FINANCIAL REPORT Q4 2019 - DOF Subsea...DOF SUBSEA GROUP| Financial Report Q4 2019 5 million (NOK 264 million in 2018). The operating profit after depreciation and impairment (EBIT)

FINANCIAL REPORT

Q4 2019

DOF Subsea ASThormøhlens gate 53 C5006 BergenNORWAYwww.dofsubsea.com

IndexFinancial Report 4th quarter 2019 . . . . . . . . . . . . . . . . . . .4

Financial statements 4th quarter 2019 . . . . . . . . . . . . . . .8

Consolidated statement of comprehensive income . . . . . . . . . . . 8

Consolidated statement of financial position . . . . . . . . . . . . . . . . . . 9

Consolidated statement of cash flows. . . . . . . . . . . . . . . . . . . . . . . . 11

Consolidated statement of changes in equity . . . . . . . . . . . . . . . . 12

Notes to the financial statements . . . . . . . . . . . . . . . . . . 14

Note 1 Management reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Note 2 Segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Note 3 Operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Note 4 Financial income and expenses . . . . . . . . . . . . . . . . . . . . . . . 17

Note 5 Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Note 6 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Note 7 Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Note 8 Net interest-bearing debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Note 9 Financial instruments and hedging activities . . . . . . . . 23

Note 10 Transactions with related parties. . . . . . . . . . . . . . . . . . . . 24

Note 11 Investments in associates and joint ventures. . . . . . 24

Note 12 Shareholder information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Note 13 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Note 14 Events after period end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Note 15 Changes in accounting policies 2019 . . . . . . . . . . . . . . 26

Note 16 Performance measurement definitions . . . . . . . . . . . . . 27

Supplemental information . . . . . . . . . . . . . . . . . . . . . . . . . 28

Condensed statement of comprehensive income 5 last quarters 28

Condensed statement of financial position 5 last quarters. 29

Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Financial Report Q4 2019 | DOF SUBSEA GROUP

4

Financial Report 4th quarter 2019

Headlines In the 4th quarter of 2019, the DOF Subsea Group had an operating revenue of NOK 990 million (NOK 945 million in the 4th quarter of 2018) with an operating profit before depreciation and impairment (EBITDA) of NOK 333 million (NOK 264 million). The operating profit (EBIT) was NOK 91 million (negative NOK 26 million) after depreciation and impairment of NOK 242 million (NOK 291 million). The net financial loss was NOK 25 million (loss NOK 414 million), and the profit before tax was NOK 66 million (loss NOK 440 million).

For the year 2019, the Group had an operating revenue of NOK 3 946 million (NOK 3 742 million) with an operating profit before depreciations and impairment (EBITDA) of NOK 1 201 million (NOK 1 085 million). The operating profit (EBIT) was negative NOK 161 million (positive NOK 172 million) after depreciation and impair-ment of NOK 1 362 million (NOK 913 million). The net financial loss for the year was NOK 669 million (loss NOK 794 million) and the loss before tax was NOK 830 million (loss of NOK 662 million).

During the 4th quarter, the Group has recognised an impairment and depreciation of tangible assets of NOK 242 million due to continued challenging market for vessel services and uncertainty regarding the long-term financial solution. In addition, an impairment on the joint venture vessels Skandi Vitoria and Skandi Niteroi of NOK 97 million has been recognised, affecting the share of net profit of associates and joint venture in the Group’s P&L.

The current market conditions have led to challenges with regards to the financing of the Group’s assets. During the 2nd quarter of 2019 the Group faced difficulties of obtaining a long-term refinancing of a vessel. The Group was given extension of matured loans and instalments until end of November and further to end February in order to reach a long-term financial solution. Application for further extension of repayments has been sent to the relevant banks. However, the approval is still in process and no assurance can be given that the approval will be given.

The market conditions within our industry remains chal-lenging with oversupply of subsea vessels, resulting in continued pressure on vessel earnings and challenges with utilisation of both personnel and assets. In the second half of the year the Group has improved the performance in all regions compared to first half of the year, but there is still pressure on rate levels. The average vessel utilisation in the Subsea/IMR Projects segment were 78 % for the quarter

whilst the utilisation of the vessels within Long-term Charter segment were 76 %. For the fleet in total, the utilisation was 77 %. The utilisation figures are based on total available days, including yard stay days for dry docking, repair and upgrade/conversion, transits and idle time.

Operational events in the quarterAs of 31 December 2019, the number of subsea employees was 1 181, and the Group’s fleet comprised of 24 owned vessels, 3 chartered-in vessels and 74 ROVs.

During the 4th quarter, the Asia Pacific region has conducted IMR and construction work for Shell in the Philippines and in Australia, IMR and survey work for Chevron and light construction, mooring and installation work for Yinson in Malaysia and OMV in New Zealand. In the Atlantic region, the Group has executed engineering, light construction, survey, IMR and decommissioning work for Shell, Conoco Phillips, Equinor, and Tullow in the North Sea, in addition to IMR work for ENI in Angola and survey and positioning work for the Norwegian Mapping Authority in the North Sea. In the North America region, the Group has conducted IMR and installation work for Husky Energy, Shell, Chevron, Anardarko, Saipem and Emera, in addition to RSV services for Argas in the Middle East. In the Brazil region, the Group has been engaged in ROV inspection and diving work for Petrobras. In addition, the joint venture with TechnipFMC has provided pipelay services for Petrobras and the JV vessel Skandi Niteroi started its contract with TechnipFMC in Brazil.

In the Long-term Chartering segment, Skandi Acergy has been idle, she is currently operating under a new long-term contract where the Group is taking utilisation risk on the vessel until April 2020. Skandi Vitoria has remained idle for the quarter but during January 2020 she entered a 2-year contract with TechnipFMC, working outside Brazil.

During the quarter, the Group was awarded several short-term contracts in the Subsea/IMR Projects segment, including the renewable industry.

Consolidated statement of comprehensive income and consolidated statement of financial positionThe Group adopted the new accounting standard IFRS 16 Leases 1st of January 2019. The Group has applied the simplified transition approach and comparative amounts for the year prior to first adoption are not restated.

In the 4th quarter of 2019, the Group achieved an operating revenue of NOK 990 million compared to an operating revenue of NOK 945 million in the 4th quarter of 2018. Operating profit before depreciation and impairment (EBITDA) was NOK 333

Key figures (NOK million) 4Q 2019 4Q 2018 YTD 2019 YTD 2018

Operating revenue 990 945 3 946 3 742

EBITDA 333 264 1 201 1 085

EBIT 91 -26 -161 172

Net interest-bearing debt 8 505 8 606 8 505 8 606

EBITDA proportional method 543 342 1 899 1 402

Utilisation 4Q 2019 3Q 2019 2Q 2019 1Q 2019 4Q 2018

Long-term Chartering 78% 72 % 77 % 76 % 73 %

Subsea/IMR Projects 76% 80 % 67 % 63 % 67 %

Fleet 77% 78 % 70 % 67 % 69 %

| Financial Report Q4 2019DOF SUBSEA GROUP

5

million (NOK 264 million in 2018). The operating profit after depreciation and impairment (EBIT) was NOK 91 million (negative NOK 26 million). Depreciation and impairment amounted to NOK 242 million (NOK 291 million), comprising of depreciation of NOK 136 and impairment of tangible assets of NOK 106 million. In addition, an impairment on the joint venture vessels Skandi Vitoria and Skandi Niteroi of NOK 97 million has been recognised, affecting the share of net profit of associates and joint venture.

