Magseis Fairfield Chops Forecast

Seabed seismic services player Magseis Fairfield has lowered its guidance for 2019, in which the company now estimates revenue between USD 455-465 million and full-year EBITDA between USD 45-55 million.

According to the company, adjustments for certain non-cash elements may further impact EBITDA negatively, as may costs related to reorganization and restructuring processes that the new management and board of directors will implement to improve profitability going forward.

The shortfall compared to the financial guidance previously provided reflects the delay of a number of projects into 2020, which was highlighted as a risk factor in the report for the second quarter in August 2019.

In addition, the company said it sees lower average project margins and a generally excessive cost level given the current activity level and capacity utilization.

Magseis Fairfield said it will remain in compliance with all loan covenants for 2019 despite the weaker than expected financial developments.

“We continue to see a large number of tenders and tender programs coming to the market for 2020, and also see multiclient opportunities and potential system sales and leases. We will work hard to capture a large portion of these opportunities and maintain our solid market share,” says Carel Hooijkaas, chief executive officer of Magseis Fairfield.

“The job of the new management is to ensure that we align the organization, capture integration synergies and lower the cost level to improve profitability and the longer-term margin outlook,” adds Hooijkaas.