4. quarterly report 1 - 2013 - farstad shipping asa
safety
conscious
value
productive
reliable
inclusive visible and
Transparent
CORPORATE VISION
Better by Far®
We intend to develop the company
further by abiding our values so
that we can maintain a leading,
competitive position in those
markets in which we are present.
BUSINESS CONCEPT
We shall be a leading provider of
specialized offshore tonnage to the
international oil and gas industry.
FOCUS AREAS
We focus on large, advanced
vessels in the anchor handling,
supply and subsea segments.
We focus on health, safety,
environment and quality. This
provides the foundation for all our
activities and is vital with regard to
competitiveness.
We focus on stimulating and
further developing the competen-
ce, knowledge and awareness of
our employees.
LONG-TERM PERSPECTIVE
We are an industrial operator with
a long-term perspective on our
activities. Our services shall
contribute to a sustainable
development for our customers
and their businesses, as well as
form a basis for a long-term
value creation which benefits
shareholders, employees and
society in general. We have a
long-term chartering strategy.
this is
farstad shipping
Farstad Shipping is a leading supply shipping company within
our defined segment of large and more advanced offshore
supply vessels. We are a value-driven company with focus on
safety, quality and efficiency in our services. The company’s
fleet consists of 58 vessels: 26 PSV, 29 AHTS and 3 SUBSEA
vessels. In addition we have seven newbuilds (3 PSV, 3 AHTS
and 1 SUBSEA) for delivery between May 2013 and March
2015. The company’s operations are managed from Ålesund,
Aberdeen, Melbourne, Perth, Singapore, Macaé and Rio de
Janeiro with a total of approx. 2,080 employees. At the moment,
15 vessels are stationed in Brazil, 15 in North-West Europe,
26 in the Indian Pacific region and two vessels in East Africa.
4
5. Ålesund
Aberdeen
Macaé
Rio de Janeiro
Singapore
Perth
Melbourne
26% 45% 3%26%
20% 36% 41% 3%
54% 2%14%30%
quarterly report 1 - 2013 - farstad shipping asa
PSV
Platform Supply Vessel
26 vessels + 3 newbuilds
AHTS
Anchorhandling Tug Supply
vessel
29 vessels + 3 newbuilds
Subsea
Subsea Construction Vessel
3 vessels + 1 newbuild
26 vessels 2 vessels15 vessels 15 vessels
415 employees 754 employees 855 employees 56 employees
271 NOK million 132 NOK million 494 NOK million 14 NOK million
braZil north-west europe indian pacific other regions
the farstad fleet
the Market
5
7. quarterly report 1 - 2013 - farstad shipping asa
Farstad Shipping achieved an operating income of NOK 914.8 million for the
1st
quarter. The operating profit (EBIT) was NOK 173.3 million. The profit after taxes
was NOK 82.1 million.
RESULTSFORTHE1ST
QUARTER2013
Farstad Shipping achieved an operating income of NOK
914.8 million for the 1st
quarter (NOK 905.5 million for the
same period in 2012). The operating costs for the period
were NOK 590.1 million (NOK 595.8 million). Both opera-
ting income and operating costs have been positively influ-
enced by fewer dockings than normal this quarter. A weak
spot market in the North Sea has influenced the operating
income negatively as has four vessels that have been com-
pletely or partly without work during this quarter. Three of
these vessels have been idle awaiting start-up of new con-
tracts.
The operating profit (EBIT) was NOK 173.3 million
(NOK 163.9million)afterdepreciationofNOK151.3million
(NOK 145.7 million). Net finance was negative NOK 83.8
million (negative NOK 47.7 million). Currency gain of
NOK 30.2 million is booked during the 1st
quarter (gain
NOK 11.1 million). Further an unrealized currency loss of
NOK 11.3 million (gain NOK 27.9 million) is booked due to
the adjustment of the company’s long-term liabilities in for-
eign currency. The profit after taxes was NOK 82.1 million
(NOK 113.7 million). The Group’s cash flow*) for the period
was NOK 252.1 million compared to NOK 234.0 million for
thesameperiodin2012.
FINANCINGAND CAPITALSTRUCTURE
In the balance sheet at 31.03.13, interest-bearing mort-
gage debt totals NOK 8,763.4 million (NOK 6,681.0 million
at 31.03.12). Of the company’s interest-bearing debts,
77.6% is in NOK, 9.9% in USD, 7.8% in GBP and 4.7% in
AUD. Interest-bearing current assets at 31.03.13 were
NOK1,531.5million(NOK1,325.7million).
