REPORT FOR SECOND QUARTER 2014 AND THE FIRST HALF YEAR 2014

Highlights 2Q 2014:

• Operating revenues were NOK 2 771 million (NOK 2 607 million)
• Operating result before depreciation (EBITDA) was NOK 845 million (NOK 1 138 million) 
• Operating result (EBIT) was NOK 158 million (NOK 642 million)
• Net result after tax was NOK 130 million (NOK 550 million)
• Earnings per share were NOK 1.9 (NOK 8.4)

Post quarter:

• Completed two senior unsecured bond issues of NOK 900 million and NOK 600 million,         with maturities in 2019 and 2021, respectively

Financial information

Following the acquisition of Fred. Olsen Production ASA on 20 December 2013 by Yinson Production Ltd., the business segment Floating Production is presented as discontinued operations in the comparable 2013 figures in the income statement.

The Group of companies´ operating revenues amounted to NOK 2 771 million (NOK 2 607 million) in the quarter. Offshore Drilling had operating revenues of NOK 1 638 million (NOK 1 788 million), Renewable Energy NOK 116 million (NOK 138 million), Shipping / Offshore wind NOK 405 million (NOK 330 million), Cruise NOK 377 million (NOK 340 million) and Other investments NOK 235 million (NOK 10 million).

NHST Media Group has from May 2014 been fully consolidated in Bonheur ASA, following the increase in ownership from 35.6% to 54.0%. The segment Other investments obtained increased revenues of NOK 225 million, of which NOK 220 million is related to two months revenues of NHST Media Group. For further information see note 7. Total revenues have been positively impacted by higher USD, GBP and EUR against NOK compared with the corresponding quarter last year. USD was on average approximately 3% higher in 2 quarter 2014 compared to 2 quarter 2013, while GBP and EUR, respectively, were 12% and 8% higher.

Operating result before depreciation (EBITDA) in the quarter was NOK 845 million (NOK 1 138 million).

The decrease from corresponding period last year of NOK 293 million is mainly due to lower EBITDA within Offshore drilling which achieved EBITDA in the quarter of NOK 639 million (NOK 935 million),within Renewable energy which achieved NOK 68 million (NOK 94 million) and Cruise which achieved NOK - 8 million (NOK 9 million). This was partly offset by increased EBITDA within Shipping / Offshore wind which had EBITDA of NOK 158 million (NOK 127 million) and within Other investments which achieved an improvement of NOK 15 million in the quarter.

Depreciation in the quarter was NOK 687 million (NOK 496 million).

Operating result (EBIT) was NOK 158 million (NOK 642 million).

Net financial items were NOK - 73 million (NOK 166 million). Net interest expenses in the quarter were NOK 147 million (NOK 123 million) and net currency gain was NOK 95 million (gain NOK 137 million). Net unrealized loss related to fair value adjustment of financial instruments was NOK - 10 million (gain of NOK 109 million). No dividends were received during the quarter, while a dividend of NOK 65 million from IT Fornebu Properties AS (now named Koksa Eiendom AS) was received in 2 quarter 2013.

Net result in the quarter was NOK 130 million (NOK 550 million), of which NOK 63 million relates to the majority interests (NOK 273 million). The non-controlling interests´ share of net result in the quarter was NOK 67 million (NOK 276 million).

Revenues year to date were NOK 5 471 million (NOK 4 870 million) while EBITDA year to date were NOK 1 720 million (NOK 1 978 million). Operating result (EBIT) year to date was NOK 504 million
(NOK 1 010 million). Net financial items were NOK - 245 million (NOK 125 million) and net result after estimated tax from continuing operations was NOK 262 million (NOK 1 094 million).   Net result after tax and discontinued operations was NOK 262 million (NOK 869 million), of which NOK 112 million (NOK 352 million) relate to the majority interests

Other information

Capital and financing

During the first half year investments were mainly related to Offshore Drilling (FOE) and Renewable Energy (FOR).

Within FOE, capital expenditures amounted to NOK 4 161 million, related to delivery of new build, class renewal surveys and general upgrades.

FOR had capital expenditures of NOK 420 million, mainly related to the construction of Mid Hill wind farm, and pre-construction activities on windfarms in Norway, Sweden and Scotland.

In total the Group of companies’ investments in Property, plant and equipment amounted to NOK 4 615 million in the first half year of 2014.

In the 2 quarter, the Group of companies increased its shareholding in NHST Media Group, by purchasing 236 988 additional shares, a total investment of NOK 91 million.

Gross interest bearing debt of the Group of companies as per end of 2 quarter was NOK 16 785 million, an increase of NOK 4 243 million since year end 2013. Cash and cash equivalents amounted to NOK 5 862 million, an increase of NOK 483 million since year end 2013. Net interest bearing debt of the Group of companies per 2 quarter 2014 was NOK 10 923 million, an increase of NOK 3 761 million since year end 2013. The equity to asset ratio was 35% compared with 40% at year-end 2013. 

Subsequent events

Bonheur ASA has successfully completed a NOK 900 million senior unsecured bond issue with maturity in 2019 and a NOK 600 million senior unsecured bond issue with maturity in 2021. Ganger Rolf ASA is guarantor for both issues. Settlement date was 9 July 2014. Applications will be made for listing of the bonds on Oslo Stock Exchange. Net proceeds from the bond issues will be used for refinancing of existing debt, including the NOK 1 000 million outstanding under the BON01 bond issue with ISIN NO 0010560683 and maturity on 15 December 2014, and for general corporate purposes. Ganger Rolf ASA has borrowed 50% of the proceeds from the bond issues from Bonheur ASA at identical terms.

Dividend / Annual General Meeting in Bonheur ASA

At the Annual General Meeting in Bonheur ASA on 28 May 2014, the proposed dividend payment of NOK 7.00 per share was approved. The dividend was paid on 25 June, amounting to NOK 285.5 million in total.