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    Marine Subsea publishes second quarter financial highlights - liquidity remains tight

    Company News // September 15, 2010

    In the second quarter of 2010, Marine Subsea in Norway had operating revenues of US$43.4 million and an operating profit of US$10.2 million. EBITDA amounted to US$13.1 million.

    MS Karianne Ltd realised a foreign exchange (FX) loss of US$8.7 million following the termination of a forward contract, which contributed to the consolidated net loss of US$9.9 million.

    MS Sarah Ltd recorded US$10 million in revenues in the second quarter. This amount relates to December to February payments under the back stop agreement with Sonangol, but was recorded as debt on the balance sheet at the end of the first quarter. Since the balance date, it was agreed that these payments were to be final. This has a positive effect in the second quarter.

    Adjusting for the special treatment of MS Sarah Ltd and the backstop contract, net loss before tax amounted to US$5.9 million for the second quarter.

    Marine Subsea’s total assets as of 30 June 2010 amounted to US$565.1 million, and total cash and cash equivalents were US$14.6 million. Total liabilities stood at US$544.2 million and total equity at US$20.9 million.

    All of the company’s five offshore support barges are currently in operation and generating income. African Lifter was put on hire for a five year contract with Sonangol in the beginning of June, while the other four barges generated income throughout the quarter.

    The multipurpose/intervention vessel Sarah did not work during the second quarter, but sailed back to Europe in June to work in the North Sea. In July, Sarah successfully completed a 10 day job for Repsol in Spain. The vessel is now performing a multi-client well abandonment campaign in the UK sector of the North Sea and is committed until mid September. Sarah will then mobilize for West Africa to start the Canuku project for Sonangol in October, estimated to take approximately 3-4 months.  

    Sarah needs to be fitted with subsea equipment (such as a lubricator) in order to perform well intervention, which is necessary for the Canuku project. Until then, Sonangol has stated that it cannot make payments under the back stop agreement.

    As a result of this, MS Sarah Ltd was not able to make the quarterly payment of interest and principal to Eksportfinans and Standard Bank on 16 June. The company is in close dialogue with its lenders and are discussing a standstill agreement.

    Said the company: "Due to the lack of payments for Sarah, liquidity is still tight and creditors outstanding remain high. The company expects to be able to communicate concrete proposals to address this in the near future."

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