The Group’s booked equity at 31.03.13 was NOK 6,849.0
million(NOK6,891.5million)correspondingtoNOK175.61
(NOK176.71)pershare.Equityratiowas41.4%(47.6%).
ACCOUNTINGPRINCIPLES
The quarterly report has been prepared in accordance with
today’s International Financial Reporting Standards (IFRS)
and interpretations, and the IAS 34 standard for quarterly
reporting. Except for the implementation of changes in the
Pension Standard (IAS 19), all accounting principles used
are in accordance with principles used in the last annual
report. The financial statements for the first quarter of
2013areunaudited.
CHANGESTOTHEFLEET
Far Spica (STX PSV 08 CD) was delivered from Vard Lang-
sten 31 January and started immediately after delivery on a
contract with Statoil. The vessel is financed by Danish Ship
FinanceAS. FarSitella (STX PSV08 CD)was delivered from
Vard Vung Tau, Vietnam 5 February. After the arrival in
Australia, the vessel started on a long term contract with
Shell Australia. The vessel is financed by Nordea Bank. Far
Senator (AHTS 731 CD) was delivered from Vard Langsten
21March.ThevesselwassoldtoOceanYieldASandleased
backona12yearbareboatcharter.Theagreementincludes
optionsforustobuybackthevesselatgivenconditions,and
willbetreatedasafinancialleaseintheaccounts.Thevessel
istradingtheNorthSeaspotmarket.
AHTSLadyCynthia(1987,HartFenton)wassold2January.
After the sale, only two of the company’s vessels are built
duringthe1980’s.
In February, an agreement was reached with Vard AS to
build a Subsea/IMR vessel. The newbuild is part of the
company’s expansion into the subsea market, and repre-
sents an investment of approx. NOK 825 million. The vessel
is a STX OSVOSCV07 design (Offshore Subsea Construc-
tion Vessel) and is constructed for subsea/IMR operations
(Inspection, Maintenance and Repair).The vessel has a total
lengthof143meters,beamof25metersandadeckareaof
more than 1,800 m2
, and is equipped with two offshore cra-
nes, of which the larger one has a lifting capacity of 250
tons. Furthermore the vessel is arranged for three ROV’s
(Remote Operating Vehicles) and has accommodation for
130 persons. Delivery of the vessel will take place in the
firstquarter2015.
NEW CONTRACTS
Farstad Shipping has achieved a number of new charter
*) Cash flow is defined as pre-tax profit + depreciation and deferred maintenance +/- change on revaluation of long-term liabilities
in foreign currency.
7
8. quarterly report 1 - 2013 - farstad shipping asa
The company’s 20 largest shareholders
per. 13.05.13
Number %
Tyrholm & Farstad AS 15 796 199 40.50
Brown Brothers Harriman Fidelity 3 200 000 8.21
Folketrygdfondet 2 988 260 7.66
Pareto Aksje Norge 2 010 627 5.16
Jan H. Farstad 1 050 000 2.69
Sverre A. Farstad 1 000 000 2.56
Odin Norge 925 063 2.37
Pareto Aktiv 847 445 2.17
Odin Norden 623 569 1.60
Odin Offshore 620 553 1.59
Mondrian Int. Equity Fund 519 455 1.33
Pareto Verdi 464 545 1.19
MP Pensjon 420 000 1.08
Highclere International Investors 394 251 1.01
Forsvarets Personellservice 228 000 0.58
Citibank DFA-INTL SML CAP 207 709 0.53
The Bank of New York 163 632 0.42
JPMorgan Chase Bank 161 563 0.41
Pareto Sicav 151 135 0.39
Nortura Konsernpensjon 150 000 0.38
Total 20 largest shareholders 31 922 006 81.85
Other shareholders 7 077 994 18.15
Total number of shares 39 000 000 100.00
commitments during this quarter - the most significant of
these arepresentedbelow:
PSVFar Star left the North Sea in January after being awar-
dedatwomonthscontractwithTechnipinBrazil.
PSV Far Spica and PSV Far Scotsman were awarded con-
tracts of approx. 9 months duration each to support the
Statoil drilling campaign on the coast of East Africa. Start-
up of the contractswas inApril, and Statoil has the option to
extendthecontractsforafurtherninemonths.
PerencoPetroleoeGasdoBrasilawardedAHTSFarSagaris
a 12 month contract with a 6 month option to support the
Ocean Star drilling campaign in Brazil. The vessel was idle
during the quarter until start-up of this contract medio Fe-
bruary.
Fugro Rue in Norway awarded IMR vessel Far Saga a six
monthcontract.Thevesselwasidleinthequarteruntilstart-
up of the contract in the end of February.The contract inclu-
des ROV support operations and other subsea related acti-
vitiesintheNorthSea.
