Polarcus halves quarterly loss on the back of highest ever vessel utilization

Seismic services player Polarcus halved its quarterly loss and boosted revenues driven by highest ever vessel utilization and improved dayrates. 

According to its financial statement on Wednesday, Polarcus recorded revenues of $58.4 million in the fourth quarter of 2018, an increase from revenues of $37.2 million in the same period of 2017.

When it comes to its quarterly profit, Polarcus posted a $13.3 million loss for the last quarter of 2018 compared to a $26.2 million loss in 4Q 2017.

The company’s backlog of $232 million increased by 40% compared to same time last year and backlog of $164 million.

Polarcus CEO, Duncan Eley, commented: “Polarcus saw revenue growth for the fourth consecutive quarter with $58.4 million segment revenues in 4Q. The 6% increase in segment revenue was driven by strong utilization and improved dayrates. The fourth quarter has traditionally been a quiet period for the industry, however 4Q marked the company’s highest ever utilization of 96%, up from 86% in 3Q. Continued improvements in the underlying business were partly offset by reduced revenue from vessel management fees and multi-client late sales compared to 3Q.”

Eley added: “Tender activity was robust in Q4 and we have been able to secure eight new contract awards since the end of Q3 2018. Encouragingly, these latest additions to the company’s backlog demonstrate improvements in both pricing and contractual terms compared to 12 months earlier.”

“Despite the decline in the oil price during the fourth quarter, demand for marine seismic services in 2018 increased by more than 20% year-on-year in terms of square kilometers.”

Polarcus fleet is 100% booked for 1H 2019 and 70% booked for the full year 2019, providing good visibility of future earnings and the ability to further increase pricing levels.

Positive view on 2019

Looking ahead, Eley said: “Recent oil price volatility has re-introduced some uncertainty around E&P companies’ spending outlook, however based on discussions with clients, we hold a positive view on 2019. With the oil price around current levels, pricing in the seismic market is expected to continue to improve over the short to mid-term driven by continued increase in demand from E&P companies and supply discipline from a reduced number of global vessel operators.”

He further stated: “Polarcus is in the midst of a transforming competitive landscape, with fewer operators enabling more disciplined supply of high-end 3D and 4D seismic vessel services for a growing client base comprising both E&P companies and pure-play multi-client companies. Pricing levels of recent awards represent an improvement in the global marine acquisition market. With increasing demand in 2019 from both segments of the client base we expect to see our margins continue to improve as pricing levels increase and the benefits of our operational leverage are realized.”

Offshore Energy Today Staff