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GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
HIGHLIGHTS IN THE QUARTER
• Net loss of NOK 3.4 million in the period
• EBITDA of NOK 18,4 million in the period
• Positive EBITDA contribution of NOK 33 million from core activities
• Negative EBITDA contribution of NOK 15 million from strategic value chain investments in
development phase
• Contract backlog of NOK 1,456 million from time charters and subsea contracts
• Solid financial capacity; NOK 615 million in liquid assets
OUTLOOK
• Result in 2009 weaker than in 2008, due to drop in day rates, reduced employment rate for
vessels with short term contract coverage and costs related to the establishment of new business
• A weak market in the short to medium term is expected to give rise to attractive investment
opportunities
• In a longer perspective the market outlook is regarded as positive, driven by a drop in the oil
production and corresponding need for extraction of new and existing petroleum resources
• Strategic initiative to expand activity in the value chain within the oil service market
• Good liquidity situation and low gearing results in strategic room for manoeuvre and limited need
for financing
KEY FIGURES
Figures in NOK million 1st quarter 1st quarter 31.12.2008
2009 2008
Operating income 146.7 112.0 573.0
EBITDA 18.4 26.2 197.5
EBIT -23.6 10.0 111.7
Net financial income and expenses 16.6 9.5 9.5
Profit before tax -7.0 19.5 121.2
Taxes 4.5 3.1 55.6
Net profit -2.5 22.7 176.8
Minority share -0.9 7.5 4.1
Net profit after minority share -3.4 30.2 180.9
Normalised profit before tax (1) -8.1 10.6 124.1
(1) Profit before tax adjusted for unrealized currency gains/losses, write-downs and profit from disposals.
st st
Earnings per share 1 quarter 1 quarter 31.12.2008
2009 2008
Shares outstanding (average) 43,622,883 43,587,156 43,587,790
Earnings per share (EPS) -0,06 0.52 4.15
Diluted EPS -0,06 0.52 4.15
/ GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
ABOUT GC RIEBER SHIPPING
GC Rieber Shipping’s business in the offshore/shipping segment includes ownership of
specialized vessels, high quality marine ship management, project development and
industrial portfolio management within the offshore subsea, ice research and support and
marine seismic segments. The company has a unique competence within offshore
operations in harsh environments, as well as design, development and maritime
operation of seismic vessels. Strategic investments in the value chain have added
considerable know-how and experience to the company in terms of offshore subsea and
marine seismic operations.
GC Rieber Shipping owns and operates six advanced multifunctional special purpose
vessels for defined markets within offshore subsea, ice research and support as well as
marine seismic segment. Furthermore, GC Rieber Shipping has, through a 51% owned
joint venture company, contracted four new offshore vessels for delivery in 2009/2010.
The company’s strategic value chain investments include the subsea contractor
Technocean (58 % stake), Octio Group, which specializes in permanent monitoring of oil
fields (60 % stake) and the geotechnical company Bluestone (40 % stake). The company
is also in charge of the ship management of ten seismic vessels owned by PGS,
CGGVeritas and Fugro, as well as project management and building supervision for four
advanced seismic new builds for PGS.
The company is headquartered in Bergen, Norway, with ship management offices in
Sevenoaks (England), Singapore and Yuzhno-Sakhalinsk (Russia) for international
representation. The company is listed on Oslo Børs with ticker RISH. Additional
information is available on the company’s web site www.gcrieber-shipping.no
FIRST QUARTER 2009 – FINANCIAL REVIEW
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with IAS 34 "Interim Financial Reporting" and
follows the same accounting principles as the annual financial statement. Profit and loss and balance
sheet items from joint ventures are included in the accounts using the gross method.
OPERATING INCOME AND EBITDA
Operating income in the first quarter 2009 increased by 31 % compared to the corresponding period in
2008. This is mainly due to developments in the exchange rate and charter income from the vessel
”Geo Explorer”, acquired in the third quarter 2008, as well as increased income from the subsidiary
Technocean. On the negative side, there was a loss of income from the vessel ”Polarbjørn”. The
vessel had an employment rate of 9 % in the first quarter 2009.
