Polarcus still in red, but riding the wave of strongest backlog since 2014

Seismic services player Polarcus posted a loss of $19 million for the fourth quarter of 2019, but the company expects to benefit from an improving backlog.

According to its financial statement on Thursday, Polarcus recorded revenues of $55.3 million in the fourth quarter of 2019, compared to $58.4 million in Q4 2018.

Polarcus posted a $19 million loss for the last quarter of 2019 compared to an $18.1 million loss in the same period in 2018.

The company noted that its current backlog increased to $240 million, the highest level since 2014.

Polarcus added that there was a lower fleet utilization in the quarter of 71%, compared to 96% in Q4 2018, but was awarded seven new contracts since the end of Q3 2019.

Full-year utilization in 2019 also dropped to 79 percent compared to 87 percent in 2018. Lower utilization resulted from the planned repositioning of the fleet, as well as a delayed contract award on one project and an extended yard stay for one vessel.

Polarcus CEO, Duncan Eley, stated: “Polarcus delivered a substantial increase in earnings during 2019 with EBITDA more than doubling year-on-year and strong growth in operating cash flows. This result was driven by increased margins from improved pricing and continued focus on operational excellence and cost management.

“We maintain a positive outlook for 2020, despite some recent fluctuations in global sentiment observed. Tender levels, multi-client activity, and pricing all continue to develop positively.

“I am confident Polarcus is well-positioned to maximize value from the marine seismic market going forward.”

The company pointed out that its financial results reflected a significantly improved seismic market resulting in substantially higher realized day rates year-on-year.

In its outlook, Polarcus stated that the reshaping of the seismic industry that had occurred, resulting in an increased number of multi-client companies without vessels, provided a catalyst to drive further positive market developments assuming global energy demand is maintained.

Opportunities to increase prices will be driven by healthy levels of exploration and production activity and sustained supply-side discipline. The company will continue to prioritize projects with superior margins reflecting its operational capabilities.

The company’s fleet is 100 percent booked into late Q2 2020 and 65 percent booked for full-year 2020, with such a backlog – strongest since 2014 – Polarcus believes it is well-positioned to continue benefiting from an improving market.

Offshore Energy Today Staff

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