Prosafe sees red ink as revenues slip on lower utilization

Prosafe, an Oslo-listed owner of accommodation rigs also known as flotels, sank to a loss during the second quarter of 2017 as its revenues nearly halved due to lower utilization and chopped dayrates. 

In its report on Wednesday, Prosafe posted a net loss for the second quarter 2017 of $33 million compared to a profit of $5.2 million

Prosafe’s operating revenues in 2Q 2017 period dropped to $61.7 million from $115.4 million in the prior-year quarter. The company explained that this decline reflects lower utilization and dayrates for Safe Boreas, Safe Caledonia, Regalia and Safe Bristolia units compared to the same period last year.

Namely, the fleet utilization rate in the second quarter of 2017 declined to 38.5 percent compared to 41 percent in the corresponding period of 2016.

Firm order book at end of the quarter was $443 million.

‘Lower for longer’

Looking ahead, the Oslo-listed player said that continued low oil prices and cautious E&P spending are indicating that activity levels may stay lower for longer than previously expected. Consequently, the near term market activity in terms of bidding has reduced. However, the prospect list with a three-year look-out remains at a relatively high level, the company said.

Further, in the medium to longer term, Prosafe stated it is anticipated that a combination of efficiency gains implemented and accumulating work related to producing and ageing infrastructure, will lead to activity growth. It is further anticipated that exploration activity, new field developments and tie backs will result in demand also for offshore accommodation services. From a longer term perspective, activity may also be supported by the decommissioning market, the company concluded.

Offshore Energy Today Staff