EBITDA in the first quarter 2009 amounted to NOK 18.4 million, which corresponds to a 30 %
reduction compared with the first quarter 2008 (NOK 26.2 million). This is mainly due to a negative
EBITDA contribution from the group’s value chain investments. These value chain investments are
currently being developed and are important in the work to further develop the group’s strategy in the
times to come. Although the ”Polarbjørn” has been without employment for a large portion of the
period, core activities provide good earnings.
/ GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
FOREIGN CURRENCY
The USD/NOK exchange rate has developed as follows:
Final exchange rate 31.03.2009 31.03.2008
6.68 5.09
Average exchange rate 1st quarter 2009 1st quarter 2008
6.87 5.31
As at 31 March 2009 a lower USD/NOK exchange rate (relative to 31.12.2008) has reduced equity by
NOK 3.8 million, due to translation differences on vessels, debt and liquid assets in the companies
with USD as functional currency.
Net financial items for the first quarter 2009 include NOK 12.7 million in net currency gains (first
quarter 2008: gain of NOK 8.5 million). Furthermore, net financial items include a positive
development in the market value of the group’s portfolio of financial hedging instruments amounting to
NOK 11.5 million (first quarter 2008: negative development of NOK 1.4 million).
In accordance with IAS 39, changes in the market value of financial hedging instruments are
recognised in the profit, because the group does not use hedge accounting for its financial
instruments.
INTEREST BEARING LIABILITIES
In the first quarter 2009 the group has paid NOK 4.7 million in ordinary loan instalments. No new loans
were drawn during this period. The average interest rate has been reduced due to lower USD interest
rates.
The refinancing risk for the group’s loan portfolio is limited. The average remaining duration is 6.6
years. Annual loan instalments amount to approximately NOK 67.8 million, with a balloon payment of
NOK 72.1 million in the fourth quarter 2009.
st st
Interest-bearing liabilities 1 quarter 2009 1 quarter 2008
Liabilities at end period (NOK 605.8 439.7
mill.)
Average liabilities (NOK mill.) 633.8 420.7
Average interest incl. margin 4.75% 5.72%
Proportion of liabilities in USD 96% 94%
Proportion of liabilities in NOK 4% 6%
LIQUIDITY/INVESTMENTS
The group’s liquidity is primarily held in NOK. During the first quarter 2009, the group’s investments in
vessels/equipment amounted to NOK 70 million. This is mainly related to the acquisition and
modification of the two crew vessels ”Polar Piltun” and ”Polar Baikal” for operation in the Sea of
Okhotsk. Furthermore, NOK 8 million was invested in associated companies and taxes amounting to
NOK 24 million were paid.
Liquid assets 31.03.2009 31.03.2008
Bank and interest-bearing securities (NOK mill.) 615.2 1,123.4
Available through credit facility (NOK mill.) 250.0 250.0
NET LIQUIDITY / LIABILITIES
The group had a net cash position (liquid assets minus interest-bearing debt) of NOK 9.4 million as at
31 March 2009, compared with a net cash position of NOK 683.7 million as at 31 March 2008.
/ GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
WRITE-DOWNS
As at 31 March 2009, the group has carried out a NOK 11.4 million write-down of vessel equipment.
The write-downs are distributed between the offshore subsea and marine seismic segments by NOK
3.8 million and NOK 7.6 million respectively.
