Prosafe Beats Street as Activity and Prices Rise

Offshore accommodation rig provider Prosafe posted first-quarter operating earnings above expectations on Wednesday and said activity has picked up in the second quarter as oil prices rebounded from their early year lows.

Its first-quarter operating profit rose to $55.4 million from $22.9 million in same quarter a year ago and beat forecasts for $45.0 million. It is however down from $77.4 million in previous quarter.

Prosafe's net profit rose to $27 million from $18.3 million a year earlier, below expectations for $33.2 million in a Reuters poll.

The firm's order backlog, including options, fell to $1.72 billion at the end of the quarter from $1.84 billion at the end of fourth quarter and a record high of $2.5 billion in the first quarter last year.

Prosafe shares rose 1.7 percent at 1041 GMT, outperforming a 0.8 percent rise in the European oil and gas index.

"In the latter part of the period, a positive movement in the oil price has been observed, and if sustained, could be expected to lead to a moderate increase in demand for offshore accommodation services.

"Tendering activity is currently at a higher level than in the first quarter, and there is potential for contract awards during the coming months", Prosafe said.

The firm said its quarterly dividend would be maintained at 0.36 crown per share.

Prosafe also increased its 2015 investment budget to $750-800 million from $700-750 million due to rising costs in the conversion of the Safe Scandinavia rig, the upgrade of Safe Concordia, and the repair of Safe Bristolia.   

Reporting by Ole Petter Skonnord