Cyprus: SeaBird Announces First Quarter Results
SeaBird has announced solid financial performance in the first quarter of 2012.
– While still a challenging market environment, the first quarter showed signs of improving customer demand. Fleet utilization increased from 60% in the fourth quarter of last year to 65% for the first quarter of this year.
– During the quarter, the company entered into or extended contracts representing an estimated value of approximately USD 30 million.
– Hugin Explorer and Munin Explorer completed the acquisition part of the ONGC contract and the vessels demobilized 10 February 2012. The data processing and interpretation part of the project will be finalized within 12 months from the demobilization date. Munin Explorer subsequently commenced a three-year time charter contract with Fugro.
– GGS Atlantic was relocated to Remontowa Shipyard in Poland for scheduled class renewal.
– Following a streamer incident with the Aquila Explorer in 2011, the vessel was rigged to 8 km hybrid streamer.
– Mr Dag Reynolds was appointed Chief Executive Officer of the company, replacing Mr Tim Isden who stepped down from the position effective 6 February 2012. Mr Reynolds assumed his position with the company 6 April 2012.
– Mr Nils Haugestad was appointed Chief Financial Officer and assumed his responsibilities with the company as of 1 April 2012.
COMPARISON OF Q1 2012 WITH Q1 2011
Voyager Explorer replaced Geo Mariner in Q3 2011. This had a moderate effect on comparable figures in prior periods. Furthermore, the Ocean Bottom Node (”OBN”) business has been divested and represents the discontinued operations.
All figures below relate to continuing operations unless otherwise stated. The company reports a loss of USD 12.5 million for the first quarter 2012 (negative USD 22.6 million same period in 2011). Revenues were USD 34.3 million in Q1 2012 (USD 16.6 million). The increased revenues are mainly due to fleet composition, higher utilization of the vessels in Q1 2012 compared to Q1 2011 and multi-client sales. Operating expenses were USD 27.3 million in Q1 2012 (USD 12.5 million). The change is mainly due to fleet composition and higher vessel utilization. EBITDA was USD 2.7 million in Q1 2012 (negative USD 1.5 million). Depreciation and amortization were USD 11.4 million in Q1 2012 (USD 8.3 million). The increase is mainly due to higher multi-client sales amortization for the period, partly offset by a reduction in depreciation resulting from the impairment of vessels and equipment completed in 2011. Interest expense was USD 3.1 million in Q1 2012 (USD 3.6 million). The decrease is a result of the financial restructuring completed in 2011.
Other financial items, net expenses, of USD 0.4 million in Q1 2012 (USD 6.0 million) decreased mainly due to the currency effect on the bond loans recognized in Q1 2011. Capital expenditures were USD 1.3 million in Q1 2012 (USD 0.3 million). Major capital cost items include the purchase of seismic acquisition equipment and routine engine overhaul for Harrier Explorer as well as the replacement of streamer sections on the Aquila Explorer. A weakening of USD against NOK and EUR has in general a negative impact on the operating expenses.
The utilization rate for 2D/3D vessels in operation was 65% in Q1 2012.
LIQUIDITY AND FINANCING
Cash and cash equivalents were USD 13.7 million (USD 11.4 million), of which USD 3.1 million was restricted in connection with bid and performance bonds as well as deposits to the bond service account. Net cash from operating activities was USD 2.5 million in Q1 2012 (negative USD 36.1 million).
Following the financial restructuring completed in December 2011, the company has one bond loan and one convertible loan outstanding. The 6% secured bond loan has a face value of USD 89.9 million and is recognized in the books at amortized cost of USD 77.1 million per Q1 2012. The bond loan matures 19 December 2015 and has principal amortization due in semi-annual increments of USD 2 million starting 19 December 2012. The 1% unsecured convertible loan with Perestroika has a face value of USD 14.9 million and is recognized in the books at amortized cost of USD 11.7 million per Q1 2012. The convertible loan matures 22 September 2014 and has no principal amortization. Interest on the convertible loan is paid in kind.
The credit facility provided by Fugro to finance working capital requirements for the ONGC contract was fully repaid during the quarter. This financing transaction has been classified under discontinued operations.
Instalments of USD 0.8 million were paid on the lease for Hawk Explorer during Q1 2012 (USD 0.7 million). Net interest-bearing debt was USD 90.9 million at the end of Q1 2012 (USD 201.4 million). The company was in compliance with all financial covenants as of 31 March 2012.
The company is seeking to increase its vessel capacity, but without taking on substantial long term liabilities, in order to benefit from improving market conditions. The goal is to have a more scalable business model going forward.
“We expect a significant upswing in the source vessel market during the second half of 2012 and have extended the bareboat charter on the Kondor Explorer with another two years as a response to increased demand.”
Subsea World News Staff , May 04, 2012; Image: SeaBird