SEGMENTS
OFFSHORE SUBSEA
In addition to owning and operating three vessels within the offshore subsea segment, the company
owns a 58 % stake in the subsea contractor Technocean AS. The vessels are primarily used for
inspection, maintenance and repair of subsea installations.
st st
Key figures (in NOK million) 1 quarter 2009 1 quarter 2008
Operating income 100.8 70.0
EBITDA 17.8 13.7
EBIT -3.5 1.5
Employment rate, charter contracts (in %) 67% 100%
Employment rate, Technocean (in %) 76% 32%
During the first quarter 2009 Technocean has employed the vessel ”Polar Prince” in Congo, West
Africa, providing IMR services for Total. This commission will continue into to second quarter 2009. As
of August 2009, the ”Polar Prince” will be employed for subsea operations for Subocean, a company
that provides subsea services for offshore wind-farm development projects. The contract duration is
two years, with a charterer’s option to extend the contract for an additional three years. Technocean,
which also includes the company Scan Mudring, is a contractor for the oil companies with a growth
strategy within subsea niches involving challenging operational conditions, including also cable laying
operations and other subsea services related to the installation of wind farms. The company, which
has an organization of approximately 80 employees, is involved in onshore management, offshore
ROV operations and technically complex seabed soil removal
The “Polar Queen”, which is chartered to Acergy until 2012, has had an employment rate of 100 % in
the first quarter 2009, while the “Polarbjørn” has had an employment rate of 9 % in the same period.
However, the “Polarbjørn” is now chartered to Petromarker, thereby securing full employment in the
second quarter 2009.
In May 2008 GC Rieber Shipping entered into a 51/49 joint venture agreement with the Singapore-
based company Otto Marine to invest in four new MT design vessels at an approximate total value of
NOK 1200 million, for delivery in 2009/10. The vessels are being constructed at the Batamec Shipyard
in Indonesia, and the first vessel is expected for delivery in the third quarter 2009.
GC Rieber Shipping has a 40 % ownership stake in Bluestone, a company that specializes in core
drilling. From October 2008 to March 2009 the Bluestone vessel ”Bluestone Topaz” underwent work to
be modified and rigged for geotechnical activities (core drilling). In March/April 2009 the vessel carried
out its first core drilling commission. The result of the job was successful, and Bluestone is in the
process of generating a contract backlog. GC Rieber Shipping’s share of Bluestone’s financial result in
the first quarter 2009 amounted to a loss of NOK 4.0 million.
/ GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
MARINE SEISMIC
The segment includes Octio Group (60% stake) and marine operations of ten seismic vessels for other
owners as well as project management/building supervision for four vessels owned by PGS.
Key figures (in NOK million) 1st quarter 1st quarter
2009 2008
Operating income 26.0 25.1
EBITDA -13.9 -0.3
EBIT -29.5 -0.5
Employment rate for chartered vessels (in %) 74% 100%
Figures for first quarter 2009 are not directly comparable to the first quarter 2008. Two ship
management agreements expired mid-2008, and the ”Geo Explorer” was acquired in the third quarter
2008.
The name of the subsidiary Hexio has now changed to Octio. Octio’s operations include Octio
Geophysical, specializing in permanent monitoring of oil fields, and Octio Exploration, specializing in
geophysical surveys using the 2D (source) vessel ”Geo Explorer”. In the second quarter 2009, the
vessel is carrying out a multi-client survey in India for the oil service company GXT. A portion of the
earnings will be realized upon a possible future disposal of seismic data, and will not be booked until
such trading takes place.
ICE/RESEARCH
The group owns and operates two vessels within ice/research. The ”Ernest Shackleton” is on a
bareboat charter to the British Antarctic Survey until 2014, for operation in Antarctica from October to
May. The ”Polar Pevek” is owned through a 50/50 joint venture with Primorsk Shipping Corporation,
and is operated by the group’s ship management company in Yuzhno Sakhalinsk. The vessel is
chartered to Exxon Neftegas until 2021 and operates out of the DeKastri oil terminal, assisting tankers
carrying oil from the Sakhalin I offshore project outside eastern Russia.
Key figures (in NOK million) 1st quarter 1st quarter
2009 2008
Operating income 19.9 16.9
EBITDA 14.5 12.9
EBIT 9.5 9.0
Employment rate (in %) 100% 100%
The group’s activities in the first quarter 2009 were on a level with the corresponding quarter 2008. A
higher USD/NOK exchange rate has increased operating income and operating expenses in this
segment. In the first quarter 2009 GC Rieber Shipping acquired two crew boats to be employed in this
market segment from now on. More information regarding this is provided in the section below.
