10/30/2015

REPORT FOR THE THIRD QUARTER 2015

Highlights 3Q 2015:

  • Operating   revenues were NOK 3 402 million (NOK 3 411 million)
  • Operating result before depreciation (EBITDA) was NOK 1 305 million (NOK 1 213 million)
  • Operating result (EBIT) was NOK 153 million (NOK 190 million)
  • Net result after tax was NOK 70 million (NOK - 38 million)
  • Earnings per share were NOK 1.0 (NOK 0.8)

Post quarter events
Fred. Olsen Energy ASA - Bollsta Dolphin:
o    Arbitration notice received from Hyundai Heavy Industries Co. Ltd.
o    Termination of Construction Contract and Drilling Contract

Operating revenues have been impacted positively by higher USD, GBP and EUR against NOK compared with the corresponding quarter last year. USD was on average approximately 32% higher in 3 quarter 2015 compared to 3 quarter 2014 while GBP and EUR was 22% and 10% higher, respectively.  

The Group of companies´ operating revenues amounted to NOK 3 402 million (NOK 3 411 million) in the quarter. Offshore Drilling had operating revenues of NOK 1 985 million (NOK 2 094 million), Renewable Energy NOK 199 million (NOK 115 million), Shipping / Offshore wind NOK 254 million (NOK 429 million), Cruise NOK 647 million (NOK 474 million) and Other investments NOK 318 million (NOK 300 million). The latter includes operating revenues in NHST Media Group of NOK 296 million (NOK 286 million).

Operating result before depreciation (EBITDA) in the quarter was NOK 1 305 million (NOK 1 213 million). Compared with the same quarter last year EBITDA increased by approximately NOK 359 million due to the currency effects. The increase of NOK 92 million compared to the corresponding period last year is due to higher EBITDA within Offshore drilling, Renewable energy and Cruise.   Offshore drilling achieved EBITDA of NOK 1 066 million (NOK 940 million) in the quarter, EBITDA within Renewable energy were NOK 106 million (NOK 52 million), while Cruise achieved EBITDA of NOK 186 million (NOK 102 million). The increase in EBITDA within these segments was partly offset by lower EBITDA within Shipping / Offshore wind, which were NOK -17 million (NOK 167 million). EBITDA within Other investments improved by NOK 12 million compared with the same quarter last year.

Depreciation and impairment in the quarter was NOK 1 152 million (NOK 1 023 million), of which impairment of assets within Offshore drilling amounted to NOK 257 million.

Operating result (EBIT) was NOK 153 million (NOK 190 million).

Net financial items were NOK - 49 million (NOK - 170 million). Net interest expenses in the quarter were NOK 190 million (NOK 151 million) and net currency gain was NOK 248 million (gain NOK 95 million). Net unrealized loss related to fair value adjustment of financial instruments was NOK - 76 million (NOK -15 million). Received dividends in the quarter amounted to NOK 1 million (NOK 44 million).

Net result in the quarter was NOK 70 million (NOK - 38 million), of which NOK 33 million are attributable to the shareholders of the parent company (NOK 27 million). The non-controlling interests´ share of net result in the quarter was NOK 37 million (NOK - 65 million).

Revenues year to date were NOK 11 027 million (NOK 8 882 million) while EBITDA year to date were NOK 4 824 million (NOK 2 933 million). Operating result (EBIT) year to date was NOK - 1 439 million
(NOK 693 million). Net financial items were NOK - 234 million (NOK - 415 million) and net result after estimated tax was NOK -1 706 million (NOK 224 million), of which NOK - 689 million (NOK 138 million) are attributable to the shareholders of the parent company.

Subsequent events

On 22 October, Bollsta Dolphin Pte. Ltd.,a subsidiary of Fred. Olsen Energy ASA, received a notice of arbitration from Hyundai Heavy Industries Co. Ltd. (HHI). HHI alleges that it is entitled to an additional payment of about MUSD 167 and additional time to complete and deliver Bollsta Dolphin. The claim is considered to be without merit; principally because the construction contract is a so called turn-key delivery for a pre-agreed price. The contract also contains a specific variation order regime dealing with any adjustments or modifications. The amount of variations are negligible.

The construction of the unit was substantially delayed and Bollsta Dolphin Ptl. Ltd therefore decided to exercise its contractual right to terminate the construction contract with HHI. In connection with this termination, Chevron North Sea Limited and Dolphin Drilling Ltd. in good faith agreed on amicable terms to terminate the drilling contract under which the newbuilding was supposed to operate.