earnings 2t 2012 english vfinal - osx
TRANSCRIPT
1
Earnings Release
OSX – Results Related to the Second Quarter of 2012
Rio de Janeiro, July 26, 2012 – OSX Brasil S.A. (“OSX”; “Company”; BOVESPA: OSXB3) announces today
its results for the second quarter of 2012 (2Q12). The financial and operating information contained below
is presented on a consolidated bases in accordance with the International Financial Reporting Standards
(“IFRS”) issued by the International Accounting Standards Board – IASB.
Message from the Management
“During this quarter, we moved forward in OSX’s main lines of action: construction of UCN Açu, construction of OSX’s and its clients’ offshore fleet, beginning of the Professional Training Program in Shipbuilding carried out jointly by ITN and SENAI-FIRJAN, operation of OSX-1, receipt of ISO 9001, ISO 14001 and OHSAS 18001 certifications for the management system of OSX Serviços, contract with BNDES and CEF for the R$ 2.7 billion financing from FMM, and initiatives to expand our client base. In this sense, we are proud of the recent announcement from Petrobras stating that it has approved OSX for the integration of FPSOs which will be used for the production of Brazilian pre-salt oil,” said Carlos Bellot, Chief Executive Officer of OSX.
Highlights of the second quarter of 2012 and subsequent events:
� EBITDA of R$36.5 million in 1H12
� R$2.7 billion financing from FMM (Merchant Marine Fund) for its Açu Shipbuilding Unit (UCN
Açu) with BNDES and CEF as lending agents
� Production of the first million barrels reached on FPSO OSX-1 for client OGX, with high operating efficiency of 98.5% on average in 2Q12
� Granting of ISO 9001, ISO 14001 and OHSAS 18001 certifications by BSI Brasil, a subsidiary of the British Standards Institution (BSI) for the Integrated Management Systemof OSX Serviços, which is the operator of FPSO OSX-1
� Beginning of classes of the professional training program in shipbuilding at ITN – Institute of Naval Technology (Instituto Tecnológico Naval) carried out in partnership with SENAI/FIRJAN
� Announcement from Petrobras informing that it selected OSX Construção Naval to be contrated for the integration of Replicable FPSOs
2
Earnings Release
OSX BUSINESS UNITS
OSX SHIPBUILDING
The construction of the Açu Shipbuilding Unit (“UCN Açu”) in the Açu Superport Industrial Complex in São
João da Barra, located in northern Rio de Janeiro State, has been progressing according to schedule since
construction began in July of 2011, with partial operation beginning in the first quarter of 2013 and
completion estimated for the second quarter of 2014, according to the anticipated timeline below:
Main achievements in the construction of UCN Açu in 2Q12:
� Advances on the canal dredging, with around 3,000 meters already dredged
� Conclusion of earthworks
� Equipment and systems contracted: steel plate cutting machines, pipe cutting machines, steel
plate pre-treatment system, gantry cranes and overhead cranes, panel lines, shot blasting
machines and press and benders
� Contract for supply and maintenance of the 345kV substation and connection with the transmission
line
� Contract of the Almagesto system, the focus of which is the instrumentalization of the key
shipbuilding processes and systems
UCN SECTIONS READY 2012 2013 2014
SLOT 1 4th QUARTER - -
SLOT 2 - 1st QUARTER -
BEGINNING OF OPERATION OF NORTH AREA - 1st QUARTER -
MODULE ASSEMBLY AREA - 2nd QUARTER -
INDUSTRIAL FACILITIES - 2nd QUARTER -
SLOT 3 - 3rd QUARTER
SLOT 4 - 3rd QUARTER -
DRY DOCK RETRO AREA - 4th QUARTER -
PRE-ASSEMBLY AREA - 4th QUARTER -
SLOT 5 - 4th QUARTER -
COMPLETION OF CONSTRUCTION - - 2nd QUARTER
3
Earnings Release
Aerial view of the construction of UCN Açu’s Industrial Area (June 29, 2012)
Evolution of canal construction
October, 2011 January, 2012 April, 2012 June, 2012
4
Earnings Release
Aerial view of the Canal in July, 2012
Actual sizes of the Canal and Breakwater (July 19, 2012) Aerial view of the canal (July 19,2012)
Breakwater of the Canal
South: 236 meters North: 408 meters
New buildings
Foundations of the building for plate cutting Columns for the steel plate preparation building
5
Earnings Release
Technological Partnership with Hyundai
UCN Açu is a 5th generation shipyard, built and to be operated with technology from our Korean partner
Hyundai Heavy Industries (“HHI”), the world leader in naval construction
For the past almost three years of strategic partnership between OSX and Hyundai, HHI has contributed
with its 40 years of experience in naval construction, aiming to provide OSX with Asian levels of
productivity, with the implementation of efficient processes in the construction and operation of UCN Açu.
