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BW Offshore reports 1Q20 loss

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Oilfield Technology,

BW Offshore has released its financial results for 1Q20.

The company's EBITDA increased to US$129.9 million from US$118.1 million in 4Q19. The increase was mainly a result of the provision taken on the FPSO Umuroa during 4Q19 for expected loss of revenues.

BW Offshore recorded a non-cash impairment to the book value of the FPSO fleet and other assets of US$233.1 million for 1Q20. The impairment reflects uncertainty on redeployment following the current market turmoil and pressure on oil prices. The following FPSOs were subject to impairment: Berge Helene, BW Athena, BW Cidade de São Vicente, Espoir IvoirienPolvo and Umuroa.

Net financial expense was US$92.2 million. This is mainly driven by significant negative non-cash mark to market (MTM) changes to interest rate hedges due to declining swap rates and negative MTM changes to FX hedges due to US$ strengthening.

Total equity at 31 March 2020 was US$999.2 million (US$1458.5 million in 4Q19). The equity ratio was 35% at the end of the quarter (43.3% in 4Q19).

Available liquidity was US$406.8 million, including US$171.8 million in cash and US$235 million available under the corporate facility.

Net interest-bearing debt was US$1068.2 million (US$996.6 million in 4Q19).

The end of quarter order backlog amounted to US$4.5 billion (US$5.5 billion) of future revenue from firm contracts and options expected to be exercised.

BW Offshore has decided to prepare for a lay up of the FPSO Umuroa on the Tui field as it did not receive final clarifications from authorities to disconnect the vessel before the onset of the southern hemisphere winter season. BW Offshore continues to work with the New Zealand authorities to develop a new plan for demobilisation, including funding. A significant portion of the estimated US$20 million demobilisation cost was incurred before demobilisation was put on hold.

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