Net financial loss was NOK 25 million (loss NOK 414 million). The profit before tax was NOK 66 million (loss NOK 440 million), and the loss for the period was NOK 30 million (loss NOK 458 million).

The Group’s total assets were NOK 15 152 million (NOK 16 476 million), whereas non-current assets amounted to NOK 13 091 million (NOK 14 414 million), including NOK 89 million (NOK 557 million) in intangible assets. Current assets were NOK 2 062 million (NOK 2 062 million), of which NOK 934 million (NOK 1 142 million) was cash and cash equivalents.

The total equity was NOK 4 697 million (NOK 5 735 million), including non-controlling interests of NOK 181 million (NOK 194 million). Non-current liabilities were NOK 6 365 million (NOK 7 793 million). Current liabilities were NOK 4 091 million (NOK 2 949 million), of which NOK 3 416 million (NOK 2 177 million) was current portion of debt. The Group’s total equity and liabilities were NOK 15 152 million (NOK 16 476 million). The net interest-bearing debt (NIBD) was NOK 8 951 million (NOK 8 606 million). At the end of the 4th quarter, the book equity ratio was 31 %.

Cash and cash equivalents have changed due to operating, investing and financing activities. Net cash flow from operating activities in the 4ht quarter was NOK 192 million (NOK 151 million). Cash flow from investing activities was NOK 96 million (NOK -74 million), of which NOK -25 million (NOK -74 million) was from investment in assets that increase or will increase capacity for the Group. Cash flow from financing activities was NOK -55 million (NOK 332 million), related to proceeds of interest-bearing debt and instalments on long-term interest-bearing

debt. At the end of the 4th quarter, the Group’s cash and cash equivalents were NOK 934 million (NOK 1 142 million).

Debt, financing and liquidity The Group’s interest-bearing debt was NOK 9 665 million (NOK 9 827 million), the current portion of interest-bearing debt at the end of December was NOK 3 416 million (NOK 2 177 million), including balloons, bond, drawn credit facility and ordinary instalments. During the quarter the Group has paid ordinary interest. The payment of instalments has been reduced significantly due to the ongoing negotiations regarding a long-term financing solution for the Group. The joint venture with TechnipFMC, has paid ordinary instalments and interest during the quarter.

During 2019, some banks have signalised reluctancy to finance assets within in the OSV industry. In the 2nd quarter, the Group faced difficulties of obtaining a refinancing of a vessel. The Group has a temporary deferral of loan repayments and instalments until 28th of February and has applied the banks for further deferral of loan repayments, and instalments until 30th of April, in order to reach a long-term financial solution. An agreement with the bondholders in DOFSUB07, DOFSUB08 and DOFSUB09 was reached in December where the pricing and maturity of the outstanding bonds was adjusted. The agreement will be confirmed by a new bond summons and a bondholders meeting covering all three bonds. However, the agreement with bondhoders is dependant on a solution with the banks and a that new equity is injected into the Company.

Financial riskThe Group’s operating income is in NOK, USD, AUD, GBP, CAD and BRL, while the Group’s loans are distributed between NOK, USD and CAD. This exposes the Group to the risk of exchange rate fluctuations. The Group has an active exchange rate policy and uses derivatives to hedge the exchange rate exposure and interest rate exposure.

ShareholdersBy quarter end, the shares in DOF Subsea AS were owned by DOF ASA (100 %). The number of outstanding shares is 167 352 762, with a book equity of NOK 28 per share.

NOK million 4Q 2019 4Q 2018 Change %

Operating revenue 990 945 5%

EBITDA 333 264 26%

EBIT 91 -26 na

NOK million 31 .12 .2019 31 .12 .2018 Change %

Total assets 15 152 16 476 -8%

Tangible assets 10 542 11 100 -5%

Cash and cash equivalents 934 1 142 -18%

Net interest-bearing debt 8 505 8 606 -1%

Total equity 4 697 5 735 -18%


6

In November, a sale purchase agreement between DOF ASA and FRC Lux Holding Limited and Dolphin Invest 2 AS was reached and DOF ASA own 100% of DOF Subsea AS.

EmployeesAt the end of 4th quarter, the number of employees in the Group was 1 181. The number does not include marine employees that are employed in DOF Management and Norskan and hired in through shipman agreements to operate the Group’s vessels.

The FleetAt the end of 4th quarter, the Group’s fleet comprised 24 owned vessels, in addition to 3 chartered-in vessels. In addition, the Group operates 74 ROVs.

The BacklogAs at the end of 4th quarter, the firm contract backlog amounted to NOK 12.8 billion. However, the Group is exposed to the short-term market conditions in the Subsea/IMR Projects segment, and the backlog on some of the key assets in this segment are low. In this segment the management is working to increase the backlog and improve the utilisation of personnel and assets.

Contract Backlog*

2020 2021 2022 2023 2024 ThereafterOptions Revenue 0.3 1.0 1.2 1.2 1.1 13.4Firm Revenue 3.6 2.4 1.9 1.6 1.5 1.7

0.0

5.0

10.0

15.0

20.0

NOK

billi

on

Firm Revenue Options Revenue

*Contract backlog includes DOF Subsea’s share of joint venture vessels but excludes master service agreements (MSAs) within the subsea/IMR Projects segment. Under the MSAs only con-firmed POs are accounted for.

Events after period endAfter period end, the Group has been awarded several contracts in the Subsea/IMR Project segment. In the APAC region, DOF Subsea was awarded several contracts securing vessel and resource utilisation in Q1 2020 and first part of Q2 2020. These contract awards will utilise Skandi Singapore. In the North America region, DOF Subsea secured multiple contracts, of which Skandi Neptune will perform a pre-lay and LBL array installation activities in Guyana, subsea installation work in Trinidad and well-head removal work in Canada. Further, the Harvey Deep Sea will perform a large ocean bottom node survey in the GoM, in addition to several shorter IMR and

light construction projects. In Brazil, the joint venture vessel Skandi Vitoria was taken out of layup and commenced a 2-year contract with TechnipFMC. In the Atlantic region, Geosund was awarded a contract for seismic node installation in Nigeria and Skandi Seven secured an extension of exisitng contract in Angola. In addition, the Geosea has been awarded a 5 year contract with N-Sea and end client the Royal Netherlands Navy.

After period end, the Group has continued its work to secure a long term financial solution. The Group is making progress with its stakeholders, including a constructive dialogue with banks to adapt bank facilities to the current market environment. An agreement with the bondholders in DOFSUB07, DOFSUB08 and DOFSUB09 was reached in December where the pricing and maturity of the outstanding bonds was adjusted. The agreement will be confirmed by a new bond summons and a bondholders meeting covering all three bonds. However, the agreement with bondholders is dependant on a solution with the banks and a that new equity is injected into the Company. The majority shareholder in DOF Subsea, DOF ASA, has announced that they will support an equity injection in DOF Subsea if a satisfactory refinancing for the DOF Group is achieved (including DOF Subsea). Based on the current dialogue with all stakeholders, the best estimate for reaching an agree-ment on the long term solution is by the end of 1st quarter 2020, however no assurance can be given at this stage.

