Electromagnetic Geoservices ASA (EMGS) recorded revenues of USD 20.5 million in the fourth quarter 2015, up from USD 16.3 million in the third quarter and down from USD 52.5 million in the fourth quarter 2014.
Contract sales ended at USD 9.0 million, while sales from the multi-client library ended at USD 11.5 million in the quarter. The results were negatively affected by announced restructuring charges related to the Company’s cost reduction program. EBITDA ended with a negative USD 8.0 million and the Company has done multi-client impairments of USD 8.6 million in the fourth quarter.
“I am pleased to have started at EMGS. The low oil price presents a challenge as exploration budgets continue to come down. However, with the adoption of our technology on the rise, EMGS continues to be well positioned within the industry. I am encouraged by the healthy amount of business opportunities, even though our customers tend to delay decisions to award work closer to the start-up of the surveys,” says CEO of EMGS, Christiaan Vermeijden.
During the quarter, the vessel BOA Thalassa completed the announced contract work in Malaysia and the vessel is currently operating on the announced contract work for ONGC in India worth approximately USD 15 million. The BOA Galatea worked on a Proof of Concept study in Mexico in the quarter and was delivered back to the vessel owner in mid-January.
EMGS expects the cost reduction measures to have full effect from the second quarter 2016 and the Company is currently ahead of its target to cut cost
The market outlook for oil services continues to be challenging, and is characterised by high uncertainty. Oil companies have continued to announce further reductions in their spending for 2016 compared to 2015 as a response to the sharp decline in oil price. The interest in the EM technology from the oil companies is healthy, although challenged by the reduced budgets.
Based on the current operational forecast, EMGS expects to operate two vessels in 2016 with an option to include a third vessel if certain prospects materialise. The Company expects to keep one vessel in Asia throughout 2016, while the other vessel is expected to operate in Europe and the Americas. EMGS will continue to invest in its multi-client library in selected areas.
Please find the full report for the fourth quarter 2015 enclosed. The results will be presented at 10:00 CET today at the Company’s premises in Dronning Mauds gate 15 in Oslo. The presentation will be published at 09:30 CET.