Second quarter 2013 report – Long transits hit earnings
24 Jul 2013
Polarcus Limited (“Polarcus” or the “Company”) (OSE: PLCS) announces the release of its second quarter 2013 financial statements.
Highlights in the second quarter 2013:
- Revenues of USD 130.5 million, up 14% from Q2 2012
- EBITDA of USD 51.1 million, up 19% from Q2 2012
- EBIT of USD 26.7 million, up 22% from Q2 2012
- Net Cash Flow from operating activities of USD 90.1 million
- Q2 2013 vessel utilization at 85%, comprising Contract 72% and Multi-Client 13%
- Backlog end June of USD 260 million
- Reduced average nominal interest rate to 7.1% through refinancing
- Shares included in the OBX index as one of top 25 most liquid shares on OSE
Highlights in the first half 2013:
- Revenues of USD 275.3 million, up 28% from H1 2012
- EBITDA of USD 104.0 million, up 51% from H1 2012
- EBIT of USD 57.9 million, up 84% from H1 2012
- Net Cash Flow from operating activities of USD 130.5 million
- Sale of Polarcus Samur to TPAO with a long term collaboration arrangement
The quarter saw increased competition for contract work in an uneven market which resulted in several lengthy unpaid transits. More weather standby on certain projects also impacted negatively on revenues. The increased competition in the multi-client business and a delay in block awards from the 2nd tranche announcement of the UK 27th licensing round has led to lower multi-client revenues than expected. However, for H1 2013, total revenues were still 28% higher than for H1 2012 due to a combination of higher day rates and more vessels in operation.
From a position of financial strength, Polarcus continued to reduce its interest cost as it refinanced two existing bonds by issuing a new unsecured bond of USD 95 million with a reduced interest rate of 8%. Furthermore, the sale- and- lease back financing of Polarcus Nadia and Polarcus Naila was renegotiated at improved terms. This in combination with the sale of Polarcus Samur in February 2013 and the consequent repayment of USD 65 million in debt has led to a more robust balance sheet for the Company.
Commenting on the results, Rolf Rønningen, CEO Polarcus, said: “Despite indications that demand globally continues to grow, the market in the last quarter can be best described as uneven. Activity in northwest Europe has not met our expectations and further, it was necessary to reposition certain vessels globally in order to remain competitive, resulting in lower than expected Contract revenues. Prefunding revenues from multi-client were also lower than anticipated on account of continuing delays with the remaining block awards from the UK 27th Round. That said, the underlying market fundamentals appear robust with double digit growth expected in E&P spending. We see expansion in several frontier regions including the Russian arctic, Myanmar, and East Africa supporting a continued improvement of the seismic market into 2014.”
Rolf Rønningen, CEO Polarcus, +971 4 436 0800 / +971 50 459 6982
Tom Henrik Sundby, CFO Polarcus, +971 4 436 0800 / +971 50 708 6480
Polarcus (OSE: PLCS) is a pure play marine geophysical company with a pioneering environmental agenda, specializing in high-end towed streamer data acquisition from Pole to Pole. Polarcus operates a fleet of high performance 3D seismic vessels incorporating an innovative design and advanced maritime technologies for improved safety and efficiency. Polarcus offers contract seismic surveys and multi-client projects worldwide and employs over 500 professionals. The Company’s principal office is in Dubai, United Arab Emirates. For more information, visit www.polarcus.com
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 2012 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.
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