OutlookThe market is expected to remain challenging and the winter season will be challenging, however, with variations between the different regions and within the Long-term chartering segment.

The Group will maintain its strategy to secure the fleet on long-term contracts and is actively working on keeping the firm employment of the fleet as high as possible. The Group will further continue to adapt its cost level and adjust its capacity to the challenging markets.

The majority of the Group’s Long-term Chartering assets are committed on firm contracts and represent the largest portion of the Group’s backlog. A continuing weak market will however increase the risk of lower earnings of the Group’s vessels and combined with the financing-/refinancing risk put more pressure on the Group’s liquidity position if a long term refinancing solution is not achieved.

As a result of the continued challenging market situation, the risk of lower utilisation and earnings represents the main operational risk for the Group. The Board of Directors and the Management are working on a long-term financial solution for the Group. The discussion with the relevant stakeholders has been constructive, but time consuming. However, no assurance can be given that the Group will be successful in this respect. The effect of not being able to obtain a long-term financial solution will affect the classification of debt (described in note 8 ‘Net interest-bearing debt’ to the quarterly accounts) and may also affect the ‘going concern’ assumption. If the Group cannot be treated as ‘going concern’, the valuation of the Group’s


7

assets will be further revised. The Group has a temporary deferral of loan repayments and instalments until 28th of February and has applied the banks for further deferral of loan repayments and instalments until 30th of April, in order to reach a long-term financial solution. Even though there is still uncertainty if a long-term financial solution will be achieved, the Board of Directors and Management believes that a solution is obtainable within end of 1st quarter, but no assurance can be given.

Bergen, 20 February 2019 The Board of Directors of DOF Subsea AS Contact information:Mons S. Aase, CEO +47 916 61 012Marianne Møgster +47 993 06 916

DOF Subsea ASThormølens gate 53 C5006 Bergenwww.dofsubsea.com


8

Amounts in NOK million

Financial statements 4th quarter 2019

Consolidated statement of comprehensive income

Note 4Q 2019 4Q 2018 2019 2018

Operating revenue 1, 2, 3 990 945 3 946 3 742

Operating expenses -698 -785 -2 988 -3 063Share of net profit / loss of associates and joint ventures 1, 11 40 104 240 403Profit from sale of non-current assets - - 4 1

Operating profit before depreciation and impairment (EBITDA) 1, 2 333 264 1 201 1 085

Depreciation and impairment 5 -242 -291 -1 362 -913

Operating profit (EBIT) 91 -26 -161 172

Financial income 4, 15 18 55 76 96Financial expenses 4, 15 -178 -148 -615 -507Realised net gain / loss on derivative instruments and currency position 4 51 -78 -21 -168Unrealised net gain / loss on derivative instruments and currency position 4 84 -244 -109 -214Net financial income / loss -25 -414 -669 -794

Profit / loss before tax 66 -440 -830 -622Income tax expense -96 -18 -301 -46

Profit / loss for the period -30 -458 -1 130 -668

Other comprehensive income net of taxItems that may be subsequently reclassified to profit / lossCurrency translation difference (CTA) 50 20 21 -19Share of other comprehensive income of associates and joint ventures 11 -44 103 70 123Other - - - 1

Other comprehensive income / loss net of tax 7 123 92 104

Total comprehensive income / loss for the period net of tax -23 -335 -1 039 -564

Total comprehensive income / loss attributable to:Non-controlling interests -1 -6 -13 -2Owners of the parents -22 -329 -1 026 -562


9


Consolidated statement of financial position

Assets Note 31 .12 .2019 31 .12 .2018

Tangible assets 5 10 542 11 100Goodwill 85 337Deferred tax asset 4 220Investments 1, 11 1 859 1 553Non-current receivables 9, 15 600 1 204Total non-current assets 13 091 14 414

Trade receivables 618 631Other current receivables 9 509 289Current receivables 1 127 920

Restricted cash 137 223Unrestricted cash and cash equivalents 797 919Cash and cash equivalents 8 934 1 142

Total current assets 2 062 2 062

Total assets 15 152 16 476


10


Equity and liabilities Note 31 .12 .2019 31 .12 .2018

Paid-in equity 12 4 344 4 344Other equity 171 1 197Non-controlling interests 181 194Total equity 4 697 5 735

Bond loans 8 2 122 2 480Debt to credit institutions 8 3 910 5 278Lease liabilities 15 325 -Other non-current liabilities 9 8 34Total non-current liabilities 6 365 7 793

Current portion of debt 8 3 416 2 177Trade payables 384 406Other current liabilities 9 291 366Total current liabilities 4 091 2 949

Total liabilities 10 456 10 742

Total equity and liabilities 15 152 16 476



11


Consolidated statement of cash flows

Note 4Q 2019 4Q 2018 2019 2018

Operating profit (EBIT) 91 -26 -161 172Depreciation and impairment 5 242 291 1 362 913Profit from sale of non-current assets - - -4 -1Share of net profit / loss of associates and joint ventures 1, 11 -40 -104 -240 -403Change in trade receivables 261 174 13 223Change in trade payables -147 -5 -22 14Changes in other working capital 7 -72 -49 25Exchange rate effect on operating activities -112 42 -146 -73Cash flow from operating activities 301 301 755 869

Interest received 22 2 65 6Interest paid -118 -136 -573 -519Tax paid -14 -16 -33 -32Net cash flow from operating activities 192 151 214 324

Sale of tangible assets - - 5 1Purchase of tangible assets 5 -25 -74 -188 -267Net cash flows from other non-current receivables 122 - 599 27Cash flow from investing activities 96 -74 416 -239

Proceeds on non-current debt - 926 - 1 558Instalments on non-current debt -55 -594 -807 -1 524Payments from non-controlling interests - - - -31Cash flow from financing activities -55 332 -807 3

Net change in cash and cash equivalents 233 409 -177 88

Cash and cash equivalents, including restricted cash, at period start 686 748 1 142 1 097

Exchange rate effect on cash and cash equivalents 16 -14 -31 -43

Cash and cash equivalents, including restricted cash, at period end 934 1 142 934 1 142

Restricted cash at period end is NOK 137 million (NOK 223 million) and is included in Cash and cash equivalents. Changes in restricted cash is reflected in the cash flow.


12


Consolidated statement of changes in equity

Share

capital

Share

premium

Other paid-in capital

Paid-in equity

Retained earnings

Currency translation

differences

Other equity

Non- controlling

interests

Total

equity

Equity at 01 .01 .2019 1 674 540 2 130 4 344 1 155 42 1 197 194 5 735

Profit / loss for the period - - - - -1 118 - - 1 118 -13 -1 130Other comprehensive income for the period - - - - 70 21 92 - 92Total comprehensive income for the period - - - - -1 048 21 -1 026 -13 -1 039

Equity at 31 .12 .2019 1 674 540 2 130 4 344 107 63 171 181 4 697

Equity at 01 .01 .2018 1 674 540 2 130 4 344 1 716 62 1 778 226 6 348

Profit / loss for the period - - - - -666 - -666 -3 -668Other comprehensive income for the period - - - - 123 -19 104 1 105

Total comprehensive income for the period - - - - -543 -19 -562 -2 -563

IFRS 9 implementation effect - - - - -25 - -25 - -25Adjustment of merger effect - - - - 5 - 5 - 5Changes in non-controlling interests - - - - - - - -31 -31

Equity at 31 .12 .2018 1 674 540 2 130 4 344 1 155 42 1 197 194 5 735


13


14


Notes to the financial statements

Note 1 Management reporting

Joint ventures are accounted for by using the equity method of accounting. Under the equity method, the investment is initially recognised at cost and adjusted thereafter to recognise the Group’s share of profits or losses and movements in other comprehensive income in the investee.