CONTRACTS AND OPERATIONS
All vessels are operating satisfactorily, without any significant technical downtime. Through its portfolio
of charter parties for vessels, the group had a contract backlog of NOK 1.456 million as at 31 March
2009, with an average contract duration of 3.7 years. The client portfolio consists of solid and well-
reputed companies. Contract coverage for the period 2009-2011 is 68 %, 63 % and 58 %,
respectively. All figures exclude charterers’ extension options.
/ GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
The ”Ernest Shackleton” is on a bareboat charter to the British Antarctic Survey until 2014, for
operation in Antarctica from October to May.
The ”Polar Pevek” (50% stake) is chartered to Exxon Neftegas until 2021 and operates out of the
DeKastri oil terminal, assisting tankers carrying oil from the Sakhalin I offshore project outside eastern
Russia. As of June 2009, GC Rieber Shipping’s two crew vessels ”Polar Piltun” and ”Polar Baikal” will
be employed in five-year charter contracts with the Sakhalin Energy Investment Company, operating
the Sakhalin II oil and gas field.
The ”Polar Queen” is chartered to Acergy until 2012, with tasks concerned with the laying of
“flexipipes”. Acergy has an option to extend the contract for an additional four years.
The ”Polarbjørn” is chartered to Petromarker until July 2009. Petromarker has an option to extend the
contract for an additional three months.
The ”Polar Prince” is chartered to the subsidiary Technocean until July 2011. The vessel is currently in
Congo, West Africa, where Technocean is performing IMR services for Total. As of August 2009
Technocean will employ the ”Polar Prince” for subsea operations for the company Subocean, a
company that provides subsea services for offshore wind-farm development projects.
The ”Geo Explorer” is a 2D (source) vessel owned and operated by GC Rieber Shipping’s subsidiary
Octio. The “Geo Explorer” is chartered to GXT until June 2009, collecting seismic data in India.
SHAREHOLDER INFORMATION
The company’s shares are listed on Oslo Børs. On 1 April 2009, the general meeting resolved to pay a
dividend of NOK 0.50 per share (a total of NOK 22 million). The meeting also authorised the board to
buy back up to 10 % of own shares at a share price ranging from NOK 15 to NOK 60. This
authorisation has not been exercised. On 21 January 2009 the company traded 45,400 of its own
shares to employees of GC Rieber Shipping at a share price of NOK 23. After this, the holding of own
shares is 179,300, the equivalent of 0.41 % of the shares in the company.
During the first quarter 2009, the group’s shares have been traded between NOK 27.00 and NOK
33.00. The last price recorded in the first quarter 2009 was NOK 32.00, which on the basis of a total of
43,588,000 outstanding shares values the group’s equity to approximately NOK 1,4 billion.
EVENTS AFTER THE END OF THE FIRST QUARTER
In April 2009, the charter contract with the subsidiary Technocean for the "Polar Prince" was extended
until July 2011, with a charterer’s option to extend up to one year. Starting August 2009, the ”Polar
Prince” will be employed by Technocean for subsea operations for the company Subocean, a small
Aberdeen based company that provides subsea services in connection with the development of
offshore wind farms. The contract between Subocean and Technocean has a value of approximately
NOK 300 million.
In mid-April the company’s credit facility of NOK 250 million with Handelsbanken was extended by two
years, expiring December 2011. As the company has not utilised the credit facility, it currently has
NOK 250 million available.
STRATEGIC DEVELOPMENT
During 2008 GC Rieber Shipping carried out several strategic investments as part of the group’s
commitment to expand the value chain in the oil service market. GC Rieber Shipping will maintain this
strategy and expects the group to benefit from this in the future. The companies are in a development
phase, however, and weak results for these businesses must be expected in the short to medium
term.
/ GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
OUTLOOK
The company’s liquidity is good, the gearing is low, and the financial risk related to a possibly long-
lasting credit crisis is considered to be limited and manageable. The group’s financial capacity may
give relative advantages over competitors and thereby strategic opportunities
In the short to medium term, the group expects the current global recession to result in a weak
development in the offshore subsea and seismic market segment, driven by lower oil prices with
corresponding cuts in exploration budgets and activities. At the beginning of the second quarter 2009
the group has short-term contracts for two of its vessels. The company’s investments in the value
chain are exposed to a reduction in activities in the oil service segment. A weak market development
has generated low earnings for the group in the first quarter 2009. Although earnings in the second
quarter are expected to improve somewhat compared to the first quarter 2009, earnings for the full
year 2009 will be considerably reduced compared to the full year 2008.
In the long term the group considers the market outlook in the offshore subsea and seismic segment
to be strong. This is driven by a continued drop in oil production with a corresponding need to increase
production on existing fields, as well as exploration and extraction of new petroleum resources.
Within the ice segment, a growing demand is expected related to increased oil extraction in Russia
and in other arctic waters. No changes are expected within the market for ice-going expeditions to
Antarctica. The group’s fleet consists of multifunctional vessels that can operate within more than one
of the group’s business areas. This flexibility is expected to remain important also in the future.
Through the times, GC Rieber Shipping has documented its ability to create value from accumulated
know-how and capacity, as well as demonstrating the values created. Successful counter-cyclical and
early cyclical investments have yielded substantial earnings in the past. The group will continue the
basic principles governing its strategy. A weaker market in the times to come is expected to represent
attractive investment opportunities. GC Rieber Shipping’s strong financial position will enable the
group to seek to exploit these opportunities.
Bergen, 13 May 2009
The board and CEO of
GC Rieber Shipping ASA
Paul-Chr. Rieber, chairman
Trygve Arnesen, vice chairman
Cecilie Astrup, member
Jan Erik Clausen, member
Inga Lise Moldestad, member
Sven Rong, CEO
/ GC RIEBER SHIPPING ASA / INTERIM REPORT FIRST QUARTER 2009
GC RIEBER SHIPPING ASA
1st Quarter 2009
Consolidated accounts
(Unaudited)
Profit & Loss Account 1Q 09 1Q 08 31.12.2008
(NOK 1000)
Charter income 121 356 86 065 485 458
Other operating income 25 343 25 923 87 592
Total income 146 699 111 988 573 050
Operating expenses (128 330) (85 754) (375 567)
Operating profit before depreciation, write-
downs and gains (losses) on sale of fixed assets 18 368 26 234 197 483
Depreciation (26 549) (16 198) (79 678)
Write-downs (11 395) 0 (14 711)
Gains (losses) on sale of fixed assets 0 0 4 327
Profit from associated companies (3 979) 0 4 304
Operating profit (23 554) 10 035 111 725
Financial income 13 372 10 527 48 347
Financial expenses (9 509) (9 530) (50 792)
Realized currency gains (losses) 245 (405) 4 466
Unrealized currency gains (losses) 12 463 8 904 7 452
Net financial income and expenses 16 571 9 496 9 473
Profit before taxes (6 984) 19 531 121 197
Taxes 4 478 3 127 55 586
PROFIT (2 506) 22 658 176 783
Minority share (859) 7 541 4 119
Profit after minority share (3 365) 30 200 180 902
Earnings and deluted earnings per share (0,06) 0,52 4,15
Statement of comprehensive income 1Q 09 1Q 08 31.12.2008
(NOK 1000)
Profit for the period (2 506) 22 658 176 783
Other comprehensive income
Foreign currency translation subsidiaries (4 442) 0 20 660