Petrobras declared their option to extend the contract for
AHTSFarSeawith292days.
PSV Far Solitaire was awarded a new four month contract
with fourmonthly options forStatoil.The contract is a direct
continuationofpreviouscontract.
Statoil declared their one year options to extend the con-
tracts for PSV Far Seeker and PSV Far Searcher until April
andMarch2014respectively.
Peterson SBS Den Helder B.V. awarded PSV Far Splendour
a one year contract with two yearly options. Start-up of the
contractwasinthebeginningofMay.
CONTRACTCOVERAGE
The contract coverage of the Farstad Fleet is approximately
72% for the remaining part of 2013, and approximately
45% for 2014. These figures include the charterer’s op-
tionstoextendcertaincontracts.
SHAREHOLDERMATTERS
The company’s shares have during the quarter been traded
quarterly report 1-2013
8
9. quarterly report 1 - 2013 - farstad shipping asa
between NOK 128.50 and NOK 145.00, and were
NOK 128.50 at the end of the quarter. The share price at
31.03.13valuesthecompanytoapprox.NOK5.0billion.
THEMARKET
The market for the first quarter turned out as expected.
Most of our markets have been characterized by too much
idletonnage.TheNorthSeamarketwasweakinthetwofirst
months of the year, but improved as spring progressed.
There have been brief periods with balance in the market.
EventhoughthesummermarketintheNorthSeathisyearis
expected to be better than lastyear, a more stable market is
dependentuponanetdepartureoftonnagetootherregions.
Brazil has shown a positive development during the quarter
as Petrobras once more has started awarding contracts,
which gives reasons for optimism. The Indian Pacific region
is still characterized by overcapacity of tonnage and pres-
sure on rate levels. This situation is not expected to improve
in2013.
With an oil price at today’s level, the offshore activity is ex-
pected to increase in the years ahead.This applies to opera-
tions related to drilling activity as well as operations related
to installation and production and not least the increasing
activity related to inspection, maintenance and repair of
subsea installations. Profitability for the participants in this
market will be dependent upon the development on the
supply side. An increasing number of new participants with
easyaccesstocapitalthattheyarewillingtoriskisaconcern
in terms of continued high contracting. Especially, for the
subsea market the development and completion of planned
projects will be dependent on sufficient access to enginee-
ring and other critical shore based resources, which will
eventually lead to revised time schedules and a flattening of
theactivitylevel.
ANNUAL GENERAL MEETING MAY15TH
2013
The Annual General Meeting will be held at the company’s
premisesonWednesday15May. TheBoardofDirectorswill
propose a dividend of NOK 3.00 per share for 2012
(NOK 5.00persharefor2011).Theshareswillbetradedex.
dividend on Thursday 16 May. Payment of dividend will take
placeon29May.
Aalesund,May14th
2013
TheBoardofDirectors
9
10. quarterly report 1 - 2013 - farstad shipping asa
FARSTAD SHIPPING ASA (NOK 1000) Group
PROFIT AND LOSS ACCOUNT
STATEMENT OF COMPREHENSIVE INCOME
1.1-31.03 1.1-31.03 1.1-31.12 1.1-31.12
2013 2012 2012 2011
Freight income and other income 911 318 916 349 3 714 024 3 584 889
Profit (loss) on sale of fixed assets 3 450 (10 847) (10 252) 16 909
Total operating income 914 768 905 502 3 703 772 3 601 798
Operating expenses vessels (523 331) (523 943) (2 108 838) (1 948 798)
Administration (66 779) (71 891) (288 736) (234 565)
Total operating expenses (590 110) (595 834) (2 397 574) (2 183 363)
Operating profit before depreciation (EBITDA) 324 658 309 668 1 306 198 1 418 435
Ordinary depreciation (151 347) (145 735) (575 928) (544 808)
Operating result before other
revenues and expences 173 311 163 933 730 270 873 627
Gain from gradual acquisition - - - 70 431
Operating result (EBIT) 173 311 163 933 730 270 944 058
