First Quarter 2017 Report – Improved liquidity and lowest ever operating costs

Polarcus Limited (“Polarcus” or the “Company”) (OSE: PLCS) announces the release of its first quarter 2017 financial statements.


  • Revenue of USD 47.2 million, flat versus Q4 2016
  • Gross cost of sales of USD 46.2 million, down 12% from Q4 2016
  • General and administrative expenses down 19% to USD 3.5 million, adjusted for non-recurring costs
  • EBITDA of USD 10.4 million (adjusted for non-recurring costs), up from negative USD 2.6 million in Q4 2016
  • Cash from operating activities of USD 14.4 million, up from negative USD 2.6 million in Q4 2016
  • Total cash balance of USD 46.9 million in addition to USD 25 million undrawn working capital facility
  • Completion of NOK 330 million equity raise in the quarter, extended bank instalment freeze and reduced operating lease rates resulting in total improved liquidity of approximately USD 80 million through 2018
  • Eight contract announcements since end of last quarter, including a long-term bareboat agreement, resulting in combined backlog of USD 205 million

The seismic market continued to be challenging in the first quarter 2017 and Polarcus recorded utilization of 72%, flat from Q4 2016. Revenue for the quarter was also flat at USD 47.2 million. Contract revenue decreased by 11% to USD 31.9 million as a result of lower day rates. The lower contract revenue was offset by 32% increased multi-client revenue of USD 14.9 million (Q4 2016 – USD 11.2 million). The increased multi-client revenue was a result of improved operational performance which drove the prefunding level up to 134%, compared to 87% in the previous quarter.

The Company continued to improve its cost base during the first quarter of 2017, leading to an all-time low gross cost of sales of USD 46.2 million, a decrease of USD 6.6 million (12%) compared to the fourth quarter 2016. General and administrative expenses adjusted for one-off costs associated with the amendments to the Company’s finance agreements, decreased by 19% to USD 3.5 million in Q1 2017 compared to the previous quarter. The cost base continues to be the lowest in the industry and reflects the Company’s strong focus on cost management and efficient operations.

The Company increased its total cash by USD 32.4 million during the quarter. Total cash at the quarter end amounted to USD 46.9 million, comprising USD 40.2 million unrestricted cash and USD 6.7 million restricted cash. The net interest bearing debt amounted to USD 247.3 million, down from USD 270.7 million at the end of the fourth quarter 2016 driven by a higher cash balance at quarter end.

The Company secured eight new contracts since the end of the last quarter. One of the awards is a multi-year contract award with TGS-NOPEC Geophysical Company ASA (TGS) to acquire 30,000 km² of 3D data, estimated as approximately 15 vessel months. Approximately 20,000 km² will be acquired in 2017 by two vessels utilizing Polarcus’ innovative XArray(TM) multiple source acquisition method. The remaining area will be acquired in 2018. During the quarter, Polarcus Amani AS, a Norwegian subsidiary of Polarcus Limited entered into a Heads of Agreement with SCF GEO AS (“Sovcomflot”), to charter a vessel on bareboat terms for a fixed period of 5 1/2 years with options to extend for up to four additional months. Subsequent to the quarter end the vessel was delivered to Sovcomflot on 21 April 2017. The vessel was delivered without streamer package which is now spare and available for other vessels in the Polarcus fleet. The Charter will generate a minimum hire of USD 70 million over the fixed charter period.

During the quarter the Company completed an equity raise of NOK 330 million through a private equity placement (the “Private Placement”). The transaction leverages the conditions that were incorporated into the restructuring completed by the Company in February 2016. As a result of the equity raise, the Fleet Bank Facility lenders agreed to a loan amortization freeze extension until 01 January 2019, improving liquidity by approximately USD 30 million in 2018. The loan amortization freeze triggers a one year extension of the reduced operating lease rates for Polarcus Naila and Polarcus Nadia until 01 January 2019, improving liquidity by a further approximately USD 15 million in 2018. The Company’s USD 25 million working capital facility was also extended by one year to 01 July 2019, which further improves the Company’s financial flexibility.

The Private Placement, supplemented by the debt service reductions, improves the Company’s liquidity by approximately USD 80 million through the end of 2018. Certain amendments were also made to the Debt Service Ratio and equity covenants.

