Second quarter 2014 report – Improved earnings over Q1 despite a testing market
8 Aug 2014
Polarcus Limited (“Polarcus” or the “Company”) (OSE: PLCS) announces the release of its second quarter 2014 financial statements.
Highlights in the second quarter 2014:
- Revenue up 13% sequentially and 5% YoY to USD 137.6 million
- EBITDA of USD 49.9 million and EBIT of USD 23.8 million
- Net profit increased to USD 9.2 million, from 6.3 million in Q2 2013
- Net cash flow from operations of USD 45.6 million
- Strong Multi-Client prefunding of 92%
- Polarcus Naila back in production after a successful upgrade
- Financing costs reduced by 30% YoY with improved maturity profile
The Company recorded higher revenue per vessel and improved margins in Q2 2014 compared to Q1 2014, as the quarter saw an end to the downward trend in margins recorded sequentially over the previous two quarters. The improved revenue is driven by higher contract utilization and operational efficiency. Multi-Client sales of existing data library remained elusive due to delayed client purchasing decisions, however subsequent to the quarter end a USD 6.3 million sale was booked originating from the second tranche of the UK 27th licensing round.
A continued competitive market environment combined with increased uncertainty on Multi-Client sales, leads the Company to reduce its full year EBITDA guidance to approximately USD 200 million.
Polarcus Naila returned to operation after a propulsion upgrade which increased her towing and streamer capacity to match the capability of the Company’s four high performance A-class vessels. The vessel now operates with a significantly improved cost base as well as improved earnings potential through the improved towing capability. USD 20 million financing relating to the propulsion and productivity enhancement was received post quarter end.
The Company continued to improve its financial position by extending its debt maturity profile and reducing its financing costs through issuing a NOK 350 million bond. The new bond carries a lower effective interest rate than the old debt the funds were used to refinance. The transactions were finalized post quarter end.
Commenting on the results, Rolf Rønningen, CEO Polarcus, said: “The Company has successfully delivered improved margins in the quarter despite a testing market that has seen tendering levels flat year-on-year and Multi-Client late sales delayed. The competitive market environment meanwhile has had an impact on backlog, however we remain fully focused on improving margins and increasing visibility on future Contract activity. We are also now well advanced on building a strong, well-funded, multi-client project pipeline.”
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 2013 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 of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)