Polarcus returns to profit on restructuring gains
Polarcus, a marine geophysical company, on Wednesday posted a profit for the first quarter of the year, compared to a loss in the same period last year owing to financial restructuring.
Polarcus’ net profit for the first quarter of the year totaled $145.9 million, compared to a net loss of $26.4 million in the same period last year, mainly due to the accounting gain of $177.8 million on restructuring in the quarter and a reduction in impairment charge.
The geophysical company’s revenues for the first quarter were down to $63.7 million from $81.1 million in the same period last year over decrease in multi-client, bareboat and management revenues that were down 30%.
Polarcus’ completion of financial restructuring resulted in a $224 million increase to book equity and $351 million reduction in the carrying value of debt.
Rod Starr, Polarcus Chief Executive Officer, said: “The company’s continued focus on expenses including the organizational changes announced in February 2016 are delivering lower underlying operating costs for the company. As expected, the quarter incurred a number of non-recurring costs related to the transformation of the company, including expenses related to the financial and organizational restructurings.”
Starr added: “During the quarter, the company completed its financial restructuring, reducing the carrying value in the balance sheet of the company’s debt by $351 million and increasing the company’s equity by $224 million. The restructuring provides the Company with a sound and predictable debt service structure over a period where we expect to see a continued challenging market.”
The geophysical company’s capital expenditure increased during the quarter to $12.8 million from 0.9 million in the 4Q 2015 due to purchase of a complete in-sea seismic acquisition system and Polarcus Alima having a five year classification survey, but decreased from $15.3 million in the 1Q 2015.
According to Polarcus, the marine seismic market continues to be challenging, with exploration spending by oil companies remaining subdued, lower tender activity across all geographic regions, and a reduced appetite from prospective clients for well prefunded multi-client projects. In addition, Polarcus noted that competition for proprietary contracts remains high.
The estimated value of Polarcus’ backlog measured at the end of the quarter is $200 million, including contracts awarded post-quarter end.
Offshore Energy Today Staff