In that sense, the company currently counts on eight Hyundai employees in Rio de Janeiro, assisting on
technical inquiries regarding construction design of UCN Açu, as well as in the interface with the HHI team
in Korea, which is dedicated to the conclusion of operating manuals and the preparation for the UCN Açu’s
team training in the HHI’s Korean shipyard.
OSX’s partnership with HHI also includes adopting engineering projects for maritime units already built by
Hyundai in its Korean facilities (as-built design) and the technical assistance from Hyundai during
construction of these units.
This quarter, we contracted additional equipment for UCN Açu with Hyundai, such as the Steel Plate Pre-
treatment System to protect metal surfaces during manufacturing; press & benders to manufacture pipes
and curved surfaces; and the Panel Line to manufacture components (panels) that will form the blocks for
vessel hulls.
HHI Senior Executives on a work-visit to Açu Shipbuilding Unit
6
Earnings Release
ITN – Institute of Naval Technology (Instituto Tecnológico Naval)
In this quarter, we started the first classes of the Professional Training Program in Shipbuilding that ITN –
Institute of Naval Technology (Instituto Tecnológico Naval) is conducting in partnership with
SENAI/FIRJAN, the most important entity for industrial professional training in Latin America.
Of the 3,100 professionals selected for training until 2013, 880 students have begun the 23 free courses
offered in Metal-Mechanics, Electricity, Metallurgy, Automation/Instrumentation, Oil, Automotive
Operation, Construction and Management in São João da Barra and Campos de Goytacazes,. The courses
are free and selected candidates receive a scholarship.
For this Training Program, approximately 20,000 applications were received and approximately 15,000
candidates performed selection tests and approximately 3,100 candidates were selected for the first phase
of the Program.
In addition to these training initiatives, the ITN plans to act in partnership with research institutions in the
technological development of the shipbuilding and offshore operation sectors in Brazil.
First day of class Mobile unit for practical welding classes
First welding class First electrical class
7
Earnings Release
OSX’s Order Book
Currently OSX is managing an order book of 21 units destined for the production of oil and gas in Brazil
which are: 5 FPSOs and 4WHPs for client OGX, 1 PLSV for client Sapura and 11 medium-range tankers for
client Kingfish. During the quarter, OSX maintained its client base expansion and diversification strategy.
In general terms, construction of this fleet of offshore units is within schedule. In this quarter, OSX’s
updated order book is as detailed below:
*delivery at the shipyard (ex-installation)
FPSO: Floating Production Storage Offloading
WHP: Wellhead Platform PLSV: Pipe Laying Support Vessel MR: Medium Range Tanker
Integration of 2 “Replicable” FPSOs for Petrobras: As per Petróleo Brasileiro S.A. – Petrobras’
announcement on 19.07.2012, Petrobras, together with its partners by means of its affiliate Tupi-BV,
approved the contract signature for the construction and integration of replicable FPSO type platforms,
informing that OSX Construção Naval S.A. is among the companies to be contracted for such services and
that the contracts will be signed in the next days. The announcement also mentioned that these platforms
are being built in Brazil for the development of pre-salt projects in the Santos Basin.
On 13.07.2012, OSX Brasil S.A. Board of Directors approved the contract signature with Tupi BV, on
behalf of OSX Construção Naval S.A. (controlled by OSX Brasil S.A.), in partnership with Mendes Junior
Trading e Engenharia S.A., for the construction and integration of 2 Replicable FPSOs with the option of a
third Replicable FPSO, to be built at Açu Shipbuilding Unit.