In management reporting the Group uses the proportionate consolidation method when accounting for joint ventures. Proportionate consolidation is used to better reflect the operating performance for vessels in the joint ventures and are the basis for management reporting to the Board of Directors.

At the end of the 4th quarter of 2019 the joint venture owns six PLSVs.

The bridge between the management reporting and the figures reported in the financial statements are presented below:

4Q 2019Consistent with

management reporting

Reconciliation to equity

method 4Q 2019

2019Consistent with

management reporting

Reconciliation to equity

method 2019

Operating revenue 1 329 -338 990 5 147 -1 201 3 946Operating expenses -763 66 -698 -3 219 231 -2 988Share of net income of associates and joint ventures -22 63 40 -32 272 240Profit from sale of non-current assets - - - 4 - 4Operating profit before depreciation and impairment (EBITDA) 543 -210 333 1 899 -698 1 201

Depreciation and impairment -396 154 -242 -1 780 418 -1 362Operating profit (EBIT) 148 -56 91 119 -280 -161

Financial income 9 9 18 27 49 76Financial expenses -237 59 -178 -833 218 -615Realised net gain / loss on derivative instruments and currency position 51 1 51 -25 4 -21Unrealised net gain / loss on derivative instruments and currency position 90 -7 84 -137 28 -109Net financial income / loss -87 62 -25 -968 300 -669

Profit / loss before tax 61 5 66 -850 20 -830Income tax expense -90 -5 -96 -281 -20 -301

Profit / loss for the period -30 - -30 1 130 - -1 130


15


Note 1 Management reporting (continued from previous page)


31 .12 .2019Consistent with

management reportingReconciliation

to equity method 2019

Intangible assets 276 -187 89Tangible assets 16 783 -6 241 10 542Financial assets 357 2 102 2 459Total non-current assets 17 417 -4 326 13 091Other current assets 1 120 7 1 127Cash and cash equivalents 1 238 -304 934Total current assets 2 358 -296 2 062Total assets 19 775 -4 623 15 152





Total equity 4 697 - 4 697

Non-current liabilities 10 387 -4 022 6 365Current liabilities 4 692 -601 4 091Total liabilities 15 079 -4 623 10 456Total equity and liabilities 19 775 -4 623 15 152

Consolidated statement of cash flows




Net cash flow from operating activities 874 -659 214Cash flow from investing activities -943 1 358 416Cash flow from financing activities -96 -711 -807Net change in cash and cash equivalents -165 -12 -177

Cash and cash equivalent at the beginning of the period 1 430 -288 1 142Exchange rate effect on cash and cash equivalents -28 -3 -31Cash and Cash equivalents at the end of the period 1 238 -303 934

In management reporting for 2019 an impairment on the joint venture vessels Skandi Vitoria and Skandi Niteroi of NOK 219 million has been recognised. A hedging position in Brazilian Real that was closed in 2017 in relation to conversion to functional currency USD, implying a profit and loss effect (unrealised financial cost) of negative NOK 49 million in 2019. The correction does not affect the Company’s cash- or equity position.

This give a total negative effect on the Group`s “Share of net income of associates and joint ventures” with NOK 268 million in 2019. Adjusted for these two effects, “Share of net income of associates and joint ventures” had been increased from NOK 240 million to NOK 508 million for 2019.


16


Operating segments are determined based on the information given to the Group’s operating decision-makers for the purposes of allocating resources and assessing performance. Segments are reported to the chief operating decision-makers on a regular basis.

The segment reporting below is presented according to management reporting, with principle as described in note 1, and reconciled to the financial statement.

Note 2 Segment information

The Group’s revenue from contracts with customers has been disaggregated and presented in the tables below:

The Group’s business is divided into two business segments: Subsea/IMR Projects and Long-term Chartering.

The Group has gradually built the Subsea/IMR Projects segment to become a global provider of subsea services with a core focus on IMR. In addition to the IMR market, the Subsea/IMR Projects segment has focused on mooring, light construction and survey work utilising the Group’s core competences and assets.

The Long-term Chartering segment covers letting of vessels to thirdparty charterers and is managed through the Group’s associated company DOF Management AS and Norskan Offshore Ltda. The Long term Chartering segment is built on DOF Subsea’s long standing as an internationally recognised vessel owner and operator of high-end subsea vessels.

Operating revenue consistent with management reporting

4Q 2019

4Q 2018

2019

2018

Long-term Chartering 504 399 1 914 1 574Subsea/IMR Projects 825 767 3 233 3 033Total consistent with management reporting 1 329 1 166 5 147 4 607Reconciliation to equity method -339 -221 -1 201 -865

Total 990 945 3 946 3 742

EBITDA consistent with management reportingLong-term Chartering 396 298 1 459 1 203Subsea/IMR Projects 147 44 436 199Total consistent with management reporting 543 342 1 895 1 402

Reconciliation to equity method -211 -21 -698 -260Total 333 321 1 201 1 142

Operating revenue

4Q 2019

4Q 2018

2019

2018

Lump sum contracts 136 75 357 125Day rate contracts 854 870 3 589 3 617Total operating revenue 990 945 3 946 3 742

Note 3 Operating revenue


17


Note 4 Financial income and expenses

Financial income and expenses 4Q 2019 4Q 2018 2019 2018

Interest income 16 15 70 52Other financial income 2 40 6 45Financial income 18 55 76 96

Interest expenses -137 -137 -554 -477Other financial expenses -41 -11 -61 -30Financial expenses -178 -148 -615 -507

Realised foreign currency net gain/loss on non-current debt 72 -12 124 -74

Realised foreign currency net gain / loss on current receivables / liabilities 19 -36 -24 -47Realised net gain / loss on financial derivatives -39 -30 -121 -47

Realised net gain / loss on derivative instruments and currency position 51 -78 -21 -168

Unrealised foreign currency net gain / loss on non-current debt 47 -144 -170 -149

Unrealised foreign currency net gain / loss on current receivables / liabilities -42 11 -40 -40

Net change in unrealised gain / loss on financial derivatives 79 -110 101 -26

Unrealised net gain / loss on derivative instruments and currency position 84 -244 -109 -214

Net financial income / loss -25 -414 -669 -794


18


Note 5 Tangible assets

31 .12 .2019

Vessels & periodic maintenance

ROVs

Operating equipments

Right-of-use assets

Total

Net booked value 31 .12 .18 10 035 730 338 - 11 100Implementation of IFRS 16 Leases - - - 284 284Net booked value 01 .01 . 10 033 730 338 284 11 384

