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Altera Infrastructure Reports First Quarter 2021 Results

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Altera Infrastructure L.P.
·15-min read
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ABERDEEN, United Kingdom, May 05, 2021 (GLOBE NEWSWIRE) -- Altera Infrastructure GP LLC (Altera GP), the general partner of Altera Infrastructure L.P. (Altera or the Partnership), today reported the Partnership’s results for the quarter ended March 31, 2021.

  • Revenues of $272.8 million and net income of $5.9 million, or $0.00 per common unit, in the first quarter of 2021

  • Adjusted EBITDA(1) of $120.3 million in the first quarter of 2021

The following table presents the Partnership's Consolidated Financial Summary:

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

In thousands of U.S. Dollars, unaudited

$

$

$

IFRS FINANCIAL RESULTS

Revenues

272,754

278,657

312,401

Net Income (loss)

5,901

(73,029

)

(258.932

)

Limited partners' interest in net income (loss) per common unit - basic

0.00

(0.20

)

(0.63

)

NON-IFRS FINANCIAL MEASURE:

Adjusted EBITDA (1)

120,270

142,193

163,548


(1)

Please refer to "Non-IFRS Measures" for the definition of this term and reconciliation of this non-IFRS measure as used in this release to the most directly comparable measure under IFRS.

The Partnership generated net income of $6 million for the three months ended March 31, 2021, compared to a net loss of $259 million for the three months ended March 31, 2020. The results for the recent quarter benefited mainly from the absence of a $172 million impairment loss and a decrease of $105 million in loss on derivatives, compared to the same quarter in the prior year. This was partially offset by lower revenues from the Petrojarl FPSO, and the Randgrid FSO and an absence of Voyageur FPSO revenues as a result of the unit being in lay-up.

Adjusted EBITDA was $120 million in the first quarter of 2021, compared to $164 million in the same quarter of the prior year. The decrease of $44 million mainly reflects lower economic uptime on the Petrojarl l FPSO, an absence of Voyageur FPSO revenues, lower day rates on the Rangrid FSO and an absence of revenues from two vessels in the FSO segment that were sold.

Operating Results
The commentary below compares certain results of the Partnership's operating segments on the basis of the non-IFRS measure of Adjusted EBITDA for the three months ended March 31, 2021 to the same period of the prior year.

The following table presents the Partnership's Adjusted EBITDA by segment:

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

In thousands of U.S. Dollars, unaudited

$

$

$

FPSO

52,768

72,355

79,593

Shuttle Tanker

67,194

71,823

64,867

FSO

7,405

(458

)

23,892

UMS

(1,695

)

(1,771

)

(2,606

)

Towage

(2,350

)

(744

)

(2,003

)

Corporate/Eliminations

(3,052

)

988

(195

)

Partnership Adjusted EBITDA

120,270

142,193

163,548


The Partnership's Shuttle Tanker segment generated Adjusted EBITDA of $67 million for the three months ended March 31, 2021, compared to $65 million for the three months ended March 31 2020.

The Partnership's FPSO segment generated Adjusted EBITDA of $53 million for the three months ended March 31, 2021, compared to $80 million for the three months ended March 31, 2020. The decrease of $27 million is mainly due to lower economic uptime on the Petrojarl I FPSO and the impact of the Voyageur FPSO ceasing operations under its contract in mid-2020.

The Partnership's FSO segment generated Adjusted EBITDA of $7 million for the three months ended March 31, 2021, compared to $24 million in the same period in 2020. The decrease of $17 million is mainly due to a reduction in the Randgrid FSO contract rate and the absence of contribution from the Dampier Spirit FSO and Apollo Spirit FSO, as their contracts ended in the third quarter of 2020.

The Partnership's UMS segment generated Adjusted EBITDA loss of $2 million in the most recent quarter, in line with same period in 2020.

The Partnership's Towage segment generated Adjusted EBITDA loss of $2 million in the most recent quarter, which includes revenues from freeing up a container vessel in the Suez canal. Adjusted EBITDA is in line with same period in 2020.

Liquidity Update
As at March 31, 2021 the Partnership had total liquidity of $222 million, including $25 million of undrawn lines under a revolving credit facility, representing a decrease of $14 million from the prior quarter.

