Polarcus ends uneven quarter but anticipates growthCompany News // July 26, 2013
Seismic company Polarcus says the second quarter of 2013 saw increased competition for contract work in an uneven market which resulted in several lengthy unpaid transits. More weather standby on certain projects also impacted negatively on revenues.
"The increased competition in the multi-client business and a delay in block awards from the second tranche announcement of the UK 27th licensing round has led to lower multi-client revenues than expected," said Polarcus.
"However, for the first half of 2013, total revenues were still 28 per cent higher than for the first half of 2012 due to a combination of higher day rates and more vessels in operation.
"From a position of financial strength, Polarcus continued to reduce its interest cost as it refinanced two existing bonds by issuing a new unsecured bond of US$95 million with a reduced interest rate of 8 per cent.
Furthermore, the sale and lease back financing of Polarcus Nadia and Polarcus Naila was renegotiated at improved terms.
This, in combination with the sale of Polarcus Samur in February 2013, and the consequent repayment of US$65 million in debt, has led to a more robust balance sheet.
Commenting on the results, Rolf Rønningen, CEO Polarcus, said: "Despite indications that demand globally continues to grow, the market in the last quarter can be best described as uneven.
"Activity in northwest Europe has not met our expectations and further, it was necessary to reposition certain vessels globally in order to remain competitive, resulting in lower than expected Contract revenues.
"Prefunding revenues from multi-client were also lower than anticipated on account of continuing delays with the remaining block awards from the UK 27th Round.
"That said, the underlying market fundamentals appear robust with double digit growth expected in E&P spending. We see expansion in several frontier regions including the Russian arctic, Myanmar, and East Africa supporting a continued improvement of the seismic market into 2014."