Financial income 11 730 11 940 48 305 64 632
Financial expenses (114 453) (98 700) (435 844) (410 900)
Agio/(disagio), realised 30 181 11 140 15 827 25 436
Agio/(disagio), unrealised (11 286) 27 945 (33 861) (92 915)
Net financial expenses (83 828) (47 675) (405 573) (413 747)
Pre-tax profit 89 483 116 258 324 697 530 311
Taxes (7 341) (2 535) (12 866) 38 137
Result 82 142 113 723 311 831 568 448
Profit/diluted profit per share (NOK) 2,11 2,92 8,00 14,58
Cash flow per share (NOK) 6,46 6,00 23,96 28,14
Average number of outstanding shares 39 000 000 39 000 000 39 000 000 39 000 000
1.1-31.03 1.1-31.03 1.1-31.12 1.1-31.12
2013 2012 2012 2011
Result 82 142 113 723 311 831 568 448
Other comprehensive income:
Change in currency and interest hedging contracts (46 671) 52 324 23 303 (53 866)
Change in deferred tax - (3 126) (9 439) 2 014
Translation effects
foreign operations 37 663 (10 111) (101 442) (66 670)
Change in actuarial gains and losses pensions - (81 542) (73 639) -
Total other comprehensive income (9 008) (42 455) (161 217) (118 522)
Comprehensive income for the period 73 134 71 268 150 614 449 926
10
13. quarterly report 1 - 2013 - farstad shipping asa
FARSTAD SHIPPING ASA (NOK 1000) GROUP
CHANGE IN EQUITY
STATEMENT OF CASH FLOW
1.1-31.03 1.1-31.03 1.1-31.12 1.1-31.12
2013 2012 2012 2011
Cash flow from operating activity 293 343 302 536 1 171 243 1 362 490
Sale of fixed assets 18 762 9 279 24 913 41 951
Investment in fixed assets and contracts newbuilds (1 087 010) (271 265) (1 627 350) (688 613)
Net payment purchase of subsidiary - - - (296 763)
Other investments 10 782 60 211 81 623 83 161
Cash flow from investment activity (1 057 466) (201 775) (1 520 814) (860 264)
New long-term debt 1 066 499 397 400 2 235 440 4 760
Repayment of debt (251 851) (527 787) (1 125 540) (741 827)
Dividend paid - - (195 000) (156 000)
Interest costs (110 625) (95 944) (412 196) (396 647)
Cash flow from finance activity 704 023 (226 331) 502 704 (1 289 714)
Net changes in cash and
cash equivalents in the period (60 100) (125 570) 153 133 (787 488)
Net currency exchange differences subsidiaries (2 987) (871) (242) (6 620)
Cash and cash equivalents
at the beginning of the period *) 1 495 147 1 342 256 1 342 256 2 136 364
Cash and cash equivalents
at the end of the period *) 1 432 060 1 215 815 1 495 147 1 342 256
*) Ex. shares, equity certificates and bonds
1.1-31.03 1.1-31.03 1.1-31.12 1.1-31.12
2013 2012 2012 2011
Equity at the beginning of the period 6 775 849 6 820 235 6 820 235 6 582 368
Comprehensive income 73 134 71 268 150 614 449 926
Change in foreign currency translation due
to gradual aquisition of subsidiary - - - (56 059)
Dividend payment - - (195 000) (156 000)
Equity at the end of the period 6 848 983 6 891 503 6 775 849 6 820 235
13
14. 2013 2014 2015 2016 2017
quarterly report 1 - 2013 - farstad shipping asa
CONTRACT OVERVIEW AT 13.05.13
Year
builtDesign BHP
Employment i
)
at 13.05.13Vessel name Owner
Owner:
SUP = Farstad Supply AS
IOS = P/R International Offshore Services ANS
FSL = Farstad Shipping Ltd.
FSS = Farstad Shipping Pte. Ltd.
CON = Farstad Construction AS
FSB = Farstad Shipping S.A. (Brazil)
AHTS FLeet employment
FAR SIRIUS tbn UT 731 CD 2014 - SUP
FAR SIGMA tbn UT 731 CD 2014 - SUP
FAR STATESMAN tbn UT 731 CD 2013 - SUP
FAR SENATOR UT 731 CD 2013 - SUP Spot
FAR SARACEN UT 731 CD 2010 24400 SUP March 14 + opt.
FAR SHOGUN UT 731 CD 2010 24400 SUP March 14 + opt.
FAR SAGARIS UT 731 CD 2009 23700 SUP March 14 + opt.
FAR SCORPION UT 731 CD 2009 23700 SUP Spot
FAR SCIMITAR UT 712 L 2008 16000 SUP May 13
FAR SABRE UT 712 L 2008 16000 SUP Spot
FAR SAPPHIRE UT 732 CD 2007 27500 SUP Spot
FAR SOUND UT 712 L 2007 16000 SUP July 13 + opt.
BOS TURQUESA UT 722 L 2007 19000 FSB Feb. 15 + opt.
FAR STRAIT UT 712 L 2006 16000 FSS Nov. 13
FAR STREAM UT 712 L 2006 16000 SUP Nov. 13
FAR SWORD UT 712 L 2006 16000 SUP July 13 + opt.