Additions 122 109 36 6 274Disposal - - - - -Reclassification - - - - -Depreciation -298 -160 -67 -42 -565Impairment -498 - -20 -27 -545Currency translation differences -11 - 1 5 -6Net booked value 31 .12 . 9 350 679 287 226 10 542

31 .12 .2018 Vessels & periodic

maintenance

ROVsOperating

equipments

Newbuilds

Total

Net booked value 01 .01 . 10 525 856 381 11 11 773Additions 200 8 54 5 267Reclassification - 20 -11 -9 -Depreciation -310 -156 -86 - -552Impairment -330 -3 -1 - -334Currency translation differences -50 -2 -1 - -53Net booked value 31 .12 . 10 035 722 337 7 11 100

The vessels have been assessed for impairment on an individual basis as separate cash generating units. The impairment testing of the vessels resulted in impairment losses of NOK 59 million in Q4 and NOK 498 million year to date. The impairment test of other tangible assets resulted in an imparment loss of NOK 47 million in Q4 and NOK 47 million year to date. The weak marked in the estimated future cash flow is prolonged compared to previous periods, including the uncer-tainty regarding the Group’s financial position.

Accounting PolicyThe Group estimates the vessels’ recoverable amount. The vessels’ recoverable amount is the higher of the vessels fair valueless costs of disposal and its value in use. Impairment losses are recognised for vessels where the recoverable amount is lower than book value.

In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate. Indetermining fair value less costs of disposal the Group uses average of brokers’ estimates, taken into account sales commission. Due to a limited number of vessel transactions in the current market the brokers’ estimates only to a limited extent represent the results of transactions in the market. The Group has sought to substantiate the broker valuations with value in use calculations for all vessels. Broker valuations are used where the Group can substantiate the broker valuations.

Value in use is determined using a discounted cash flow model under the ‘Going concern’ assumption. The estimated futurecash flows applied in value in use calculations are based on the Group’s most recently approved long-term forecasts. Management reviews and approve changes in the long-term forecasts on a regular basis, and at least quarterly. Cash flow estimates are established based on the Group’s principles and assumptions and are consistently applied. They are based on historical performance per vessel, in combination with current market situation and future expectations. Due to a prolonged weak marked and risk towards market recovery, the estimated future cash flow was revised in Q3 2019 to reflect these risks. In Q4 2019 the revised estimated cash flow has been kept adjusted for currency changes and effect of new contract awards. Management believes that estimates of future cash flows are reasonable. Changes in assumptions could materially affect value in use calculations.

Net booked value of right-of-use assets at 4th quarter 2019 consists of property with NOK 225 million and operating equip-ment of NOK 1 million.


19


Note 6 Goodwill

Goodwill is allocated to the Group`s two operating segments; Long term Chartering segment and Subsea/IMR segment. For goodwill in the Subsea/IMR Projects segment, recoverable amount is calculated based on discounted cash flows extracted from next year’s budgets and forecasts covering 5 years. No real growth is expected after 5 years. For the Long-term Chartering segment, value in use is the sum of value in use for all vessels allocated to the segment.

Goodwill is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. Continued challenging market situation, low utilisation on vessels, equipment and personnel has resulted in lower earnings and higher risk in both segments for a longer period. Furthermore, market recovery takes longer than previously assumed.

Year to date an impairment of NOK 117 million in Subsea/IMR segment and NOK 136 million in the Long-term Chartering segment has been recognised. After impairment a goodwill of NOK 85 million allocated to the Long-term Chartering segment is recognised. Impairment losses on goodwill cannot be reversed.

For further information about accounting policies for goodwill please refer to Annual Report for 2018.

Note 7 Tax

Deferred tax asset is recognised in the consolidated statement of financial position on the basis of unused tax losses carried forward or deductible temporary differences to the extent that it is probable there will be sufficient future earnings available against which the loss carried forward or deductible can be utilised. Continued challenging market situation, low utilisation on vessels, equipment and personnel has resulted in lower earnings and increased risk in some tax jurisdictions. In this context the inherent uncertainty in forecasting the amount, timing of future taxable profits and the reversal of temporary differences has increased. As a result of this, management has revised its estimates for future taxable profits and has in 2019 recognised as tax cost NOK 216 million related to change in deferred tax asset. In Q4 2019 the Group recognised tax cost of NOK 54 million related to change in deferred tax asset. The recognised tax cost in Q4 2019 came as a result of significantly weaker development in taxable profit for some project in Brazil than previously expected.

For further information about accounting policies for deferred tax asset and tax loss carried forward please refer to Annual Report for 2018.


20


Note 8 Net interest-bearing debt

31 .12 .2019 31 .12 .2018

Non-current interest-bearing debt Bond loans 2 122 2 480Debt to credit institutions 3 910 5 278Lease liabilities 325 -Total non-current interest-bearing debt 6 357 7 759

Current interest-bearing debtBond loans 467 100Debt to credit institutions 2 761 1 969Lease liabilities 79 -Total current interest-bearing debt 3 307 2 069

Total non-current and current interest-bearing debt 9 665 9 827

Net interest-bearing debtCash and cash equivalent 934 1 142Other interest-bearing assets - non-current 225 79Total net interest-bearing debt 8 505 8 606

Current portion of debt in the statement of financial position includes accrued interest expenses. Accrued interest expenses are excluded in the current interest-bearing debt above.

Total net interest-bearing debt is redefined with the implementation of IFRS 16 Leases. Below is the impact as result of the new accounting standard:

31 .12 .2018Implementation of

IFRS 16 Leases 01 .01 .2019

Total non-current interest-bearing debt 7 759 394 8 153Total current interest-bearing debt 2 069 75 2 144

Total non-current and current interest-bearing debt 9 827 470 10 297

Net interest-bearing debtTotal interest-bearing assets 1 221 185 1 406Total net interest-bearing debt 8 606 285 8 891


21


Amortised costs are not included in the repayment profile above.

A non-current loan has been provided by Eksportfinans and is invested as a restricted deposit. The repayment terms on the loan from Eksportfinans are equivalent with the reduction on the deposit. The loan is fully repaid in 2020. The cash deposit is included in restricted deposits.

As a result of the continued challenging market situation, the risk of lower utilisation and earnings represents an increased risk for the Group. As previously reported, the Group has experienced that regular refinancing (rollover) of existing loans are challenging. During the 4th quarter, the Group was given extensions of two rollovers until end of February 2020. The Group has a temporary deferral of loan repayments and instalments until 28th of February and has applied the banks for further deferral of loan repayments and instalments until 30th of April, in order to reach a long-term financial solution. Postponed repayments (balloons and instalments) from Q4 2019 are included in short-term part of long-term debt with NOK 1 094 million.

The Board of Directors and the Management are working on a long-term financial solution adapted to the Group’s earning capacity in a challenging market. Extensions and postponements of ordinary repayments (balloons and instalments) must be seen in relation to the process of adjusting the repayment profile for the Group and the process of strengthening equity with capital contribution. As this process is unlikely to conclude within end of February 2020 the Group has requested further extensions and postponements of repayments (balloons and instalments).

The effect of not being able to obtain a long-term financial solution, may result in a reclassification of the Group’s non-current debt to credit institutions and bond loans from non-current debt to current debt. If a reclassification should occur, the consequence will be that the amount of current debt will increase by NOK 6.0 billion at period end.

