Impairments sink EMGS to wider loss

Norwegian geophysical services company EMGS has seen its first-quarter loss widened on impairment of DeepBlue source system.

The Oslo-listed firm booked Q1 2020 loss of $9.6 million or 7 cents, versus loss of $6 million in Q1 2019.

Revenues for the quarter rose at $11.3 million from $10.8 million same time last year.

Quarter-on-quarter revenues fell from $37 million.

Contract and other sales totaled $11 million, while multi-client sales amounted to $0.3 million.

Impairment of long-term assets totalled $5.8 million in Q1 2020, while no expenses were recorded same time last year.

The vessel utilisation for Q1 2020 was 26 per cent, versus 11 per cent in the corresponding quarter in 2019.

At the end of Q1 2020, EMGS backlog was approximately $44.7 million of which $38.6 million is optional backlog that EMGS said is unlikely to materialise.

As a result of the cold stacking of the Atlantic Guardian and the subsequent reduction in expected revenue, the carrying amount of the DeepBlue was reduced from $22.5 million at the end of December 2019 to $16.8 million at the end of March 2020.

The DeepBlue source system was developed by EMGS under a Joint Industry Project (JIP) and in cooperation with its sub-suppliers.

To remind, for the twelve months of 2019 EMGS booked profit of $15 million on revenue of $89.4 million, compared with net loss of $36.6 million on revenues of $27 million in 2018.