Foreign currency translation vessels (15 665) (28 768) 137 825
Foreign currency translation long term liabilities and
other cash equivalents 16 310 410 (66 523)
Changes in pension estimates 0 0 (1 260)
0
Comprehensive income for the period (6 303) (5 699) 267 485
Minority interests (859) 7 541 4 119
Comprehensive income for the period after minority share (7 163) 1 842 271 604
GC RIEBER SHIPPING ASA
1st Quarter 2009
Consolidated accounts
(Unaudited)
Balance Sheet 31.03.2009 31.03.2008 31.12.2008
(NOK 1000)
ASSETS
FIXED ASSETS
Rights, patents etc. 13 250 0 14 300
Deferred tax asset 51 598 11 354 54 932
Goodwill 99 454 68 959 100 164
Vessels 1 144 954 815 049 1 124 338
Newbuilding contracts 309 485 23 501 261 472
Machinery and equipment 65 617 53 239 67 971
Financial fixed assets 44 433 7 178 40 777
Total fixed assets 1 728 791 979 280 1 663 955
CURRENT ASSETS
Inventories 11 586 3 456 8 364
Receivables 289 107 151 957 259 217
Quoted financial investments 169 391 274 949 162 052
Cash and bank deposits 445 799 848 486 580 702
Total current assets 915 883 1 278 848 1 010 335
Total assets 2 644 675 2 258 128 2 674 290
EQUITY AND LIABILITIES
EQUITY
Restricted equity 97 941 97 860 97 860
Retained earnings 1 399 947 1 338 614 1 409 440
Total equity 1 497 889 1 436 473 1 507 300
LIABILITIES
Provision for liabilities 117 556 166 507 115 987
Other long-term liabilities 668 797 435 788 713 210
Current liabilities 360 433 219 360 337 793
Total liabilities 1 146 786 821 655 1 166 990
Total equity and liabilities 2 644 675 2 258 128 2 674 290
GC RIEBER SHIPPING ASA
Notes 1st Quarter 2009
Consolidated accounts
(Unaudited)
The GC Rieber Shipping group uses the Norwegian krone (NOK) as its presentation currency. Several of the subsidiaries have
US dollar (USD) as their functional currency, which means that the accounting standard IAS 21 applies. Any change in the
USD/NOK exchange rate affects the company’s equity and profit, as the group’s debt is denominated mainly in USD, and most
USD/NOK exchange rate on the balance sheet date. Where subsidiaries have USD as their functional currency, translation
differences arising in its vessels are valued in USD and translated at the respect of vessels and debt are recognized directly in
equity. Translation differences also arise in respect of subsidiaries that have the USD as their functional currency, and hold
liquid assets in NOK. These holdings are translated into USD at the exchange rate on the balance sheet date, and the translation
differences in profit as unrealized currency gains/losses.
Cash Flow Statement 1Q 09 1Q 08 2008
(NOK 1000)
Cash flow from operating activities 26 674 22 656 141 316
Cash flow from investment activities (147 772) (66 487) (518 348)
Cash flow from financing activities (6 466) 27 855 (19 627)
Net change in liquidity (127 564) (15 976) (396 659)
Liquidity at beginning of period 742 753 1 139 411 1 139 411
Liquidity at end of period 615 190 1 123 435 742 753
Equity Statement 31.03.2009 31.03.2008 31.12.2008
(NOK 1000)
Equity at 01.01. 1 507 300 1 441 868 1 441 868
Comprehensive income (6 303) (5 699) 267 485
Payment of equity 0 0 16 049
Goodwill 0 0 43 121
Sale of own shares 997 304 304
Dividends to the share holders 0 0 (261 528)
Equity at end of period 1 497 889 1 436 473 1 507 300
Segment Reporting 1Q 09 1Q 08 31.12.2008
(NOK 1000)
Ice/research 19 864 16 861 61 290
Offshore subsea 100 795 69 993 405 382
Seismic 26 061 25 134 106 378
Operating income 146 720 111 988 573 050
Discontinued operation 0 0 0
Operating income from continuing operations 146 720 111 988 573 050
Ice/research 14 541 12 853 44 154
Offshore subsea 17 785 13 710 133 778
Seismic (13 928) (330) 19 550
Operating profit before depreciation, write-
downs and gains (losses) on sale of fixed assets 18 398 26 233 197 482
Ice/research 9 472 9 044 27 230
Offshore subsea (3 512) 1 451 80 526
Seismic (29 515) (459) 3 968
Operating profit (23 554) 10 036 111 725
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