CLIENT UNIT CAPACITYESTIMATED PRICE
(US$ MM)DELIVERY*
CONSTRUCTION
LOCATION
OSX LEASING
& SERVICES
OGX FPSO OSX-1 80K bopd 610 OK SAMSUNG, KOREA
OGX FPSO OSX-2 100K bopd 775 3Q 2013 KEPPEL, SINGAPORE
OGX FPSO OSX-3 100K bopd 800 3Q 2013 JURONG, SINGAPORE
OGX FPSO OSX-4 OSX, BRAZIL
OGX FPSO OSX-5 OSX, BRAZIL
OGX WHP-1 30 wells 400-450 2Q 2014 TECHINT, BRAZIL
OGX WHP-2 30 wells 400-450 4Q 2013 TECHINT, BRAZIL
OGX WHP-3 OSX, BRAZIL
OGX WHP-4 OSX, BRAZIL
SAPURA PLSV N/A 263 4Q2014 OSX, BRAZIL
KINGFISH 11 MRs N/A 732 2Q 2015- 4Q 2017 OSX, BRAZIL
Expecting Technical Specifications from Client
Expecting Technical Specifications from Client
Expecting Technical Specifications from Client
Expecting Technical Specifications from Client
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8
Earnings Release
OSX LEASING
FPSO OSX-1
� Built by Samsung in Korea and customized in Singapore at the Keppel shipyard
� Chartered by OGX Petróleo e Gás Participações S.A. for a 20-year period
� Operated by OSX Serviços Operacionais Ltda.
� First oil produced on January 31, 2012 for client OGX
� Offloading operations completed (pumping operation of oil stored in the tanks to a shuttle vessel)
FPSO OSX-1 in operation
9
Earnings Release
FPSO OSX-2
� Turn-key Engineering, Procurement, Construction and Installation (EPCI) agreement with Single
Buoy Moorings, Inc. (SBM).
� Agreement value: Approximately US$800 million
� Construction of the vessel, turret and topside modules in progress at the Keppel shipyard in
Singapore
� Main equipment purchase orders have been placed
� Syndicated loan in the amount of US$850 million, with tenor of 12 years and interest rate of LIBOR
+ 4.41 p.a.
� Physical progress: approximately 56%
� Estimated delivery: 3Q13
Main deck undergoing conversion/construction Moonpool lift onboard
Construction of the turret Gas compression module
10
Earnings Release
FPSO OSX-3
� Turn-key Engineering, Procurement, Construction and Installation (EPCI) agreement with Modec
� Agreement value: approximately US$800 million
� Conversion and construction of the hull in progress at the Jurong shipyard in Singapore, with the
final dry docking of the vessel underway
� Main equipment purchase orders have been placed
� Issuance of US$500 million in Senior Secured Bonds (“Bonds") with final maturity in March of 2015
and interest rate of 9.25% p.a.
� Physical progress: approximately 52%
� Estimated delivery of OSX-3: 3Q13
E-HOUSE Pull-in deck of the turret
11
Earnings Release
FPSOs OSX-4 and OSX-5
The “Gemini Star” and “Suhail Star” Very Large Crude Carriers (VLCCs) will be used in the conversion of
the hulls of FPSOs OSX-4 and OSX-5. The Concept Design, Front End Engineering Development (FEED),
and Detailed Design for the Process Plants are following the OSX FLEX Concept. As informed in the
previously mentioned order book, OSX awaits technical specifications from its client OGX regarding
characteristics of these units.
Regarding FPSO OSX-4:
� Basic engineering project concluded
� Generator’s and water injection modules with purchase orders placed
� Remaining main equipment’s and services with purchase orders under negotiation
� Hull survey completed
Hull designated for FPSO OSX-4 Hull designated for FPSO OSX-5
12
Earnings Release
WHP-1 and WHP-2:
� Engineering, Procurement, Construction and Installation (EPCI) agreement with Techint Engenharia
e Construção S.A. for WHP-1 and WHP-2 to be chartered and operated by subsidiaries of OSX to its
client OGX in the Campos Basin. WHP-1 will be connected to FPSO OSX-2 and WHP-2 to FPSO-
OSX-3
� Development of the Basic Project for the jacket and topside by TECHNIP, subcontracted by
TECHINT
� Acquisition from TTS/CAMERON of a Drilling Package Unit (DPU) for each of the Units. Project
underway.
