Prosafe sinks to loss over impairment charges

Prosafe, an owner and operator of semi-submersible accommodation rigs known as flotels, sank to a loss during the third quarter 2017 due to impairments. 

In its financial report on Thursday, Prosafe said that its net loss amounted to $635 million in the third quarter of 2017, compared to net profit of $201.9 million in the third quarter of 2016.

Revenues for the third quarter of 2017 dropped to $68.9 million from $129.8 million in the prior-year quarter. According to the company, this decline was due to the lower utilization as well as lower dayrates.

Namely, the company’s fleet utilization rate went down to 38.9 percent from 52 percent in the corresponding period of 2016,

Due to a continued weak market outlook, Prosafe said that an impairment charge had been made to the third quarter accounts. The impairment amounts to $609 million, out of which $226.7 million relates to goodwill which has been fully impaired. The remaining $382.3 million relates to the rigs.

Total assets at the end of the quarter dropped to $1.96 billion from $2.7 billion in the same period last year due to rig impairments.

The company’s firm order book at end of the third quarter amounted to approx. $375 million.

Looking at the market, Prosafe said that despite positive signals like oil price development, reduced break even levels across the industry and oil companies returning to cash positive positions, activity pick-up is slower than expected. As a result, Prosafe anticipates a continued volatile market for the foreseeable future.

In the North Sea, Prosafe sees low tendering activity due to low and deferred operator spending. Longer term, Prosafe expects increased tendering and contracts related to support accumulating maintenance backlog and modification work at ageing infrastructure.

Offshore Energy Today Staff