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UPDATE 2-Prosafe sees growth in deepwater after Q2 jump

Published 08/26/2010, 05:55 AM

* Q2 EBIT up 70 pct to $79.7 mln vs $77 mln avg poll fcast

* Sees growth in deepwater accommodation rig market

* Analyst: Gulf spill could boost Prosafe in long term

* Karl Ronny Klungtvedt named as CEO from Oct. 1

(Adds details, quotes)

By Walter Gibbs and Camilla Knudsen

OSLO, Aug 26 (Reuters) - Oslo-listed offshore services group Prosafe SE posted a jump in second-quarter operating profit on Thursday on strong demand for accommodation rigs, especially in deep waters.

Operating profit rose to $79.7 million from $47 million a year earlier, ahead of the average forecast of $77 million in a Reuters poll of 11 banks and brokers.

Shares in Prosafe were up 2.17 percent at 0852 GMT against a 0.72 percent rise for Oslo's benchmark index.

Prosafe said demand for its semi-submersible accommodation rigs, or "flotels", remained positive off Mexico despite the months-long oil leak from BP's Deepwater Horizon rig in U.S. waters over the summer.

"Prosafe currently has five rigs operating in Mexico, and we expect stable development going forward," the company said, referring to its contracts in Pemex's Cantarell field.

Analysts said they expected Prosafe would suffer little from the suspension of drilling in American waters, where the company has no business for now.

"For this quarter and probably the next quarter there won't be any noticeable impact," said Bjoern Thoresen of First Securities.

"But more thematically and longer term, it could be that the accident leads to increased focus on maintenance of offshore installations, which would benefit Prosafe."

Prosafe's flotels, some of which can house up to 812 workers, are often deployed by oil companies undertaking major modifications to their installations.

Executive Vice President Karl Ronny Klungtvedt, who will replace Arne Austreid as CEO on Oct. 1, said the quarterly results were Prosafe's best ever. He said deepwater demand would remain a strong focus for the company.

Klungtvedt said Brazil represented "the clearest opportunity we see in terms of volume of work" in the future.

Prosafe is in competition there for two accommodation contracts with Petrobras, he said. Prosafe currently has no rigs off Brazil.

In the UK, Norway and Denmark, where Prosafe has contracts for five rigs, the company said it expected continued demand stemming from efforts to improve safety and extend field life.

"Increased recovery and tie-ins of satellite fields to existing installations have extended the lifetime for many fields in the North Sea," the company said.

"Therefore, we foresee a good outlook for modification and maintenance projects over the coming years."

The company's net profit was $69.7 million, up from $43.1 million a year ago, giving earnings per share of 31 cents, 3 cents higher than analysts had forecast.

Prosafe is listed on the Oslo bourse, has its headquarters in Singapore and a parent company in Cyprus. (Editing by Michael Shields and Will Waterman)

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