On 17 March Duncan Eley was appointed Chief Executive Officer of Polarcus. Mr. Eley replaced Rod Starr, who left the Company following the completion of a two-year period of restructuring, refinancing and reorganization.

“The Q1 results reflect what has been a challenging winter season for the marine seismic industry, with utilization and subsequent revenue at relatively low levels for Polarcus. During this period, we successfully placed Polarcus in a stronger financial position by continuing to lower costs, increasing our backlog (giving us close to full capacity booked through to the end of Q3) and raising NOK 330 million in new equity along with reducing debt service through to 2018.

“Our operational performance remains excellent, with what we believe is industry-leading technical and EHSQ performance, while our vessel operating costs were at an all-time low for the quarter at an average of less than USD 90,000 per vessel per day. The quarter also marked a further breakthrough for our innovative XArrayTM acquisition technique, with almost 70% of our booked capacity for 2017 requiring XArrayTM configurations by our clients.

“Based on the backlog secured year-to-date, we expect fleet utilization to be 75% in Q2 and 90% in Q3 and we are working hard to firm up more booked capacity for Q4 2017 and in to 2018.

“The current industry pricing levels for seismic services remain subdued despite some positive developments in tender activity which has increased year-on-year from a low base.

“In this challenging market, Polarcus continues to focus on the critical factors within its control: securing backlog, operating vessels with industry-leading safety and efficiency, and delivering high quality services to our clients.”

Duncan Eley

Chief Executive Officer



  Quarter ended   Year ended
(In millions of USD) 31-Mar-17 31-Dec-16 31-Mar-16   31-Dec-16
Revenues  47.2  47.2  63.7    243.4
EBITDA (before non-recurring items¹)  10.4  (2.6)  18.1    51.4
EBITDA  8.9  (29.0)  (5.5)    0.9
EBIT (before non-recurring items¹)  (18.0)  (34.9)  (2.0)    (54.1)
EBIT  (20.3)  (86.0)  (27.5)    (131.3)
Net profit / (loss) for the period  (38.0)  (97.0)  145.9    20.3
Basic earnings/(loss) per share (USD)  (0.05)  (0.18)  0.79    0.05
Net cash flows from operating activities  14.4  (2.6)  14.2    48.1
Total assets (period end)  571.8  571.9  686.3    571.9
Total liabilities (period end)  393.2  393.1  382.3    393.1
Total equity (period end)  178.6  178.8  304.0    178.8
Equity ratio 31% 31% 44%   31%
Property, plant & equipment cash investment  1.7  1.0  10.7    16.4
Multi-client projects cash investment  11.1  12.6  11.5    44.6
Total cash (period end)  46.9  14.5  44.4    14.5
Net interest bearing debt (period end)  247.3  270.7  251.5    270.7


Non-recurring items include impairments, the cost of onerous contract provisions and restructuring costs.



Duncan Eley, CEO
+971 50 553 2198

Hans-Peter Burlid, CFO
+971 50 559 8175


About Polarcus

Polarcus (OSE: PLCS) is an innovative marine geophysical company with a pioneering environmental agenda, delivering high-end towed streamer data acquisition and imaging services from Pole to Pole. Polarcus operates a fleet of high performance 3D seismic vessels incorporating leading-edge maritime technologies for improved safety and efficiency. Polarcus offers contract seismic surveys and multi-client projects with advanced onboard processing solutions and employs nearly 500 professionals worldwide. The Company’s principal office is in Dubai, United Arab Emirates. For more information, visit


The information included herein may contain forward-looking statements. Forward-looking statements include all statements that are not historical facts, including but not limited to statements expressing or implying the Company’s intent, belief or current expectations with respect to, among other things, forecasts, estimates, and predictions. Such forward-looking statements necessarily involve risks and uncertainties and are dependent on assumptions, information, data or methods that may be incorrect or imprecise. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealized. Some factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, developments in the oil and gas industry, the demand for seismic services, the demand for data from the Company’s multi-client library, currency risks, political risks, regulatory risks, and unexpected operational setbacks. For a further description of other relevant risk factors we refer to our 2015 Annual Report. The reservation is also made that inaccuracies or mistakes may occur in the information given above concerning the current status of the Company or its business. Any reliance on the information given above is at the risk of the reader, and Polarcus disclaims any and all liability in this respect. 


This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.