Red Ink for Dolphin

Norway’s Dolphin Geophysical has slumped into loss in the third quarter on restructuring charges and as revenues declined on weak market and contract delays.

The Oslo-listed seismic player, recorded Q3 2015 net loss of USD 31.1 million, compared to net profit of USD 12.1 million in Q3 2014. Nordstjernan AB  is the largest shareholder with 10.2 per cent of the company shares.

The company booked vessel fleet and organisational restructuring charge of USD 16.3 million.

In the first quarter 2015, Dolphin generated revenues of USD 78.7 million, compared to USD 128.5 million in the same period last year. Revenues for the first nine months of the year were USD 278.9 million, compared to USD 309.7 million in the same period in 2014 representing a year on year reduction of 10 per cent

According to the company, the decrease was primarily due to a 56% reduction in exclusive contract revenue and a 269% increase in Multi-Client revenues. Processing revenues are also up 62% from Q3 2014. The reduction in exclusive contract revenue for Q3 2015 compared to Q3 2014, was driven by lower pricing and less capacity allocated to exclusive contracts.

Dolphin said it expects continued weak market fundamentals, unsustainable price levels and fierce competition on contracts for winter season.

The company reported backlog of USD 91 million as of October 1, 2015 compared to $340 backlog from the prior-year quarter.

Atle Jacobsen, CEO, said: “Based on the very weak market fundamentals, fierce competition and low seismic market rates, we are not able to deliver profitable figures for third quarter.

“The seismic market, which is highly correlated with the oil price development and our clients’ E&P spending, seems not to recover in the short term.

“Consequently, Dolphin will continue the substantial cost and activity reductions to meet the lower demand for seismic services.”