Debt repayment profileQ1

2020Q2

2020Q3

2020Q4

2020

Total current

debt 2021 2022 2023 2024 Thereafter Total

Bond loan - -467 - - -467 - -1 292 -840 - - -2 599Debt to credit institutions -672 -224 -214 -307 -1 417 -632 -556 -471 -307 -716 -4 099Debt to credit institutions, balloons -825 - -516 - -1 341 -328 -166 -756 - - -2 591Total repayment -1 498 -691 -730 -307 -3 225 -959 -2 014 -2 067 -307 -716 -9 288

Cash changes Non-cash changes

Interest bearing debtBalance

31 .12 .18Implementation of

IFRS 16 Leases Cash flowsProceed lease

debtAmortised loan

expenseCurrency

adjustmentBalance

31 .12 .19

Bond loans 2 580 - - - -5 14 2 590 Debt to credit institutions 7 247 - -730 82 11 61 6 671 Lease liabilities - 470 -77 6 - 6 404

Total interest bearing debt 9 827 470 -807 88 6 80 9 665

Cash and non-cash changes in total borrowingsChanges in total borrowings over a period consists of both cash effects (disbursements and repayments) and non-cash effects (amortisations and currency translation effects). The following is the changes in the Group’s borrowings:

The table below summarises the repayment profile of the Group’s financial liabilities, excluding interests and IFRS 16 Leases:

Note 8 Interest-bearing debt (continued from previous page)


22


Share of debt secured by fixed interest rate:

Fixed rateBalance

31 .12 .2019

NOK 64% 4 412 USD 69% 4 494CAD 100% 383Total debt 68% 9 288

Note 8 Interest-bearing debt (continued from previous page)

Financial covenants

The Group’s long-term financing agreements include the following covenants (based on the proportionate consolidation method of accounting for joint ventures): • The Group shall have available cash of at least NOK 500 million at all times• The Group shall have value-adjusted equity to value-adjusted assets of at least 30%• The Group shall have book equity of at least NOK 3 000 million at all times• The Group shall have positive working capital at all times, excl. current portion of debt to credit institutions• The fair value of the Group’s vessels shall always be at least 110-130% of the outstanding loan amount

In addition to the above mentioned financial covenants, the loan agreements are also subject to the following covenants:• The Group’s assets shall be fully insured• There shall not be any change to classification, flag, management or ownership of the ships without the prior written approval of the lenders• DOF ASA shall be the principal shareholder in DOF Subsea AS, and own a minimum of 50.1 % of the shares• DOF Subsea AS shall not performe merge or demerge activities without the prior written approval of the lenders • DOF Subsea AS shall report financial information to the lenders and Oslo Stock Exchange on a regular basis • The Group’s vessels shall be operated in accordance with applicable laws and regulations

The Group is in compliance with the financial covenants at period end.


23


31 .12 .2019 31 .12 .2018Instrument Received Contract amount Contract amountForeign exchange contracts NOK/EUR 500 478Foreign exchange contracts NOK/USD 1 132 1 897Foreign exchange contracts USD/NOK 18 -

Note 9 Financial instruments and hedging activities

31 .12 .2019 31 .12 .2018

Assets Liabilities Assets Liabilities

Non-current and current portionInterest rate swaps 16 5 27 13Foreign exchange contracts 23 21 4 109Total non-current and current 39 27 31 121

Non-current portionInterest rate swaps 16 4 27 11Foreign exchange contracts - - 2 5Total non-current portion 16 4 29 17

Total current portion 23 23 2 105

As of period end the Group held the following foreign exchange rate derivatives, not qualified for hedge accounting:


24


Note 12 Shareholder information

Name No . shares Shareholding Voting shares

DOF ASA 167 352 762 100% 100%Total 167 352 762 100 % 100 %

In November 2019, a sale purchase agreement between DOF ASA and FRC Lux Holding Limited and Dolphin Invest 2 AS was signed regarding the transfer of shares from FRC Lux Holding Limited and Dolphin Invest 2 AS to DOF ASA. The transaction is completed and DOF ASA own 100% of DOF Subsea AS.

Note 10 Transactions with related parties

Description of transactions with related parties is given in the Group’s Annual Report for 2018. There are no major changes in type of transactions between related parties during the third quarter 2019. The Group has receivables and liabilities towards DOF ASA, Norskan, DOF Management and Marin IT related to operations.

Note 11 Investments in associates and joint ventures

The Group has the following investments in associated and joint ventures accounted for using the equity method:

Name of entityPlace of business /

country of incorporation Industry% of ownership

interestNature of

relationshipMeasurement

method

DOFCON Brasil Group Norway Subsea Chartering 50% Joint Venture EquityDOF Management Group Norway Vessel management and operation 34% Associate EquityMarin IT AS Norway IT 35% Associate EquityMaster and Commander AS Norway Seismic Chartering 20% Associate Equity

TotalBooked value of investments 01.01 1 553Share of net profit / loss for the period 240Share of other comprehensive income 66Booked value of investments 31 .12 1 859

Reconciliation of the aggregate carrying amounts in investments:


25


Note 14 Events after period end

After period end, the Group has been awarded several contracts in the Subsea/IMR Project segment. In the APAC region, DOF Subsea was awarded several contracts securing vessel and resource utilisation in Q1 2020 and first part of Q2 2020. These contract awards will utilise Skandi Singapore. In the North America region, DOF Subsea secured multiple contracts, of which Skandi Neptune will perform a pre-lay and LBL array installation activities in Guyana, subsea installation work in Trinidad and well-head removal work in Canada. Further, the Harvey Deep Sea will perform a large ocean bottom node survey in the GoM, in addition to several shorter IMR and light construction projects. In Brazil, the joint venture vessel Skandi Vitoria was taken out of layup and commenced a 2-year contract with TechnipFMC. In the Atlantic region, Geosund was awarded a contract for seismic node installation in Nigeria and Skandi Seven secured an extension of exisitng contract in Angola. In addition, the Geosea has been awarded a 5 year contract with N-Sea and end client the Royal Netherlands Navy.

After period end, the Group has continued its work to secure a long term financial solution. The Group is making progress with its stakeholders, including a constructive dialogue with banks to adapt bank facilities to the current market environment. An agreement with the bondholders in DOFSUB07, DOFSUB08 and DOFSUB09 was reached in December where the pricing and maturity of the outstanding bonds was adjusted. The agreement will be confirmed by a new bond summons and a bond-holders meeting covering all three bonds. However, the agreement with bondholders is dependant on a solution with the banks and a that new equity is injected into the Company. The majority shareholder in DOF Subsea, DOF ASA, has announced that they will support an equity injection in DOF Subsea if a satisfactory refinancing for the DOF Group is achieved (including DOF Subsea). Based on the current dialogue with all stakeholders, the best estimate for reaching an agreement on the long term solution is by the end of 1st quarter 2020, however no assurance can be given at this stage.

Note 13 General

This Financial Report has been prepared in accordance with the standard for interim reporting (IAS 34). The Financial Report does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s Annual Report for 2018. The Financial Report is unaudited.

