Q1 2008 report

Please find the Q1 2008 Interim Consolidated Financial Information attached. BW Offshore will host a presentation of the financial results at 09:00 (CET) today at "Shippingklubben" (Haakon VII gt 1, Oslo). The presentation will also be broadcasted via webcast. Please visit www.bwoffshore.com for login-details.
 
Main figures
(Figures in brackets refer to corresponding figures for 2007)
 
EBITDA was USD 15.8 million (USD 9.5 million) in the first quarter. The increase in EBITDA is primarily attributable to increased activity arising from the acquisition of APL (Advanced Production & Loading) Plc (APL), additional units in operation and increased share of profit of associates.
 
Total revenue amounted to USD 108.3 million (USD 97.8 million). The increase in revenue is a result of revenue from the inclusion of APL of USD 64.6 million (USD 0.0 million) and additional units in operation set off by no revenue recorded in the first quarter 2008 related to the YÙUM K'AK'NÁAB conversion (USD 65.8 million).
 
Operating expenses in the first quarter totaled USD 101.7 million (USD 89.3 million). Operating expenses for Floating production were reduced from USD 89.3 million in the first quarter 2007 to USD 40.3 million in the first quarter 2008, primarily attributable to no expenses included related to the YÙUM K'AK'NÁAB conversion set off by increased operating expenses related to additional units in operation.  Operating expenses related to Technology and Installation services amounted to USD 63.5 million in the first quarter (USD 0.0 million).
 
Share of profit of associates amounting to USD 9.2 million (USD 1.0 million) relates to the Group's investments in Prosafe SE (USD 9.2 million) and  Nexus Floating Production Limited (Nexus) (USD 0.0 million). At 31 March 2008, the Group owned 26.5% of the shares in Prosafe and 49.7% of the shares in Nexus.
 
Net financial items for the first quarter amounted to USD -37.1 million (USD 26.9 million). The reduction
in net financial result relates to increased financing expenses arising from the acquisitions of shares in Prosafe and APL, increased capital expenditure related to vessels in operation and conversion candidates, costs related to the refinancing of the company, loss in fair value on an interest collar agreement and unrealised net currency exchange loss on loans denominated in Norwegian Kroner (NOK).
 
Net result after tax in the first quarter amounted to USD -32.1 million (USD 29.2 million).
 
Total assets amounted to USD 3,060.6 million at 31 March 2008 (USD 2,258.6 million). The increase in total assets is a result of the conversions of YÙUM K'AK'NÁAB and BW Peace, increased activity from the acquisition of APL and Prosafe shares, and the acquisition of the vessels BW Pioneer and M/T Tiara.
 
Total equity amounted to USD 1,477.5 million at 31 March 2008 (USD 1,392.5 million).
 
Cash flow from operating activities in the first quarter 2008 was USD 27.9 million (USD -393.7 million). The positive cash flow relates primarily to a decrease in working capital in the floating production segment due to no working capital tied up in the YÙUM K'AK'NÁAB conversion project. Cash flow from investing activities was negative due to expenditures related to the Cascade Chinook project.
 
Business segments
 
Floating production
EBITDA for the first quarter amounted to USD 12.6 million (USD 9.5 million). The result is affected by high operating expenses for YÙUM K'AK'NÁAB (which commenced operation in July 2007) and the other vessels in operation, high tender activity and increased administrative expenses arising from the strengthening of NOK against USD. Share of profit of associates (Prosafe SE) amounting to USD 9.2 million (USD 1.0 million) are included in the first quarter figures.
 
Cash flow from operating activities in the first quarter 2008 was USD 11.8 million (USD -393.7 million). The increase in cash flow relates to a decrease in working capital due to no working capital tied up in the YÙUM K'AK'NÁAB conversion project
 
Technology & Installation Services
EBITDA for the first quarter amounted to USD 1.1 million. The EBITDA-margin was 1.6%. The revenues in the first quarter were USD 66.7 million. The most significant events were the delivery and installation of the mooring and subsea systems for the Aker Floating Production`s Reliance MAD6 project. The poor result in the segment is related to the impact of delays and cost overruns for the Maari and Montara projects. The projects are now completed. Other noteworthy events in the quarter were the final hook up of the Alvheim and Xijiang Buoys. Share of profit from associates (Nexus Floating Production) amounted to USD 0.0 million in the first quarter.
 
Cash flow from operating activities in the first quarter was positive by USD 16.1 million. Reduction in working capital related to ongoing projects is the main reason for this development.
 
 
Board of Directors, 15 May 2008
 
For further information, please contact:
Svein Moxnes Harfjeld, CEO, BW Offshore, +47 4140 4886
Knut R. Sæthre, CFO, BW Offshore, +47 9111 7876
 
 
BW Offshore is one of the world's leading FPSO contractors and a market leader within advanced offshore loading and production systems to the oil and gas industry. BW Offshore has 25 years' experience and has successfully delivered 12 FPSO projects and 42 turrets and offshore terminals. BW Offshore's technology division APL has delivered solutions for production vessels, storage vessels and tankers in a wide range of field developments. Adapting through competence, in-house technology, solid project execution and operational excellence, BW Offshore ensures that customer needs are met through versatile solutions for offshore oil and gas projects.  BW Offshore is headquartered in Norway, and has a global network with offices in Europe, Asia Pacific, West Africa and the Americas. BW Offshore has 1,100 employees and is listed on the Oslo Stock Exchange. For more information, please visit www.bwoffshore.com and www.apl.no.