Polarcus has good first quarter after restructuringCompany News // April 28, 2016
Polarcus Limited has released its first quarter 2016 financial statements. The company said it had revenues of US$ 63.7 million, down 12 per cent from the fourth quarter of 2015; gross cost of sales of US$53.4 million adjusted for new operating lease expense, down 7 per cent from the last quarter; EBITDA of US$18.1 million adjusted for non-recurring costs, resulting in a 28 per cent margin; and was cash neutral after adjusting for US$23.7 million non-recurring cash payments and release of US$7.8 million of restricted cash. The company had total cash of US$44.4 million in addition to US$25 million in an undrawn working capital facility.
Completion of financial restructuring resulting in a US$224 million increase to book equity and US$351 million reduction in the carrying value of debt.
The company has secured a total of eight awards since end of last quarter, including extensions of bareboat agreement and management contract, resulting in backlog of US$200 million.
Rod Starr, the company's CEO, said: "Against the backdrop of a challenging market, the company maintained industry leading backlog, securing four new contracts and four contract extensions since the end of the last quarter. These successes include a three-year extension of the bareboat contract with Sovcomflot and a two-year extension of the management contract with Turkish Petroleum, which provide additional long-term revenue visibility for the company."
Gross cost of sales, adjusted for US$4 million operating lease expense for Polarcus Nadia and Polarcus Naila, decreased by 7 per cent from the previous quarter, and general and administrative costs adjusted for non-recurring restructuring costs were down significantly.
Polarcus said the the company's continued focus on expenses including the organizational changes announced in February 2016 are delivering lower underlying operating costs. As expected, the quarter incurred a number of non-recurring costs related to the transformation of the cCompany, including expenses related to the financial and organizational restructurings.
"In this low commodity price environment, Polarcus will continue to focus on its business fundamentals of executing projects efficiently and safely and maintaining its strong fleet utilization," said the company. "The company's transformation is developing according to plan with a revised sales strategy bringing us closer to the market and our clients to drive vessel backlog, a lower cost base and disciplined investments to optimize cash, and a new capital structure to sustain the company in the event of prolonged weak market conditions."