues to deliver steady cash flow. We see a continued active FPSO market with high tendering activity in which we are selectively progressing project opportunities”.
The Board of Directors has declared a quarterly cash dividend of USD 0.0625 per share. The shares will trade ex-dividend from 19 November 2024. Shareholders recorded in VPS following the close of trading on Oslo Børs on 20 November 2024, will be entitled to the distribution payable on or around 27 November 2024.
BW Offshore expects that the fleet will continue to generate significant cash flows in the time ahead, supported by the USD 5.4 billion firm contract backlog at the end of September 2024.
FINANCIALS
EBITDA for the third quarter of 2024 was USD 83.2 million (USD 77.4 million in Q2). The EBITDA reflects solid operational performance across the FPSO fleet and final contribution related the engineering and design work related to the Sakarya project.
EBIT for the third quarter was USD 37.6 million (USD 31.9 million).
Net financial expenses were USD 16.4 million (USD 4.5 million) of which net interest expense amounted to USD 4.3 million (USD 4.8 million). The increase in net financial expenses is primarily due to a negative mark-to-market adjustment on interest rate hedges, resulting from a decrease in swap rates.
Share of loss from equity accounted investments was USD 5.7 million (profit of USD 4.1 million Q2).
Net profit for the third quarter was USD 13.0 million (USD 29.2 million).
Total equity per 30 September 2024 was USD 1 208.6 million (USD 1 230.5 million). The equity ratio was 29.6% at the end of the quarter (30.4%). As a result of strong cash generation from the fleet and the sale of BW Energy shares in 2024, the Company was net cash positive USD 38.4 million per 30 September 2024 (USD 29.0 million cash positive end of June).
Available liquidity was USD 707.2 million, excluding consolidated cash from BW Ideol and including USD 233.8 million available under the corporate loan facility.
FPSO OPERATIONS
The FPSO fleet continued to deliver stable uptime in the quarter with a weighted average fleet uptime of 98.9% (98.9% in the second quarter).
OFFSHORE FLOATING WIND
BW Offshore is 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 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, engineering capabilities and local fabrication solutions.
OUTLOOK
Growing energy demand continues to drive interest in developing new infrastructure-type FPSO projects with long production profiles, low break-even costs and focus on lower emissions. Increased project complexity, combined with higher construction costs, necessitates financial structures with significant day rate prepayments during the construction period for new lease and operate projects. Alternatively, oil and gas majors may finance and own FPSOs, relying on FPSO specialists for the design, construction and installation scope, combined with operation and maintenance services. BW Offshore is well positioned to offer both solutions.
In recent years, the number of sanctioned FPSO projects have lagged market expectations. Consequently, there is a growing number of projects at various stages of maturity, reflecting a pent-up demand for FPSOs. This is reflected in increased FEED and tendering activity, and an expectation that a number of potential FPSO projects in which BW Offshore is engaging with will reach a final investment decision over the next 12 to 36 months. It is also expected that this dynamic, combined with the high levels of competence required, will result in better risk-reward and improved margins for FPSO companies going forward.
BW Offshore continues to selectively evaluate new projects that meet required return targets, offer contracts with no residual value risk after firm period, and provide a financeable structure with strong national or investment-grade counterparties.
The Company is also actively applying its offshore engineering and operational capabilities to drive future value creation within the energy transition by developing low-carbon and clean energy production solutions. This includes exploring new ventures that target significant market opportunities emerging within gas-to-power, ammonia and carbon capture, as well as combining FPSO and floating offshore wind capabilities to grow in new adjacent areas. BW Offshore maintains a disciplined approach with selective and diligent allocation of capital.
Please see attached the Q3 Presentation. The earnings tables are available at:
https://www.bwoffshore.com/ir/
BW Offshore will host a webcast of the financial results 14:00 (CET) today. The presentation will be given by CEO Marco Beenen and CFO Ståle Andreassen.
Webcast information:
You can follow the presentation via webcast with supporting slides and a Q&A module, available on:
BW Offshore Limited – Q3 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
IR@bwoffshore.com or www.bwoffshore.com
About BW Offshore:
BW Offshore engineers innovative floating production solutions. The Company has a fleet of 3 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 1,200 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.
Attachment
2024 Q3 Presentation