Ceremony of First Welding of WHP 1 and 2 at the Techint site in Pontal do Paraná
WHP-3 and WHP-4: Both WHPs were ordered by client OGX to be chartered and operated by OSX
subsidiaries. WHP-3 will be connected to FPSO OSX-4 and WHP-3 to FPSO-OSX-5. As informed in the
previously mentioned order book, OSX awaits technical specifications from its client OGX regarding
characteristics of these units.
13
Earnings Release
OSX SERVICES:
In July 2012, OSX Serviços Operacionais Ltda., operator of FPSO OSX-1 and the future units of OSX’s
fleet, received Registration Certificates issued by BSI Brasil, affiliated to The British Standards Institution,
certifying that OSX Serviços Operacionais operates:
� Quality Management System in accordance with ISO 9001:2008 requisites
� Environmental Management System in accordance with the requisites of norm ISO 14001:2004
� Safety and Occupational Health Management System in accordance with the BS OHSAS
18001:2007 requisites.
FPSO OSX-1
� Average operating efficiency of 98.5% in 2Q12
� Offloading operations of FPSO OSX-1 to shuttle vessels carried out
� Connection and beginning of operations of OGX's second production well (OGX-68HP)
� First million barrels of production reached
FPSO OSX-1 control room
FPSOs OSX-2 and OSX-3
� Approximately 100 new employees hired to be part of the team that will operate FPSO OSX-2 &
OSX-3
� Beginning of training of this new team for offshore work, distributed in four groups of 24 students
for theoretical and practical classes comprising 4 modules: basic, introductory, specific and
mandatory
14
Earnings Release
Social and Environmental Responsibility
During the last months, in addition to the progress in the implementation of 42 social and environmental
plans, programs and sub-programs in compliance with the conditions of UCN Açu’s Installation License,
OSX:
� Reached the milestone of more than 2 million man-hours of risk exposure at UCN Açu without any
accidents resulting in leave of absence.
� Trained its employees in HSE and Sustainability on the Equator Principles and IFC Environmental
Standards with the aim of advising the implications of the application of the requisites in OSX
projects and the EBX Group projects in general.
� Initiated the Integrated Environmental Education Program, in partnership with LLX, reaching 15
schools in the UCN Açu (São João da Barra) region and involving approximately 1,500 students,
teachers, and employees, in addition to neighboring communities of each school.
� Executed the Açu Traffic Monitoring Program (São João da Barra) in partnership with LLX, by
carrying out the Daily Safety, Environment and Health Dialogue (DDSMS), presentations,
education at schools and punitive (road and safety) blitzes.
� Developed an Action Plan for the elaboration of OSX’s first Sustainability Report (planned for
2013), in accordance with GRI (Global Reporting Initiative) indicators in line with the GRI Report
Committee created by EBX with OSX’s participation.
� Obtained the previously mentioned management system certifications for OSX Serviços
Operacionais pursuant to Norms ISO 9001 (Quality), ISO 14001 (Environment) and OHSAS 18001
(Health and Safety) standards, after the audit carried out by BSI in which there was full
compliance
� Support to the Açu Biodiversity Conservation Program launched by LLX in May of 2012, focusing on
the conservation of restinga ecosystems and of lagoon and marine environments, including by
means of RPPN Caruara (Private Natural Heritage Reserve), the largest private restinga
conservation unit in Brazil, the constitution of which was recognized in July.
15
Earnings Release
FINANCIAL PERFORMANCE
The Management monitors the financial results of the business units separately for decision-making
purposes, as well as for allocation of funds and performance evaluation. The table below shows the
performance of each segment in 1H12:
Shipbuilding: This business unit focuses on construction, assembly and integration of Exploration and
Production (E&P) units. In 1H12, it had a negative EBITDA of R$32.2 million due to its current stage of
implementation in the Açu Superport. G&A was up R$11.1 million in 1H12 as compared to 1H11, due
mainly to expenses with new personnel, training, licensing and expenses related to infrastructure such as
rent, technology and communication.
Leasing: This business unit concentrates the E&P units leased to OSX’s clients in the oil and gas sector by
means of long-term charter agreements. It had positive EBITDA of R$87.3 million as a result of the start
of operation of FPSO OSX-1 under the bare boat charter agreement.
