Second quarter 2016 report – Continued cost management on higher revenues

Polarcus Limited (“Polarcus” or the “Company”) (OSE: PLCS) announces the release of its second quarter 2016 financial statements.


HEADLINES Q2 2016:

  • Revenues of USD 67.9 million, up 7% from Q1 2016
  • Multi-client revenues of USD 26.5 million, prefunding level of 205% 
  • Gross cost of sales of USD 55.2 million, down 4% from Q1 2016
  • EBITDA of USD 23.0 million, up 27% from Q1 2016 adjusted EBITDA
  • Cash from operations of USD 11.2 million, negatively impacted by working capital build-up due to payment terms  
  • Total cash of USD 33.7 million in addition to USD 25 million undrawn working capital facility, down from USD 44.4 million at end Q1 2016 
  • Three contract awards since end of last quarter, resulting in backlog of USD 150 million

 

“The second-quarter revenue increased by 7% over the first quarter, driven by strong multi-client revenue from a converted contract project offshore Brazil. The project was carried out with high efficiency and strong cost control providing an extraordinary prefunding level in excess of 200%. At the same time, the contract business realized lower effective day rates which were impacted by certain turnkey projects.

To navigate the challenging market we remain focused on delivering operational excellence and on maintaining our strong backlog. Our technical downtime remains below 2%. Three new contract awards were secured during the quarter with all representing new revenue sources. Two projects are located in countries that Polarcus has not previously operated in and the third is to be acquired with our new XArray(TM) technology. XArray is our new acquisition configuration that enables increased efficiency while providing enhanced data quality to our clients, further improving our competitiveness. We continue to drive costs down to succeed in the current market, and as a result we realized a further drop in gross cost of sales by 4% from already low levels in the previous quarter.  

As expected, total cash dropped during the quarter as a result of a working capital build-up which should improve in the third quarter. The build-up is largely a result of extended payment terms negotiated earlier with one client, payment from whom was received in July.

We expect the difficult market conditions to continue into 2017. In this challenging environment, we will continue with our plan to focus on the areas under our control through maintaining strong fleet utilization, aligning costs with business activity, and executing projects safely and efficiently. In line with our Core Values, we will continue to promote innovative ways to deliver excellence to our customers which is key to the company over the long term.”

Rod Starr
Chief Executive Officer


Key Financials

 

  Quarter ended   Six months ended   Year ended
(In millions of USD) 30-Jun-16 31-Mar-16 30-Jun-15   30-Jun-16 30-Jun-15   31-Dec-15
Revenues 67.9 63.7 91.7   131.6 172.8   377.5
EBITDA (before non-recurring items) 23.0 18.1 39.4   41.1 78.0   157.0
EBITDA 23.0 (5.5) 38.4   17.5 73.6   142.8
EBIT (before non-recurring items) (4.6) (2.0) 3.3   (6.7) (0.9)   15.4
EBIT (4.6) (27.5) (64.5)   (32.2) (73.3)   (315.4)
Net profit / (loss) for the period (11.2) 145.9 (78.3)   134.7 (104.7)   (374.1)
Basic earnings/(loss) per share (USD) (0.02) 0.79 (0.12)   0.38 (0.16)   (5.6)
Net cash flows from operating activities 11.2 14.2 31.9   25.4 83.4   167.5
Total assets 662.2 686.3 1,127.3   662.2 1,127.3   848.2
Total liabilities 369.3 382.3 746.4   369.3 746.4   736.3
Total Equity 292.9 304.0 380.9   292.9 539.0   111.9
Equity Ratio 44% 44% 34%   44% 34%   13%
PP&E cash investment 2.6 10.7 6.0   13.4 13.0   15.1
Multi-client projects cash investment 12.9 11.5 21.1   24.3 64.1   97.0
Total cash 33.7 44.4 47.3   33.7 47.3   68.5
Net interest bearing debt 260.3 251.5 629.2   260.3 629.2   588.1

 ¹Non-recurring items include impairments, the cost of onerous contract provisions and restructuring costs.

Contacts

Rod Starr, CEO
+971 4 436 0800
rod.starr@polarcus.com

Hans-Peter Burlid, CFO
+971 50 559 8175
hp.burlid@polarcus.com

 

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 www.polarcus.com

 

Disclaimer

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 of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)