Strategic updates

Delivery of Shuttle Tanker Newbuildings
In January 2021, the Partnership took delivery of the fifth LNG-fueled DP2 shuttle tanker newbuilding, the Altera Wave. The vessel has commenced operations and is trading as part of the Partnership's CoA fleet in the North Sea. The sixth LNG fueled vessel, the Altera Wind, was delivered in March 2021 and has arrived in Norway for testing, while the seventh vessel is expected to be delivered early in 2022 and to operate off the East Coast of Canada.

Financings
During the three months ended March 31, 2021, the Partnership entered into two additional unsecured revolving credit facilities with Brookfield Business Partners LP and its affiliates, which provide for total borrowings of up to $100 million and mature in February 2022.

Forward Looking Statements
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including, among others: the Partnership’s review of potential strategic initiatives, including any related asset sales, joint ventures, capital raises or other transactions; and the timing of vessel deliveries, the commencement of charter contracts and the employment of newbuilding vessels. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: alternatives and conditions to implement any strategic initiatives; delays in vessel deliveries or the commencement of charter contracts or changes in expected employment of newbuilding vessels; and other factors discussed in the Partnership’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2020. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

About Altera Infrastructure L.P.
Altera Infrastructure L.P. is a leading global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Altera has consolidated assets of approximately $4.4 billion, comprised of 51 vessels, including floating production, storage and offloading (FPSO) units, shuttle tankers (including one newbuilding), floating storage and offtake (FSO) units, long-distance towing and offshore installation vessels and a unit for maintenance and safety (UMS). The majority of Altera’s fleet is employed on medium-term, stable contracts.

Altera's preferred units trade on the New York Stock Exchange under the symbols "ALIN PR A", "ALIN PR B" and "ALIN PR E", respectively.

For Investor Relations enquiries contact:

Jan Rune Steinsland, Chief Financial Officer
Email: investor.relations@alterainfra.com
Tel: +47 97 05 25 33
Website: www.alterainfra.com


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. Dollars)

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

$

$

$

Revenues

272,754

278,657

312,401

Direct operating costs

(161,841

)

(143,896

)

(153,819

)

General and administrative expenses

(12,668

)

(24,217

)

(14,802

)

Depreciation and amortization

(77,249

)

(81,128

)

(78,534

)

Interest expense

(47,684

)

(50,511

)

(48,269

)

Interest income

28

1,870

667

Equity-accounted income (loss)

19,384

19,658

(4,055

)

Impairment expense, net

(83,615

)

(172,002

)

Gain (loss) on dispositions, net

5,380

(562

)

Realized and unrealized gain (loss) on derivative instruments

13,860

7,190

(90,923

)

Foreign currency exchange gain (loss)

325

(514

)

(3,440

)

Other income (expenses), net

(26

)

(844

)

(1,229

)

Income (loss) before income tax (expense) recovery

6,883

(71,970

)

(254,567

)

Income tax (expense) recovery

Current

(982

)

(1,303

)

(2,136

)

Deferred

244

(2,229

)

Net income (loss)

5,901

(73,029

)

(258,932

)

Attributable to:

Limited partners - common units

(302

)

(80,120

)

(258,141

)

General partner

(2

)

(615

)

(1,907

)

Limited partners - preferred units

7,880

7,989

8,038

Non-controlling interests in subsidiaries

(1,675

)

(283

)

(6,922

)

5,901

(73,029

)

(258,932

)

Basic and diluted earnings (loss) per limited partner common unit

0.00

(0.20

)

(0.63

)



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. Dollars)

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

$

$

$

Net income (loss)

5,901

(73,029

)

(258,932

)

Other comprehensive income (loss)

Items that will not be reclassified subsequently to net income (loss):

Pension adjustments, net of taxes

1,438

Items that may be reclassified subsequently to net income (loss):

To interest expense:

Realized gain on qualifying cash flow hedging instruments

(190

)

(189

)

(208

)

To equity income:

Realized gain on qualifying cash flow hedging instruments

(196

)

(201

)

(255

)

Total other comprehensive income (loss)

(386

)

1,048

(463

)

Comprehensive income (loss)

5,515

(71,981

)

(259,395

)

Attributable to:

