Rowan income falls on out-of-service rigs

Rowan Companies, a US-based drilling contractor has announced that for the three months ended June 30, 2014, the company generated net income from continuing operations of $32.9 million, or $0.26 per share, compared to $82.8 million, or $0.67 per share in the second quarter of 2013.

Rowan has explained that the current quarter reflects a noncash asset impairment charge which reduced net income from continuing operations by $8.3 million, or $0.07 per share. The prior-year quarter included a $12.5 million after-tax gain, or $0.10 per share on the sale of a jack-up rig (Rowan – Paris). Excluding the impacts of these items, net income from continuing operations was $41.2 million or $0.33 per share in the second quarter of 2014 and $70.3 million, or $0.57 per share in the second quarter of 2013.

Rowan’s revenues were $422.9 million in the second quarter of 2014, up 3% over the prior-year quarter due primarily to the start, in late April 2014, of the company’s first ultra-deepwater drillship. However, Rowan’s second quarter 2014 revenues and operating results were significantly impacted by previously disclosed out-of-service periods which resulted in 13% out-of-service time during the second quarter of 2014, compared to 8% in the prior-year quarter.

Tom Burke, President and Chief Executive Officer, commented, “We are pleased that our first ultra-deepwater drillship, the Rowan Renaissance, commenced operations in the second quarter. As our remaining three drillships commence operations over the next twelve months, we look forward to the stability that this earnings growth and associated balancing of our fleet will provide to our shareholders.
“The second quarter was negatively impacted by additional out-of-service days for certain jack-ups as well as start-up issues for the Renaissance. We expect our out-of-service time for our jack-up fleet to decrease significantly beginning in the third quarter.

“We continue to believe that our quality fleet, the talent and experience of our crews, our significant revenue backlog, and our conservative financial profile place us in a solid competitive position as new capacity enters the market and displaces older and less capable rigs.”