O&M (Operation and Maintenance) Services: This business unit is responsible for operating the E&P
units. It had positive EBITDA of R$5.8 million, up R$1.3 million in 1H12 as compared to the same period
of the previous year, as a result of the current operating stage of FPSO OSX-1. Consequently, the
increase in revenue and costs are related to the vessel’s operation, such as crew, spare parts and
mobilization.
Corporate: This segment includes the information related to OSX Brasil S.A., which is integrated with the
Company's other business units. It had negative EBITDA of R$24.4 million in 1H12. The R$4.8 million
increase in G&A is due to the increase of expenses related to infrastructure such as rent, technology and
communication.
1H12 1H11 1H12 1H11 1H12 1H11 1H12 1H11 1H12 1H11
Gross Revenue - - 103.6 - 104.3 39.5 - - 207.9 39.5 Taxes - - - - (8.3) (4.7) - - (8.3) (4.7) Net Revenue - - 103.6 - 96.0 34.8 - - 199.6 34.8
Cost of goods and/or services - - (13.4) - (82.3) (25.1) - - (95.7) (25.1) Operating Income - - 90.2 - 13.7 9.7 - - 103.9 9.7 G&A (32.2) (21.1) (2.9) (0.5) (7.9) (5.2) (24.4) (19.6) (67.4) (46.4) EBITDA (32.2) (21.1) 87.3 (0.5) 5.8 4.5 (24.4) (19.6) 36.5 (36.7)
Shipbuilding Leasing O&M Services Corporate Consolidated
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Earnings Release
Net Financial Income
Financial Revenue: The R$77.9 million decrease in 1H12 as compared to 1H11 is due to the redemption
of investments in order to honor commitments undertaken by the Company in its Business Plan.
Financial Expenses: The increase in financial expenses refers mostly to the interest on the financing of
FPSO OSX-1. This interest was previously capitalized to FPSO OSX-1 and, with commencement of its
operation, is now recognized in the Company’s financial income.
Derivatives: The effect of the derivatives position on the Company’s income showed a decrease from
1H11 to 1H12, from negative R$69,225 to negative R$7,038, respectively. This is basically due to the
decrease in financial volume of the Company’s derivative transactions in 2012. The decrease in financial
volume occurred because, although the Company has dollar-indexed liabilities, the cash required for
compliance with the short-term obligations was already transferred to subsidiaries abroad and the
Company expects a dollar-indexed debt in relation to funding of the projects, which made it unnecessary
to enter into hedge transactions for protection of the portion of the cash allocated to implementation of
our Business Plan. In 2012, the Company focused its hedge transactions mainly in agreements that had
already been executed and are subject to foreign exchange exposure.
CAPEX
The Company’s main investments in property, plant and equipment (CAPEX) in 2012 refer to the offshore
units that will be chartered to OGX. Taking into account the construction costs, OSX’s main investments in
2012 were:
FPSO OSX-2: in 1H12, US$151.1 million were invested, related mostly to the agreement with SBM
Offshore. This asset is recorded in the balance sheet at US$592.2 million (as of June 30, 2012).
Financial Income (in R$ million) 1H12 1H11 Variation
Financial revenue 32.0 109.9 (77.9)
Financial expense (31.1) (1.7) (29.4)
Derivatives (7.0) (69.2) 62.2
Exchange rate variation (1.0) (1.6) 0.6
Total (7.1) 37.4 (44.5)
17
Earnings Release
FPSO OSX-3: in 1H12, US$268.3 million were invested, related mostly to the payment of seven
installments under the EPCI agreement with Modec Inc. This asset is recorded in the balance sheet at
US$467.6 million (as of June 30, 2012).
FPSOs OSX-4 and OSX-5: in 1H12, US$21.6 million were invested, related mostly to the agreements
signed with the CKE Consortium (Chemtech, Kromav and Exactum), Wärtsilä Finland Oy (generation
system for FPSO OSX-4) and Siemens Ltda. These assets are recorded in the balance sheet at US$100.5
million (as of June 30, 2012).
WHPs-1 &2: in 1H12, US$175.3 million were invested in the engineering projects and initial work related
to the two wellhead platforms and related costs under agreements with Techint, Technip and TTS Energy.
