Polarcus: Challenging 4Q on global slowdown in project awards

Polarcus Limited announces the release of its fourth quarter and preliminary full year 2013 financial statements.

Polarcus recorded an increase in EBITDA margin to 41% with low utilization being offset by lower costs in 4Q 2014. Reduced finance costs due to less debt and reduced interest rates further helped the Company to record an increase in net profit margin. The second tranche of the 27th UK licensing round had a positive effect on Multi-Client revenue, with USD 8 million revenue recognized in Q4 resulting directly from the round.

The Company highlighted the following in the fourth quarter 2013:

– Revenues of USD 123.3 million, EBITDA of USD 50.8 million and EBIT of USD 24.5 million

– Increase in EBITDA margin to 41% compared to 40% in Q4 2012

– Reduction in OPEX, SG&A and finance costs compared to Q4 2012

– Net profit of USD 7.4 million, compared to a net loss of USD 3.3 million in Q4 2012

For the full year 2013 the Company recorded an increase in revenues of 1%, while reducing vessel operating expenses by 7%. The Company strengthened its financial position during the year by repaying and refinancing bonds and reducing its overall debt burden and reducing finance expenses by 14% compared to the previous year. Further the Company renegotiated more favourable debt covenants on some remaining debt. 2013 was the first full year in which the Company recorded a net profit in all four quarters.

Full year 2013 highlights:

– Increase of 11% in EBITDA to USD 211.9 million from USD 190.2 million in 2012

– Increase of 29% in EBIT to USD 118.1 million from USD 91.4 million in 2012

– Increase of 344% in net profit to USD 43.5 million from USD 9.8 million in 2012

– Record high annual margins: EBITDA 40%, EBIT 22% and Net profit 8%

– De-levering of the balance sheet through refinancing and repayment of debt following the sale of Polarcus Samur

Commenting on the results, Rolf Rønningen, CEO Polarcus, said: “The market environment in the fourth quarter has proved challenging, with a global slowdown in project awards resulting in low utilization and some vessel standby in Asia-Pacific pending contract awards. That said, good cost discipline combined with responsible bidding and excellent project execution enabled the Company to deliver a respectable quarter despite these strong head winds. Furthermore, the Company’s determined focus on deleveraging throughout the year has delivered a net profit of USD 43.5 million in 2013, up from USD 9.8 million in 2012. Polarcus enters 2014 in good shape with a current backlog of USD 230 million and a growing reputation in the industry for delivering high quality seismic across both the contract and Multi-Client business lines.”

Press Release, February 14, 2014

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