Limited partners - common units

(685

)

(79,080

)

(258,601

)

General partner

(5

)

(607

)

(1,910

)

Limited partners - preferred units

7,880

7,989

8,038

Non-controlling interests in subsidiaries

(1,675

)

(283

)

(6,922

)

5,515

(71,981

)

(259,395

)



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of U.S. Dollars)

As at

As at

March 31,

December 31,

2021

2020

$

$

ASSETS

Current assets

Cash and cash equivalents

197,078

235,734

Financial assets

48,621

103,514

Accounts and other receivable, net

217,392

222,629

Vessels and equipment classified as held for sale

7,500

7,500

Inventory

21,586

16,308

Due from related parties

2,723

9,980

Other assets

34,571

37,326

Total current assets

529,471

632,991

Non-current assets

Financial assets

45,753

36,372

Vessels and equipment

3,213,592

3,029,415

Advances on newbuilding contracts

26,094

127,335

Equity-accounted investments

243,698

241,731

Deferred tax assets

5,144

5,153

Other assets

169,887

185,521

Goodwill

127,113

127,113

Total non-current assets

3,831,281

3,752,640

Total assets

4,360,752

4,385,631

LIABILITIES

Current liabilities

Accounts payable and other

333,400

302,414

Other financial liabilities

40,307

198,985

Borrowings

349,890

362,079

Due to related parties

73,226

7

Total current liabilities

796,823

863,485

Non-current liabilities

Accounts payable and other

114,068

128,671

Other financial liabilities

207,425

144,350

Borrowings

2,799,400

2,808,898

Due to related parties

199,648

194,628

Deferred tax liabilities

700

700

Total non-current liabilities

3,321,241

3,277,247

Total liabilities

4,118,064

4,140,732

EQUITY

Limited partners - Class A common units

(2,509

)

(2,505

)

Limited partners - Class B common units

(156,267

)

(157,897

)

Limited partners - preferred units

376,488

376,512

General partner

6,826

6,828

Accumulated other comprehensive income

3,685

4,071

Non-controlling interests in subsidiaries

14,465

17,890

Total equity

242,688

244,899

Total liabilities and equity

4,360,752

4,385,631



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. Dollars)

Three months Ended
March 31,

2021

2020

$

$

Operating Activities

Net income (loss)

5,901

(258,932

)

Adjusted for the following items:

Depreciation and amortization

77,249

78,534

Equity-accounted (income) loss, net of distributions received

(990

)

19,550

Impairment expense, net

172,002

(Gain) loss on dispositions, net

562

Unrealized (gain) loss on derivative instruments

(162,257

)

83,849

Deferred income tax expense (recovery)

2,229

Provisions and other items

(193

)

(940

)

Other non-cash items

12,086

6,246

Changes in non-cash working capital, net

39,239

(17,964

)

Net operating cash flow

(28,965

)

85,136

Financing Activities

Proceeds from borrowings

75,000

72,015

Repayments of borrowings and settlement of related derivative instruments

(99,367

)

(74,217

)

Financing costs related to borrowings

(750

)

(201

)

Proceeds from borrowings related to sale and leaseback of vessels

71,400

11,900

Repayments of borrowings related to sale and leaseback of vessels

(2,881

)

Financing costs related to borrowings from sale and leaseback of vessels

(65

)

Proceeds from borrowings from related parties

75,000

30,000

Lease liability repayments

(3,392

)

(5,753

)

Distributions to limited partners and preferred unitholders

(7,880

)

(8,038

)

Distributions to others who have interests in subsidiaries

(1,750

)

(4,750

)

Repurchase of preferred units

(24

)

Net financing cash flow

105,356

20,891

Investing Activities

Additions

Vessels and equipment

(156,317

)

(201,707

)

Equity-accounted investments

(1,172

)

(465

)

Dispositions:

Vessels and equipment

15,060

Restricted cash

42,202

83,815

Acquisition of company (net of cash acquired of $6.4 million)

6,430

Net investing cash flow

(115,287

)

(96,867

)

Cash and cash equivalents

Change during the period

(38,896

)

9,160

Impact of foreign exchange on cash

240

(4,822

)

