Magnora ASA – Third quarter 2018 results

Lysaker, November 27, 2018, Main events from Magnora’s third quarter 2018:

  • On June 07, 2018 Magnora ASA (former Sevan Marine ASA) (the “Company” or “Magnora”) entered into an agreement to sell its intellectual property, shares in HiLoad LNG AS and to transfer certain other assets and obligations, including employees, to Sembcorp Marine Integrated Yard Pte Ltd (“SCM”). The transaction was completed on September 4, 2018, and the Company received the agreed cash consideration of USD 39 million. The Company retains its net cash position, the Dana Western Isles license agreement and the financial benefit of the Shell Penguins license agreement.

 

  • Following the transaction with SCM, the shareholders approved at the extraordinary general meeting held on October 12, 2018 to change the Company’s name from Sevan Marine ASA to Magnora ASA.

 

  • In accordance with IFRS accounting standards, the remaining Magnora business is reported as continued operations while the disposed business is reported as discontinued operations in this report.

 

  • Adjusted EBITDA from continued operations, excluding one-off items, was NOK 9.6 million (NOK 11.4 million), a decrease of NOK 1.8 million versus the second quarter. The main driver for the decrease was a reduction in the Dana royalty revenue of NOK 1.2 million.

 

  • Magnora is entitled to USD 0.5 per barrel produced and offloaded from the Dana Western Isles FPSO. The related revenue for Q3 2018 was NOK 13.8 million (NOK 15.0 million) in continued operations.

 

  • Operating costs from continued operation, including one-off items, increased by NOK 2.5 million compared to the second quarter 2018 to NOK 12.5 million. The main driver for the increase was related to the termination of the Share Incentive Program, reported as a one-off item. Excluding one-off items, operating costs in the quarter increased by NOK 0.8 million to NOK 4.5 million (NOK 3.6 million). The increase was mainly due to costs related to the liquidation of Magnora’s two Asia subsidiaries, Sevan Asia Pte Ltd and Sevan Shanghai Co Ltd.

 

  • On July 06, 2018, Teekay and a group of shareholders entered into an agreement whereby Teekay agreed to offer its 43.5 percent shareholding in Magnora to all other shareholders in Magnora on a pro rata basis for a price of NOK 10 per share, subject to adjustment for any distributions from Magnora until completion of the offer (the “Teekay Offer”). The Company agreed with Teekay to defer all distributions to its shareholders until the earlier of (i) 1 December 2018 or (ii) the completion of the Teekay Offer. Upon completion of the Teekay Offer, Magnora has agreed to withdraw the lawsuit against Logitel Offshore Pte Ltd. and the parties have agreed not to bring or pursue any other claims against each other and their affiliates in relation to activities prior to July 06, 2018. The completion of the Teekay Offer was subject to the following key conditions: (i) required corporate approvals; (ii) closing of the SCM transaction; (iii) the subscription of all Teekay’s shares in Magnora; and (iv) regulatory approvals.

 

  • The Teekay Offer expired on November 9, 2018 and the Teekay Offer was completed on 12 November 2018. Settlement and delivery of the shares was completed on November 19, 2018.

 

  • At the annual general meeting held on May 24, 2018, shareholders approved a share capital reduction and return of NOK 0.50 per share to shareholders. In addition, at the extraordinary general meeting held on July 06, 2018, shareholders approved a further share capital reduction and return of NOK 2 per share to shareholders. At the extraordinary general meeting held on October 12, 2018 Magnora also agreed to pay an interim dividend of NOK 6.0 per share. On November 13, 2018, following agreement with Teekay, the above distributions totalling NOK 447 159 492 or NOK 8.5 per share were paid to shareholders.

 

  • On November 12, 2018, Erling Øverland, chairman of the board and Astrid Jørgenvåg, member of the board, announced that they will resign from the board of directors of the Company at the publication of the Company’s Q3 results. The nomination committee has started its work and Magnora expects to call for an extraordinary general meeting in the near future. Torstein Sanness (acting chairman), Hilde Ådland and Kathryn Baker will comprise the board of directors until an extraordinary general meeting is held.

 

  • Following the completion of the Teekay Offer, change in shareholder structure and subsequent election of a new board of directors, Magnora intends to make distributions to shareholders on a timely and regular basis to the extent legally and practically possible. Magnora will also actively seek to release the remaining value in the continued operations via a review of strategic options.

 

“Q3 was a busy quarter. We finalized the Sembcorp transaction, made substantial distributions to shareholders and completed the Teekay Offer. The company has now resolved its material legacy issues while providing shareholders with a cash generating, stock exchange listed platform for future growth.”, says Reese McNeel, CEO of Magnora.

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Reese McNeel CEO will today at 10:00 CET (Oslo time) host a conference call for investors, analysts and other interested parties.

A Q&A session will follow the presentation and information on how to submit questions to management will be given at the beginning of the Q&A session. To participate to the management presentation of the results, please dial in 5-10 minutes prior to the start time using the numbers and confirmation code below.

Call in numbers:
Norway: +47 2100 2610
International dial in: +44 330 336 9105

The participants will be asked for their name, company and confirmation code. The Magnora confirmation code is: 7351827

Presentation material that will be used during the call is attached, and also available at www.magnoraasa.com. The presentation will be in English.

Magnora third quarter report

Magnora third quarter presentation

For more information please contact:
Reese McNeel, CEO, Magnora ASA
reese.mcneel@magnoraasa.com
+47 415 08 186

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The information in this announcement is subject to the disclosure requirements of the Norwegian Securities Trading Act section 5-12 and/or the Oslo Børs – Continuing Obligations.