Polarcus hit with more red ink
Seismic services player Polarcus posted a bigger loss for the second quarter 2017 period compared to a year ago while recording a little over half the revenues it booked last year.
The Oslo-listed geophysical company on Friday posted a net loss of $33.7 million for this year’s second quarter as opposed to a $11.2 million loss in the same period last year.
The company’s revenues during the second quarter 2017 dropped to $36.1 million from $67.9 million in the same period last year.
When it comes to the company’s vessel utilization, it decreased from 91% in 2Q 2016 to 75% in this year’s second quarter but increased sequentially by 3%, driven by the Polarcus Amani bare boat contract which started in April 2017.
On the other hand, the reduced revenues were mainly driven by the change in the business mix as the vessel allocation to highly pre-funded multi-client and proprietary contract activities decreased as a result of Polarcus Amani starting the 5 1/2 year bare boat contract with Sovcomflot.
Exclusive seismic contract utilization saw only a 1% decrease in the period amounting to 75% but in the multi-client seismic contract there was no vessel allocation to multi-client projects in the quarter, down from 15% in the prior-year period.
Total cash at quarter end amounted to $36.2 million, comprising $29.5 million unrestricted cash and $6.7 million restricted cash. In addition, the company has a $25 million undrawn working capital facility. The net interest bearing debt amounted to $257.8 million, up from $247.3 million at the end of the first quarter 2017 driven by a lower cash balance at quarter end.
Duncan Eley, Polarcus CEO, commented: “While our Q2 revenues were impacted by lower than expected fleet utilization and delays on turnkey projects, primarily related to environmental conditions, we expect to achieve a significantly stronger Q3 driven by fleet utilization of 90%. There are a number of imminent tender awards for projects commencing in Q4 for which Polarcus is well positioned.”
Market still ‘uncertain’
According to Polarcus, the marine seismic market continues to be challenging and uncertain. With continued limited exploration spending by oil companies, the lower demand combined with excess vessel capacity in the market drives high competition for seismic contracts, the company noted.
For the full year 2017 Polarcus reduced its expected total capex investments to $10 million, from $15 million originally. Expected multi-client investments remain unchanged at $20 million for the full year 2017 and the multi-client pre-funding level target also remains unchanged above 110%.
Offshore Energy Today Staff