The platforms are recorded in the balance sheet at a total amount of US$219.1 million (as of June 30,
2012).
Cash and Cash Equivalents The consolidated cash position of the Company and its subsidiaries on June 30, 2012 was R$1.9 billion,
compared to R$1.4 billion on March 31, 2012.
Marketable securities consist mainly of funds invested in an exclusive mutual fund managed by Bradesco
Asset Management and backed by federal government bonds and private bonds (Debentures and
Certificates of Deposit – “CDs”) issued by first rate financial institutions, all of which have post-fixed rates
and average yields equal to 102.3% of the DI CETIP (“CDI”).
The Company's policy is to eliminate the cash risk related to foreign exchange rate variation. Therefore,
although the Company had dollar-indexed obligations as of June 30, 2012, there is no net exposure to
this currency since the cash required to meet material obligations has already been transferred to
subsidiaries abroad. Furthermore, new dollar-indexed debt is expected in relation to project funding. The
operating revenue, which is dollar-indexed, represents a natural hedge of the amortization schedule.
With the purpose of protecting the Company against exposure to the Euro resulting from a procurement
order with supplier Wartsilla for supply of the main motor generation system for FPSO OSX-4 in the
amount of €43.2 million, in February of 2012 the Company hedged this exposure. On June 30, 2012, the
Company had a hedge position of €36.72 million (equivalent to US$48.1 million).
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Earnings Release
Debt
On June 30, 2012, the Company’s consolidated indebtedness was R$4.316 billion, with R$880.5 million
relative to the shipyard, R$734.7 million relative to FPSO OSX-1, R$1.383 billion in a loan relative to OSX-
2 and R$1.013 billion relative to FPSO OSX-3.
FPSO OSX-1: On November 30, 2011, the Company received a disbursement of US$100.00 million that
refers to the second and last installment of the long-term financing obtained for FPSO OSX-1 in the total
amount of US$420.00 million (term of 8.5 years at LIBOR + 4.25% p.a.) from a bank syndicate led by
DVB Group Merchant Bank (Asia) Ltd. The first disbursement, in the amount of US$320.0 million,
occurred on November 30, 2012. To protect against interest rate fluctuation risks (3-month LIBOR)
associated with the amortization schedule of the long-term financing of FPSO OSX-1, the Company
contracted a hedge operation with HSBC and fixed all the LIBOR exposure at an average rate of 1.91%
p.a. In March of 2012, a US$50 million loan was taken out with Credit Suisse First Boston, which is
guaranteed by the dividend flow of OSX-1 Leasing. This loan was taken out by OSX Leasing Group and
increases the leverage of the OSX-1 project.
FPSO OSX-2: In May of 2012, US$428.3 million relative to the first tranche of the long-term financing in
the total amount of US$850.0 million for FPSO OSX-2 was disbursed. The financing agreement was signed
in October of 2011 with a syndicate of international banks led by Itaú BBA, ING and Santander, with a 12
year payment term at an average rate of LIBOR + 4.41% p.a. for investment in the construction and
installation of FPSO OSX-2. The other financial institutions that comprise the syndicate are: HSBC,
Citibank, ABN Amro Bank, Banco do Brasil, NIBC and DnB. This credit line will be disbursed throughout
2012 and 2013.
FPSO OSX-3: On March 20, 2012, subsidiary OSX-3 raised US$500 million with the international issue of
Senior Secured Bonds (“Bonds”), the net revenues of which will be used in the construction of FPSO OSX-
3.
The financial terms of the bonds provide for financial maturity in March of 2015 and interest rate of 9.25%
p.a. payable quarterly. OSX-3 will have a call option exercisable between 15 and 24 months from the date
of issuance at 103% of the face value or between 24 and 36 months at 102% of the face value. Pareto
Securities acted as global coordinator, Joint Lead Manager and Bookrunner in the issuance of the bonds,
with DNB Markets as Joint Lead Manager and Bookrunner.
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Earnings Release
Shipbuilding Unit:
In June, 2012, OSX Construção Naval entered into contracts with lending agents BNDES – National
Development Bank and CEF - Caixa Econômica Federal for financing with resources from the FMM -
Merchant Marine Fund, in the approximate amount of R$ 1.35 billion each, totaling approximately R$ 2.7
billion. This is the most important credit line available to the Brazilian naval industry and this R$2.7 billion
financing is dedicated to the implementation of UCN Açu, the largest shipyard of the Americas.