The Financial Reports are prepared on the assumption of a going concern. However, the Group’s financial situation is at risk as a long-term financing solution is not in place. The Board of Directors and the Management are working on a long-term financial solution for the Group. The discussion with the relevant stakeholders has been constructive, but time consuming. However, no assurance can be given that the Group will be successful in this respect. If the negotiations are not successful, this may affect the ‘Going concern’ assumption. If the Group cannot be treated as going concern, the valuation of the Group’s assets will be further revised.


26


Note 15 Changes in accounting policies 2019

IFRS 16 Leases replaces the current standard IAS 17 Leases and related interpretations. IFRS 16 Leases removes the current distinction between operating and financing leases for lessees, and requires recognition of an asset (the right to use the leased item) and a financial liability representing its obligation to make lease payments. The Group adopted the standard at January 1, 2019.

The Group applied the simplified transition approach and comparative amounts for the year prior to first adoption are not restated.

Reference is made to note 32 ‘Accounting policies’, paragraph Z. in the Group’s annual report 2018 for a detailed description of policy- and transition choices made upon the implementation of the standard. There have been no changes to these elements.

The implementation of the standard has increased the statement of financial position with lease liabilities, net investments and right-of-use assets. The Group’s equity has not been impacted by the implementation of IFRS 16. The following line items in the financial report have been impacted as result of the new accounting standard:

Consolidated statement of financial position 31 .12 .2018Implementation of

IFRS 16 Leases 01 .01 .2019

Tangible assets 11 100 284 11 384 Other non-current receivables 3 314 185 3 499 Total non-current assets 14 414 470 14 884 Total current assets 2 062 - 2 062 Total assets 16 476 470 16 946

Total equity 5 735 - 5 735

Non-current liabilities 7 793 394 8 187 Current liabilities 2 949 75 3 024 Total liabilities 10 742 470 11 212 Total equity and liabilities 16 476 470 16 947

Lease expenses within the scope of the standard are removed and replaced by depreciation of right-of-use assets and interest costs. Lease income within the scope of the standard are removed and replaced by interest income.

Reconciliation of lease commitments to lease liabilities 01 .01 .2019Operating lease commitments (IAS 17) at 31 December 2018 583Practical expedient related to short-term- and low-value leases -76Effect of discounting -77Escalation and amendments to lease agreements 40Lease liabilities recognised at initial application 470

The table below presents a reconciliation of the Group’s operating lease liabilities as reported under IAS 17 Leases per 31 December 2018, and the IFRS 16 lease liability recognised on 1 January 2019.


27


Alternative performance measurementsThe Group’s presents alternative performance measurements (APM) that are regularly reviewed by management and aim to enhance the understanding of the Group’s performance. APMS are calculated consistently over time and are based on financial data presented in accordance with IFRS and other operational data as described in the table below.

Measure Description Reason for including

Operating profit before depreciation (EBITDA)

EBITDA is defined as operating profit, including profit from sale of non-current assets, before impairment of tangible and intangible assets, depreciation of tangible assets and amortisation of contract assets. EBITDA represents earnings before interest, tax, depreciation and amortisation, and is a key financial parameter for the Group.

This measure is useful in evaluating operating profitability on a more variable cost basis as it excludes depreciation, impairment and amortisation expenses related primarily to capital expenditures and acquisitions that occurred in the past. EBITDA shows operating profitability regardless of capital structure and tax situations with the purpose of simplifying comparison in the same industry.

EBITDA marginEBITDA margin presented is defined as EBITDA divided by operating revenue.

Enables comparability of profitability relative to operating revenue.

Operating profit (EBIT) EBIT represents earnings before interest and taxEBIT shows operating profitability regardless of capital structure and tax situations.

EBIT marginEBIT margin presented is defined as EBIT divided by operating revenue.

Enables comparability of profitability relative to operating revenue.

Net interest-bearing debt

Net interest-bearing debt consists of both current and non-current interest-bearing liabilities less interest bearing financial assets, cash and cash equivalents. Non-current receivables from joint ventures are not included in net interest-bearing debt. Cash and cash equivalents will include restricted cash. Current interest-bearing debt includes interest-bearing debt related to asset held for sale.

Net interest-bearing debt is a measure of the Group’s net indebtedness that provides an indicator of the overall statement. It measures the Group’s ability to pay all interest-bearing liabilities within available interest bearing financial assets, cash and cash equivalents, if all debt matured on the day of the calculation. It is therefore a measurement of the risk related to the Group’s capital structure.

Working capitalThe working capital position of the Group is equal to current assets less current liabilities.

It is a measure of the Group’s liquidity and efficiency, and demonstrates the Group’s ability to pay its current liabilities.

Return on net capital Profit / loss for the period divided by equity.

Return on net capital represents the total return on equity capital and shows the Group’s ability to turn assets into profits.

Equity ratio Equity divided by assets at the reporting date.Measure capital contributed by shareholders to fund the Group’s assets.

Value-adjusted equity ratio

Value-adjusted equity divided by value-adjusted assets at the reporting date. The market value is used for the vessels.

Measure capital contributed by shareholders to fund the Group’s assets.

Book value equity per share Equity divided by number of shares outstanding.Measures the Group’s net asset value on a per-share basis.

Value-adjusted equity per share

Value-adjusted equity divided by number of shares outstanding. The market value is used for the vessels.

Measures the Group’s net asset value on a per-share basis.

Other definitions

Measure Description

Market valueCalculated average vessel value between several independent brokers’ estimates based on the principle of “willing buyer and willing seller”.

Vessel utilisation

Vessel utilisation is a measure of the Group`s ability to keep vessels in operation and on contract with clients, expressed as a percentage. The vessel utilisation numbers are based on actual available days, including yard-stay days for dry docking, repair and upgrade/conversion, transits and idle time.

Contract backlog

Sum of undiscounted revenue related to secured contracts in the future and optional contract extensions as determined by the client in the future. Contract backlog excludes master service agreements (MSAs) within the Subsea/IMR Projects segment. Under the MSAs only confirmed POs are included.

Firm contract backlogSum of undiscounted revenue related to secured contracts in the future. Secured contracts are contracts signed with clients in the past, covering future delivery of services.

Backlog optionsSum of undiscounted revenue related to optional contract extensions as determined by the client in the future.

Note 16 Performance measurement definitions


28


Supplemental information

Condensed statement of comprehensive income 5 last quarters

4Q 2019 3Q 2019 2Q 2019 1Q 2019 4Q 2018

Operating revenue 1 329 1 458 1 257 1 103 1 166

Operating expenses -763 -909 -809 -738 -824Share of net income of associates and joint ventures -22 -7 -3 - -1Profit from sale of non-current assets - 3 - - -Operating profit before depreciation and impairment (EBITDA) 543 545 445 365 342

Depreciation and impairment -396 -938 -238 -209 -343Operating profit (EBIT) 148 -393 207 156 -1

Financial income 9 6 6 6 14Financial expenses -237 -204 -193 -200 -194Realised gain / loss on financial instruments 51 -47 27 -56 -78Unrealised gain / loss on financial instruments 90 -340 11 102 -244Net financial income / loss -87 -585 -148 -148 -501

Profit / loss before tax 61 -261 59 9 -503Tax expenses -90 -112 -45 -33 44

Profit / loss for the period -30 -1 090 14 -25 -458

The supplemental information below is presented according to management reporting, based on the proportionate consolidation method. Proportionate consolidation method implies full consolidation for subsidiaries, and consolidation of 50% of the comprehensive income and financial position for the joint ventures.