Balance, beginning of the period

235,734

199,388

Balance, end of the period

197,078

203,726

Non-IFRS Measures

To supplement the unaudited interim condensed consolidated financial statements, the Partnership uses Adjusted EBITDA, which is a non-IFRS financial measure, as a measure of the Partnership's performance. Adjusted EBITDA is calculated as net income (loss) before interest expense, interest income, income tax expense, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include impairment expenses, gain (loss) on dispositions, net, unrealized gain (loss) on derivative instruments, foreign currency exchange gain (loss) and certain other income or expenses. Adjusted EBITDA also excludes: realized gain or loss on interest rate swaps, as the Partnership in assessing its performance, views these gains or losses as an element of interest expense; realized gain or loss on derivative instruments resulting from amendments or terminations of the underlying instruments; realized gain or loss on foreign currency forward contracts; and equity-accounted income (loss). Adjusted EBITDA also includes the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted investments and excludes the non-controlling interests' proportionate share of Adjusted EBITDA. The Partnership does not have control over the operations of, nor does it have any legal claim to the revenues and expenses of its equity-accounted investments. Consequently, the cash flow generated by the Partnership's equity-accounted investments may not be available for use by the Partnership in the period that such cash flows are generated.

Adjusted EBITDA is intended to provide additional information and should not be considered as the sole measure of the Partnership's performance or as a substitute for net income (loss) or other measures of performance prepared in accordance with IFRS. In addition, this measure does not have a standardized meaning and may not be comparable to similar measures presented by other companies. These non-IFRS measures are used by the Partnership's management, and the Partnership believes that these supplementary metrics assist investors and other users of its financial reports in comparing its financial and operating performance across reporting periods and with other companies.

Non-IFRS Financial Measures

The following table includes reconciliations of Adjusted EBITDA to net income (loss) for the periods presented in the Partnership's Consolidated Financial Summary.

Three Months Ended

(in thousands of U.S. Dollars, unaudited)

March 31,

December 31,

March 31,

2021

2020

2020

$

$

$

Adjusted EBITDA

120,270

142,193

163,548

Depreciation and amortization

(77,249

)

(81,128

)

(78,534

)

Interest expense

(47,684

)

(50,511

)

(48,269

)

Interest income

28

1,870

667

Expenses and gains (losses) relating to equity-accounted investments

(4,869

)

(11,485

)

(28,908

)

Impairment expense, net

(83,615

)

(172,002

)

Gain (loss) on dispositions, net

5,380

(562

)

Realized and unrealized gain (loss) on derivative instruments

13,860

6,061

(89,620

)

Foreign currency exchange gain (loss)

325

(514

)

(3,440

)

Other income (expenses), net

(26

)

(844

)

(1,229

)

Adjusted EBITDA attributable to non-controlling interests

2,228

623

3,782

Income (loss) before income tax (expense) recovery

6,883

(71,970

)

(254,567

)

Income tax (expense) recovery:

Current

(982

)

(1,303

)

(2,136

)

Deferred

244

(2,229

)

Net loss

5,901

(73,029

)

(258,932

)


Adjusted EBITDA from equity-accounted investments, which is a non-IFRS financial measure and should not be considered as an alternative to equity accounted income (loss) or any other measure of financial performance presented in accordance with IFRS, represents our proportionate share of Adjusted EBITDA (as defined above) from equity-accounted investments. This measure does not have a standardized meaning, and may not be comparable to similar measures presented by other companies. Adjusted EBITDA from equity-accounted investments is summarized in the table below:


Three Months Ended

(in thousands of U.S. Dollars, unaudited)

March 31,

December 31,

March 31,

2021

2020

2020

$

$

$

Equity-accounted income (loss)

19,384

19,658

(4,055

)

Less:

Depreciation and amortization

(7,565

)

(7,713

)

(7,838

)

Interest expense, net

(2,068

)

(5,102

)

(3,834

)

Income tax (expense) recovery

Current

(47

)

(139

)

(132

)

EBITDA

29,064

32,612

7,749

Less:

Realized and unrealized gain (loss) on derivative instruments

5,527

1,395

(15,078

)

Foreign currency exchange gain (loss)

(716

)

74

(2,036

)

Adjusted EBITDA from equity-accounted investments

24,253

31,143

24,863