Songa Offshore: 2Q Profit Drops

Songa Offshore SE, a Cyprus-headquartered drilling contractors has reported operating revenue for the second quarter 2013 of USD 127.4 million.  

Net profit for the period was USD 4.5 million, compared to USD 10.6 million in the same period in 2012.

Total expenses for the second quarter 2013 were USD 91.3 million. EBITDA for the second quarter 2013 was USD 51.9 million. Net financial expenses for the second quarter 2013 were USD 9.4 million.

Basic (EPS) and diluted (DEPS) earnings per share for the second quarter was USD 0.02.

Market conditions and outlook

The performance of the semi market in the North Sea continues to lead all other  international regions. Forecast rig demand from IHS Petrodata shows the North Sea rig  demand growing from 40 to 47 units by 2014. Prospects for Songa’s Norwegian fleet are therefore good, particularly because of barriers to entry in the Norwegian market.

“Strict regulations and harsh environmental conditions will help ensure that the first Songa units to come off contract will be met with favorable market conditions. In Southeast Asia, focus remains on minimizing idle time between contracts. We expect  bidding activity to pick up in the second half of 2013, in time for the Songa Mercur and  Venus to secure new contracts in direct continuation of their current programs. We continue  to monitor rig activity closely, given the potential for units to relocate to Southeast Asia from  Brazil and West Africa. However, we believe any additional supply will be absorbed by the  market with mid-water utilization staying near current levels,” said Songa Offshore in a satement.

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August 26, 2013