29


Condensed statement of financial position 5 last quarters

Assets 4Q 2019 3Q 2019 2Q 2019 1Q 2019 4Q 2018

Intangible assets 276 314 651 679 688Tangible assets 16 783 17 366 17 489 17 707 16 847Financial assets 357 422 431 453 283Total non-current assets 17 417 18 102 18 571 18 840 17 818

Other current assets 1 120 1 342 1 128 1 165 1 101Cash and cash equivalents 1 238 1 051 1 092 1 152 1 430

Total current assets 2 358 2 393 2 219 2 317 2 532

Total assets 19 775 20 495 20 790 21 156 20 350

Equity and liabilities 4Q 2019 3Q 2019 2Q 2019 1Q 2019 4Q 2018

Paid in equity 4 344 4 344 4 344 4 344 4 344Other equity 171 193 1 191 1 170 1 197Non-controlling interests 181 182 197 195 194Total equity 4 697 4 719 5 732 5 708 5 735

Bond loans 2 122 2 168 2 087 2 474 2 480Debt to credit institutions 7 913 8 564 8 664 9 030 8 605Other non-current liabilities 352 387 375 412 45Total non-current liabilities 10 387 11 119 11 126 11 915 11 130

Current portion of debt to credit institutions 3 876 3 618 3 090 2 715 2 554Other current liabilities 815 1 039 843 817 930Total current liabilities 4 692 4 657 3 932 3 533 3 484

Total liabilities 15 079 15 776 15 058 15 448 14 615

Total equity and liabilities 19 775 20 495 20 790 21 156 20 350

Key figures

4Q 2019 3Q 2019 2Q 2019 1Q 2019 4Q 2018

Profit per share (NOK) -0,18 -6.52 0.09 -0.15 -2.74EBITDA margin 41 % 39 % 35 % 33 % 29 %EBIT margin 11 % -27 % 16 % 14 % -0 %Return on equity -1 % -21 % 0 % -0 % -8 %Book value equity per share (NOK) 28.06 28.20 34.25 34.11 34.27Value-adjusted equity per share (NOK) 42.79 43.85 45.03 45.14 45.81Net interest-bearing debt (NOK million) 12 633 13 280 12 721 12 774 11 983


30

DOF Subsea currently owns one of the largest fleet of high-end construction vessels (including newbuilds) in the world. These assets offer a versatile, new generation of high-powered and purpose-built vessels with broad offshore capabilities.

Owned vessels

Skandi Acergy

Geograph Geoholm Geosea

Geosund

Skandi Carla Skandi Constructor

Skandi Achiever

Skandi Hawk

Skandi Africa Skandi BuziosSkandi Açu

DOF Subsea vessels


31

Skandi Patagonia

Skandi Skansen

Skandi Salvador

Skandi Neptune Skandi NiteroiSkandi Hercules

Skandi Vitoria

Skandi Seven Skandi Singapore

Skandi Vinland

Skandi RecifeSkandi Olinda


32

Harvey Deep-Sea Harvey Sub-Sea

Chartered-in vessels

DOF Subsea charters in vessels on short and long-term contracts based on operational needs, building greater flexibility and a complementary fleet mix to meet our clients’ subsea challenges.

Skandi Darwin

DOF Subsea vessels (continued)

AUSTRALIA

DOF Subsea Australia Pty Ltd5th Floor, 181 St. Georges TcePerth, Wa 6000 AUSTRALIAPhone: +61 8 9278 8700Fax: +61 8 9278 8799

DOF Management Australia5th Floor, 181 St. Georges TcePerth, Wa 6000 AUSTRALIAPhone: +61 3 9556 5478 Mobile: +61 418 430 939

BRAZIL

DOF Subsea Brasil Serviços LtdaRua Fiscal Juca, 330 Q: W2 – L: 0001 Loteamento Novo Cavaleiros Vale Encantado – Macaé/RJ BRAZIL - CEP 27933-450 Rio address: Rua Lauro Muller 116 – Offices1701 – BotafogoRio de Janeiro – RJBRAZIL – CEP: 22290-160Phone: +55 21 2103-5708

CANADA

DOF Subsea Canada26 Allstone Street, Unit 2Mount Pearl, NewfoundlandCANADA, A1N 0A4Phone: +1 709 576 2033Fax: +1 709 576 2500

SINGAPORE

DOF Subsea Asia Pacific Pte Ltd25 Loyang CrescentBlock 302 TOPS Avenue 1#01-11Singapore 508988Phone: +65 6561 2780Fax: +65 6561 2431

DOF Management Pte Ltd25 Loyang CrescentBlock 302 TOPS Avenue 3#01-11Singapore 508988Phone: +65 6868 1001Fax: +65 6561 2431

GLOBAL HQ

DOF Subsea ASThormøhlensgate 53 C5006 Bergen NORWAYPhone: +47 55 25 22 00Fax: +47 55 25 22 01

NORWAY

DOF Subsea Norway ASThormøhlensgate 53 C5006 Bergen NORWAYPhone: +47 55 25 22 00Fax: +47 55 25 22 01

SEMAR ASOksenøystein 121366 Lysaker NORWAYPhone: +47 67 12 40 06Fax: +47 67 12 40 06

DOF Management ASAlfabygget5392 StorebøNORWAY

Thormøhlensgate 53 C5006 Bergen NORWAYPhone: +47 56 18 10 00Fax: +47 56 18 10 06

ANGOLA

DOF Subsea AngolaBelas Business Park-Talatona Edificio Bengo, 1º AndarSala 106/107, LuandaRepublic of AngolaPhone: +244 222 43 28 58Fax: +244 222 44 40 68Mobile: +244 227 28 00 96 +244 277 28 00 95

UNITED KINGDOM

DOF Subsea UK LtdHorizons House, 81-83 Waterloo Quay Aberdeen, AB11 5DE UNITED KINGDOMPhone: +44 1224 614 000Fax: +44 1224 614 001

DOF Subsea S&P UK LtdHorizons House, 81-83 Waterloo Quay Aberdeen, AB11 5DE UNITED KINGDOMPhone: +44 1224 614 000Fax: +44 1224 614 001

CSL EngineeringHorizons House, 81-83 Waterloo Quay Aberdeen, AB11 5DE UNITED KINGDOMPhone: +44 1224 285 566Fax: +44 1224 285 599

DOF (UK) LtdHorizons House, 81-83 Waterloo Quay Aberdeen, AB11 5DE UNITED KINGDOMPhone: +44 12 24 58 66 44Fax: +44 12 24 58 65 55

USA

DOF Subsea USA Inc5365 W. Sam Houston Parkway Suite 400, Houston, Texas 77041, USAPhone: +1 713 896 2500Fax: +1 713 726 5800

DOF Subsea ASThormøhlens gate 53 C

5006 BergenNORWAY

www.dofsubsea.com

Documents

FINANCIAL REPORT Q4 2019 - DOF Subsea...DOF SUBSEA GROUP| Financial Report Q4 2019 5 million (NOK 264 million in 2018). The operating profit after depreciation and impairment (EBIT)