EMGS reports fourth quarter 2015 resultsCompany News // February 16, 2016
Electromagnetic Geoservices (EMGS) recorded revenues of US$20.5 million in the fourth quarter 2015, up from US$16.3 million in the third quarter and down from US$52.5 million in the fourth quarter 2014.
Contract sales ended at US$9.0 million, while sales from the multi-client library ended at US$11.5 million in the quarter. The results were negatively affected by announced restructuring charges related to the company’s cost reduction program. EBITDA ended with a negative US$8.0 million and the company has taken multi-client impairments of US$8.6 million in the fourth quarter.
“The low oil price presents a challenge as exploration budgets continue to come down. However, with the adoption of our technology on the increase, EMGS continues to be well positioned within the industry. I am encouraged by the healthy amount of business opportunities, even though our customers tend to delay decisions to award work closer to the start-up of the surveys,” said the company's CEO, Christiaan Vermeijden.
During the quarter, Boa Thalassa completed a contract in Malaysia. The vessel is currently operating on behalf of ONGC in India on a contract worth approximately US$15 million. Boa Galatea worked on a Proof of Concept study in Mexico in the quarter and was delivered back to the vessel owner in mid-January.
EMGS expects the cost reduction measures to have full effect from the second quarter 2016 and the company is currently ahead of its target to cut costs.
"The market outlook for oil services continues to be challenging, and is characterised by high uncertainty. Oil companies have continued to announce further reductions in their spending for 2016 compared to 2015 as a response to the sharp decline in oil price. The interest in the EM technology from the oil companies is healthy, although challenged by the reduced budgets," said the company.
Based on the current operational forecast, EMGS expects to operate two vessels in 2016 with an option to include a third vessel if certain prospects materialise. The company expects to keep one vessel in Asia throughout 2016, while the other vessel is expected to operate in Europe and the Americas. EMGS will continue to invest in its multi-client library in selected areas.