Maersk Drilling 3Q Income Impacted by Costly Start-Ups
Denmark’s Maersk Drilling reported a drop in profit in the third quarter 2012. The company’s net income for the quarter was USD 87 million compared to USD 139 million in the third quarter of 2011.
The latest quarterly result was negatively impacted by two delayed contract start-ups and maintenance yard stays for two drilling rigs, the company explained. Revenue reduced to USD 450 million in Q3 2012 from USD 484 million in Q3 2011
With the recent USD 700 million contract for the second newbuild drillship and a high forward contract coverage Maersk Drilling is well positioned to reach its strategic aspiration of delivering a profit of USD 1 billion said the company in a press release issued yesterday, November 12.
“The start-up issues materialising in the second and third quarter are hampering our result for 2012, which is obviously not satisfying. However, these are bumps on the road and not jeopardizing our longer term strategic aspiration. We have a strong forward contract coverage providing us with a high degree of earnings visibility and the market remains very encouraging as illustrated by our latest contract for the second of our newbuild drillships,” says Claus V. Hemmingsen, CEO of Maersk Drilling and member of the Executive Board of the A.P. Moller – Maersk Group.
By the end of the third quarter Maersk Drilling’s forward contract coverage was 100% for the remaining part of 2012 and the contract coverage stays high in 2013 (97%) and 2014 (64%). In October 2012 Maersk Drilling reported a new contract of around USD 700 million for its second newbuild drillship for operations in the U.S. Gulf of Mexico. With this contract Maersk Drilling has signed contracts for five out of seven drilling units currently under construction.
Maersk Drilling is one of the four strategic core business units in the A.P. Moller – Maersk Group prioritized for investments. Maersk Drilling’s financial ambition is to deliver USD 1 billion to the Group’s profit by 2018 by growing its business within the ultra harsh environment jack-up and ultra deepwater floater segments.
In line with this strategy Maersk Drilling has invested a total of USD 4.5 billion in seven new drilling units since 2011 and is aiming at doubling the fleet and hire 3,000 new employees.
November 13, 2012