Polarcus Third Quarter 2018 - Improved Revenue and Backlog

Posted by OilVoice Press - OilVoice


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

Headlines Q3 2018:

  • Segment¹ revenue of USD 55.2 million, up 14% from Q2 2018 (IFRS revenue of USD 87.0 million)
  • Gross cost of sales of USD 39.8 million, down 3% from Q2 2018
  • Segment¹ EBITDA of USD 7.3 million, up from USD 7.2 million in Q2 2018
  • Cash from operations of USD 0.4 million, impacted by USD 9.2 million negative working capital movements
  • Backlog of USD 170 million, up from USD 150 million last quarter and USD 125 million at same time last year

¹ All references in this report to "Segment" and "Segment reporting" are adjusted for IFRS 15 effects.

"Q3 2018 marked the third consecutive quarter of improved utilization and increased revenue for Polarcus. Revenue was up 14% sequentially, driven by multi-client late sales and reimbursable revenue.

"Focus on managing cost continues to be a high priority, reflected in the delivery of a 3% reduction in gross cost of sales despite an increase in utilization. General and administrative costs were 8% less than the previous quarter.

"Cash from operations was USD 0.4 million, impacted by negative working capital movements of USD 9.2 million during the quarter arising from an increase in receivables from customers.

"Global tender activity continued to improve, though near-term pricing remains competitive. The number of square kilometers tendered in the proprietary contract market during the first nine months of 2018 was up 15% year-on-year. The oil price continued to increase through Q3 2018 and is expected to have a positive impact on 2019 E&P company budgets that will be finalized during Q4 2018. Growth in tender activity, a strengthened oil price along with increasing E&P company exploration focus, point towards continued improvements to the 3D marine seismic acquisition market going in to 2019.

"The Company has 100% of the fleet booked for the remainder of 2018 and 70% booked for Q1 2019. This is a very different picture compared to the same time last year with utilization of the Company's fleet for this winter expected to be strong. Pricing levels of recent awards represent an encouraging improvement in the global marine seismic acquisition market. The Company's backlog at 30 September 2018 and awards announced after the quarter end is estimated at USD 170 million."

Duncan Eley

Chief Executive Officer, Polarcus

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