BOS TURMALINA UT 722 L 2006 15500 FSB July 14 + opt.
BOS TOPÀZIO UT 728 L 2005 13240 FSB Dec. 13 + opt.
LADY ASTRID UT 712-2 2003 13500 IOS May 13
LADY CAROLINE UT 712-2 2003 13500 IOS Spot
FAR SALTIRE UT 728 L 2002 16300 FSL Spot
LADY GURO UT 719-2 2001 5450 FSS Oct. 16 + opt.
FAR SCOUT UT 722 L 2001 18700 SUP Feb. 16 + opt.
FAR SANTANA UT 730 2000 19200 SUP July 14 + opt.
FAR SOVEREIGN UT 741 1999 27400 SUP Feb. 15 + opt.
FAR SENIOR UT 722 L 1998 18900 SUP Feb. 16 + opt.
LADY SANDRA KMAR 404 1998 17000 FSS June 13 + opt.
FAR SAILOR UT 722 1997 14800 SUP Oct. 13 + opt.
FAR FOSNA UT 722 1993 14400 SUP June 13 + opt.
FAR GRIP UT 722 1993 14400 SUP May 13
FAR SKY ME 303 II 1991 13400 SUP May 13
FAR SEA ME 303 II 1991 13200 SUP Nov. 13 + opt.
14
15. 2014 2015 2016 2017
2013 2014 2015 2016 2017
2013
quarterly report 1 - 2013 - farstad shipping asa
FAR SYGNA tbn PSV 07 2014 - SUP May 20 + opt.
FAR SUN tbn PSV 07 2014 - SUP Aug. 20 + opt.
FAR STARLING tbn PSV 08 CD 2013 - SUP
FAR SITELLA PSV 08 CD 2013 4000 FSS June 14 + opt.
FAR SPICA PSV 08 CD 2013 4000 SUP Oct. 13 + opt.
FAR SOLITAIRE UT 754 WP 2012 5800 SUP Sept. 13 + opt.
FAR SKIMMER PSV 08 CD 2012 4000 FSS Nov. 14 + opt.
FAR SCOTSMAN PSV 08 CD 2012 4000 FSL Oct. 13 + opt.
FAR SERVER HY 832 CD 2010 4000 FSL May 13 + opt.
FAR SERENADE UT 751 CD 2009 5944 SUP April 14 + opt.
FAR SEARCHER UT 751 E 2008 4992 SUP March 14
FAR SEEKER UT 751 E 2008 4905 SUP April 14
FAR SPIRIT VS470MkII 2007 3624 FSL Nov 14 + opt.
FAR SWAN VS470MkII 2006 3628 FSS April 14 + opt.
FAR SPLENDOUR P 106 2003 3503 SUP April 14 + opt.
FAR SYMPHONY P 105 2003 4929 SUP April 17 + opt.
FAR SWIFT UT 755 L 2003 3084 SUP May 13 + opt.
LADY MELINDA UT 755 2003 2777 FSS Dec. 13 + opt.
LADY GRETE UT 755 L 2002 3271 FSS Nov. 13
LADY GRACE UT 755 2002 2936 IOS May 14 + opt.
FAR STAR UT 745 1999 4403 SUP Aug. 17 + opt.
FAR SUPPLIER VS 483 1999 4593 FSL May 14
FAR STRIDER VS 483 1999 4709 FSL July 17 + opt.
FAR SUPPORTER UT 750 1996 4680 FSL May 16
FAR SERVICE UT 745 1995 4680 FSL June 13 + opt.
FAR SCANDIA UT 705 1991 3100 SUP May 14
FAR SUPERIOR UT 705 L 1990 3796 FSL May 13
FAR GRIMSHADER UT 706 L 1983 3225 SUP Spot
LADY KARI-ANN ME 202 1982 2972 IOS Spot
FAR SLEIPNER tbn OSCV 07 2015 - SUP
FAR SAMSON UT 761 CD 2009 47600 CON April 14 + opt.
FAR SAGA UT 745 L 2001 10900 SUP Aug. 13 + opt.
FAR SCOTIA UT 755 2001 3022 FSL Nov. 16 + opt.
CONTRACT OVERVIEW AT 13.05.13
Year
builtDesign DWT
Employment i
)
at 13.05.13Vessel name Owner
Year
builtDesign BHP
Employment i
)
at 13.05.13Vessel name Owner
i
) Certain freight contracts contain clauses which give the charterer
the right to cancel the contract.
Contract Charterer’s option
Under construction
PSV/SUBSEA FLeet employment
15
