Dolphin Plans Cuts as Profit Slips

Norway’s Dolphin Geophysical has seen profit dip in the quarter as its 2D seismic division puts pressure on earnings coming from the 3D seismic business.

Despite the revenue growth, the Oslo-listed seismic player, recorded Q1 2015 net income of USD 4.6 million, compared to USD 8.1 million in Q1 2014. The company posted diluted earnings per share of USD 0.01 in Q1. Ramoo Investment Partners is the largest shareholder holding almost 11% of the company shares.

In the first quarter 2015, Dolphin generated revenues of USD 120.1 million, compared to USD 80.2 million in the same period last year.  According to the company, the increase is largely due to increased 3D vessel capacity for exclusive surveys and six vessels in production in addition to increased Multi-Client sales.

The company reported low Multi-Client activity, compared to marine segment, despite amounting at USD 9.3 million in Q1 2015, compared to USD 1.7 million a year earlier.

Dolphin said it expects revenues in the range of USD 450-500 million for 2015.

Furthermore, to tackle the uncertain market, Dolphin announced a USD 20-25 million cost savings program initiated for 2015, including re-delivering/de-rigging of vessels and headcount reductions.

The Dolphin fleet capacity will immediately be reduced by re-delivering M/V Artemis Atlantic to owner and de-rig Artemis Arctic from an 8 streamer 3D vessel to a 2D vessel for 6 months operation in Mexico.

Unfortunately, the Artemis Atlantic has not been on contracts enabling her to deliver positive margins for the last two quarters and she has been pre-stacked during fourth quarter and parts of the first quarter. Consequently, our 2D seismic business is diluting the overall consolidated margins coming from the 3D seismic business.

In addition, Dolphin informed of further fleet reductions or charter renegotiations in 2016 if the seismic market does not improve.

According to the company, the vessel re-delivering, de-rigging and associated personnel redundancies will result in a restructuring charge of approximately USD 5 million in Q2 2015.

Dolphin reported a total of 484 employees as of 31 March 2015, including subcontractors engaged as part of the seismic crew on its vessels.