The loan has 252-month tenure (21 years) for both Financial Institutions, with a 42/36-month grace
period for amortization of principal and 36/30-month grace period for payment of interest to BNDES and
CEF, respectively. The expected average interest rate is US$ + 3.38% p.a., paid monthly with the
amortization of principal after the grace period.
The priority funding contracted by OSX with BNDES and CEF was approved by The Board of Directors of
the Merchant Marine Fund in June 2011. On 28/12/2011 we obtained a R$427.8 million (equivalent to
US$227.96 million) bridge loan from the BNDES related to the Merchant Marine Fund (“FMM”) financing
with an 18 month tenure, with principal and interest payable upon final maturity or upon first
disbursement of the FMM financing. In April of 2012, we obtained a R$400 million bridge loan from Caixa
Econômica Federal related to the FMM financing, with an 18-month payment term, principal and interest
payable upon final maturity or the first disbursement of the FMM financing. Both bridge loans are backed
by bank guarantee letters issued by Banco Votorantim and Banco Santander, respectively.
20
Earnings Release
OSX Brasil S.A.
Income Statement 1H2012 1H2011 1Q2012 1Q2011
Revenue from sale of goods and/or services 199,628 34,843 93,965 25,350
Cost of goods and/or services sold (120,136) (25,137) (52,272) (18,737)
Gross Income 79,492 9,706 41,693 6,613
Operating revenues (expenses)
General and administrative (57,647) (43,393) (32,545) (21,941)
Expenses related to stock options granted (25,489) (32,937) (12,175) (9,436)
Implementation expenses (11,923) (3,349) (8,034) (1,472)
Other operating expenses - (25) - -
(95,059) (79,704) (52,754) (32,849)
Earnings before financial income and taxes (15,567) (69,998) (11,061) (26,236)
Financial income
Financial revenue 32,031 109,978 14,288 54,490
Financial expense (31,140) (1,678) (19,573) (1,286)
Derivatives (7,038) (69,225) (5,327) (37,430)
Exchange rate vairation, net (918) (1,640) (123) (963)
(7,065) 37,435 (10,735) 14,811
Earnings before income tax (22,632) (32,563) (21,796) (11,425)
Income tax and social contribution - current (4) (7,787) 1,660 (7,121)
Income tax and social contribution - deferred 26,533 7,506 13,820 7,597
Profit (loss) for the period 3,897 (32,844) (6,316) (10,949)
Attributed to the non-controll ing shareholders: (1,475) (116) (1,188) 94
Attributed to the controll ing shareholder: 5,372 (32,728) (5,128) (11,043)
Information in IFRS – in thousands of reais - Consolidated
Composition of Consolidated EBITDA (R$ million) 1H2012 1H2011 2Q2012 2Q2011
Net Profit 5.4 (32.7) (5.1) (11.0)
Financial income, net (7.1) 37.4 (10.7) 14.8
Income tax and social contribution 26.5 (0.3) 15.5 0.4
Expenses related to stock options granted (25.5) (32.9) (12.2) (9.4)
Depreciation and amortization (26.5) (0.3) (14.0) (0.2)
Participation of non-controll ing shareholders 1.5 0.1 1.2 (0.1)
EBITDA 36.5 (36.7) 15.1 (16.5)
21
Earnings Release
OSX Brasil S.A.
