Altera Infrastructure Reports First Quarter 2021 Results

Rhea-AI Summary

Altera Infrastructure GP LLC reported Q1 2021 results with revenues of $272.8 million and a net income of $5.9 million, compared to a net loss of $259 million in Q1 2020. Adjusted EBITDA was $120.3 million, down from $164 million a year earlier, due to lower revenues from its Petrojarl FPSO and the absence of Voyageur FPSO revenues. The Partnership had total liquidity of $222 million as of March 31, 2021. Key strategic updates include the delivery of two LNG-fueled shuttle tankers.

Positive

• Net income of $5.9 million in Q1 2021, a significant recovery from a $259 million loss in Q1 2020.
• Total liquidity of $222 million providing a solid financial foundation.
• Delivery of two new LNG-fueled shuttle tankers enhancing operational capacity.

Negative

• Adjusted EBITDA decreased to $120.3 million from $164 million year-over-year.
• Lower revenues from key segments, particularly the FPSO and FSO, affecting overall performance.
• Absence of Voyageur FPSO revenues due to unit lay-up.

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

 

FAQ

What were Altera's revenues in Q1 2021?

Altera reported revenues of $272.8 million in Q1 2021.

How much net income did Altera report for Q1 2021?

Altera reported a net income of $5.9 million for Q1 2021.

What is Altera's Adjusted EBITDA for Q1 2021?

Altera's Adjusted EBITDA for Q1 2021 was $120.3 million.

How did Altera's Q1 2021 results compare with Q1 2020?

Altera's net income improved from a loss of $259 million in Q1 2020 to a net income of $5.9 million in Q1 2021.

What is Altera's liquidity status as of March 31, 2021?

Altera had total liquidity of $222 million as of March 31, 2021.

What significant events occurred for Altera in Q1 2021?

Altera took delivery of two LNG-fueled shuttle tankers in Q1 2021, enhancing its fleet.