Press

Polarcus Q2 2018 - Increased Revenue With Improving Market Indicators

Posted by OilVoice Press - OilVoice

26-Jul-2018


Polarcus Limited ("Polarcus" or the "Company") (OSE: PLCS) releases its second quarter 2018 financial statements.

HEADLINES Q2 2018:

  • Adjusted¹ revenues of USD 48.4 million, up 21% from Q1 2018 (IFRS revenues of USD 44.6 million)
  • Gross cost of sales of USD 41.1 million, up 9% from Q1 2018
  • Adjusted¹ EBITDA of USD 7.2 million, down from USD 12.1 million before non-recurring costs in Q1 2018
  • Cash flow from operations of negative USD 6.2 million, impacted by working capital build up
  • Available liquidity of USD 74.6 million (including undrawn WCF of USD 40 million), down from USD 86.0 million at end Q1 2018
  • Backlog maintained at USD 150 million

¹ = adjusted for IFRS 15 effects

"We were pleased to witness further improved market activity in Q2 as we recorded our second consecutive quarter of increased utilization, at 85%, a level we expect to maintain in the third quarter.  Our revenues were up 21% sequentially, mainly driven by increased proprietary contract revenue due to increased day rates and utilization. This was the third successive quarter in which we increased revenue, albeit from low levels and the pricing improvement has been slower than anticipated.

"Our gross cost of sales was up 9% on the back of higher utilization and increased project specific costs, leading us to increase our full year guidance to USD 155 million (up from USD 150 million). G&A and capex spend remain on track, as previously guided.

"Cash flow from operations was negative, largely due to an increase in receivables from customers compared to the previous quarter. The Company's available liquidity at quarter end was USD 74.6 million, including the USD 40 million undrawn working capital facility.

"The number of square kilometers tendered during the twelve-month period ending Q2 2018 was up 75% compared to the same period last year. The current oil price level is expected to have a positive impact on our clients' 2019 E&P budgets that will be set over the coming months. Market indicators point toward a stabilization and improvement in the 3D marine seismic acquisition market, though near term pricing remains competitive.

 "The Company secured a number of project awards since last quarter and now has 80% of its vessel capacity booked for H2 2018. As a result, two of Polarcus' vessels are booked for long duration projects extending into Q1 2019. While we remain positive on the underlying industry fundamentals and the mid-to-long term outlook, our near-term priority is to maintain momentum through the winter months thereby providing a platform for further improvements in pricing. The Company's backlog is estimated at USD 150 million."

Duncan Eley
Chief Executive Officer, Polarcus



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