Information in IFRS – in thousands of reais - Consolidated
Assets 30/06/2012 31/12/2011
Total Assets 7,673,872 4,448,401
Current Assets 2,390,417 1,315,810 Cash and cash equivalents 1,931,255 1,034,008
Clients 160,444 84,779
Various advances 65,514 4,416
Inventory 12,119 6,208
Tax credits to recover 74,790 69,745
Prepaid expenses 72,788 43,096
Non-current assets for sale 73,507 73,504
Derivatives - 54
Non-current assets 5,283,455 3,132,591 Linked deposit 62,869 48,687
Deferred income tax and social contribution 99,820 46,195
Other accounts receivable 2,316 1,516
Property, plant and equipment 5,118,450 3,036,193
Derivative instruments -
Liabilities + Shareholders' Equity 30/06/2012 31/12/2011
Total Liabilities 7,673,872 4,448,401
Current Liabilities 1,254,902 676,601
Payroll obligations 51,610 52,075
Suppliers 102,509 340,737
Tax obligations 18,102 18,783
Loans and financing 775,112 111,864
(-) Cost in obtaining loans (2,278) (2,142)
Related parties 4,557 7,359
Advances from clients 281,213 139,385
Derivatives 24,077 8,540 Non-current Liabilities 3,579,228 1,071,493
Loans and financing 3,541,443 1,052,633
(-) cost in obtaining loans (40,992) (7,967)
Derivatives 78,777 26,827 Shareholders' Equity
Capital 2,514,994 2,514,223
(-) cost of issuing shares (81,057) (81,057)
Stock options granted 175,601 150,112
Accrued conversion adjustments 322,840 166,086
Equity valuation adjustments (65,430) (17,954)
Accrued losses (98,757) (104,129)
Attributed to the equity stake of the controll ing shareholder 2,768,191 2,627,281
Attributed to the equity stake of the non-controll ing shareholder 71,551 73,026
Total Shareholders' Equity 2,839,742 2,700,307
Balance Sheet
22
Earnings Release
Conference Call Information:
Friday, July 27 at 12 P.M. (Brasília); 11 A.M. EDT
Dial-in Brazil: +55 11 4688-6341
Toll-free USA +1 888 700-0802
Dial-in USA +1 786 924-6977
Password for connection in Portuguese: OSX
Password for connection in English: OSX
Webcast in Portuguese: www.ccall.com.br/osx/2t12.htm
Webcast in English: www.ccall.com.br/osx/2q12.htm
The conference call will be conducted in English with simultaneous translation into Portuguese.
Contact OSX
Investor Relations:
João Borges
Gustavo Trindade
+55 21 2555-9239
Media Relations:
Roberta Brandão
Simone Barros
+55 21 2555-5221
23
Earnings Release
ABOUT OSX
OSX is a Brazilian publicly held company which provides solutions for the offshore oil industry by means of integrated
operations in shipbuilding, leasing of exploration and production (E&P) units, and operation and maintenance (O&M)
services. Currently, OSX is managing a broad and diversified order book of FPSOs, fixed platforms, supply vessel´s
and medium-range tankers. The Açu Shipbuilding Complex – (“UCN Açu”), which will be the largest Shipbuilding Unit
in the Americas, is under construction since July 2011 at the Açu Superport Industrial Complex, located in the São
João da Barra Industrial District, with technology from its partner Hyundai Heavy Industries, the global leader in naval
construction. For the implementation of its projects, OSX has already obtained more than US$ 4.5 billion in funding
from the financial and capital markets via its IPO, financing and senior secured bonds in the international markets.
OSX is a part of the EBX Group, a corporate conglomerate founded and headed by Brazilian entrepreneur Eike Batista,
who has a proven track record of successfully developing new ventures in the fields of natural resources and
infrastructure, with the highest technology and sustainability standards. For more information, please visit:
www.osx.com.br/ri.
Disclaimer
This document contains statements and information about the Company that reflect the current views and/or
expectations of the Company and its management with regard to its business plan. These include all statements
containing forecasts and projections that indicate or imply future results, performance or achievements, which may
include such words at "believe," “predict,” “expect,” “contemplate,” “will probably result,” or any other words or
expressions of similar meaning. Such statements are subject to a series of risks, uncertainties and assumptions.
Readers are warned that several important factors may lead actual results to significantly diverge from the plans,
targets, expectations, estimates and intentions expressed herein. Under no circumstances shall the Company or its
directors, officers, representatives or employees to be liable to any third parties (including investors) should they
make decisions, investments or business acts based on information and statements presented herein, nor shall the
Company be liable for any indirect damages, loss of profit, or similar consequences thereof. The Company does not
indent to provide shareholders with any revised versions of the statements or analysis of differences between the
statements and actual results. Investors should thoroughly analyze OSX’s prospectus, including the risk factors
identified therein. This presentation does not contain all the necessary information for a complete investment
assessment on the Company. Investors shall produce their own assessments, including the associated risks, before
making an investment decision.