Electromagnetic Geoservices ASA (EMGS) reported revenues of USD 23.6 million in the third quarter 2013, down from USD 44.4 million in the previous quarter and from USD 43.2 million in the third quarter last year.
Contract sales totalled USD 21.5 million, while multi-client sales came in at USD 2.1 million this quarter. The reduction in revenues compared to last year is mainly explained by the steaming of the BOA Galatea to Mexico and the EM Leader to Angola, as well as the higher amount of time spent on multi-client work this quarter.
The Company had an EBITDA loss of USD 3.5 million and reported a net loss of USD 12.2 million.
“During this quarter we completed our current investment program in the multi-client libraries in Brazil and the Barents Sea. Although we believe these are good investments for the future, we are disappointed with the multi-client sales in the third quarter. For the next two quarters we see good contract coverage, as well as late sales from recent investments,” says CEO of EMGS, Roar Bekker.
During – and after the end of the quarter, the Company has secured a new contract with Maersk Oil Angola, a second contract for Nippon in Malaysia and a Letter of Intent for north-west Australia. The Company has also started to operate on the USD 99.8 million contract with PEMEX and recently agreed to add a second vessel to the contract.
The Company’s full year 2013 revenue guidance remains dependant on closing of multi-client late sales in the fourth quarter. The Company expects to have approximately USD 50 million in contract revenues for the fourth quarter, in addition to multi-client late sales closed in the quarter. The Company experiences increased uncertainty related to the timing of the multi-client sales.
Going into the 2014, the Company’s contract coverage is improved, the price level remains attractive and the product portfolio is expanded. Also, customer’s exploration achievements, in particular in Mexico and the Barents Sea, further confirm the technology’s value proposition and contribute to increased market awareness.
EMGS’s long-term outlook is positive and the Company reiterates its strategy to achieve industry-wide integration of EM into the exploration workflow.
Press Release, November 14, 2013