Prosafe shrinks loss in 4Q. Expects recovery in 2018

Prosafe, an operator of accommodation rigs known as flotels, narrowed its loss during the fourth quarter 2016 and saw an increase in revenues while expecting the market to pick up next year. 

For the fourth quarter of 2016, the company on Thursday posted a net loss of $32.7 million, which was smaller than the net loss in the corresponding period of 2015 that amounted to $143 million.

As there are few prospects in the foreseeable future for the smallest vessel in the fleet, the Safe Astoria, Prosafe said that an impairment of $84.7 million has been charged to the income statement in the fourth quarter.

The company boosted its operating revenues to $125.8 million during the fourth quarter 2016 versus $103.9 million in the prior-year quarter.

Fleet utilization decreased in the fourth quarter 2016 to 43 percent when compared to 62 percent in the same period of 2015.

Prosafe’s total assets at the end of the year amounted to $2.69 billion, an increase compared to 2015 and assets of $2.19 billion while its net interest-bearing debt equaled $1.185 billion in 2016 compared to $1.19 billion in the year-before.

 

Market recovery in 2018?

 

By the second quarter of 2017, Prosafe expects further reductions in onshore and offshore capex of around 10%. Further, the company’s ambition is to reduce its onshore workforce by 45-50% and offshore, pending vessel activity, by 20-35%.

Looking ahead, Prosafe said it believes that the market is at or is near the bottom of the cycle and that the company can anticipate a gradual recovery in demand and utilization from 2018.

Further, the company concluded that a combination of elements such as falling reserve replacement ratios, significantly lower break-even prices for oil companies, apparent oil price stability and the fact that spending by oil companies on maintaining offshore fields cannot be deferred indefinitely, should result in guarded optimism about the future recovery in activity levels.

Also on Thursday, the accommodation rig operator announced several changes to its management team, including the appointment of a new CEO.

Offshore Energy Today Staff

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