Norway’s Electromagnetic Geoservices (EMGS) has seen its profit slip into the red in the first quarter of 2015 on lower-than-expected revenues due to the weak market.
The company has posted net loss of USD 1.2 million, down from an income of USD 8.2 million in the same period of 2014.
EMGS recorded revenues of USD 32.3 million in the first quarter 2015, a drop from USD 52.5 million in the fourth quarter 2014 and from USD 61.3 million in the first quarter last year.
The contract turnover amounted at USD 22.1 million, while multi-client sales were at USD 10.2 million this quarter.
EMGS experiences delay in sales negotiations, resulting in lower than expected revenues for the first quarter and a limited backlog. The Company has initiated cost reduction measures in the first quarter with expected annual savings of 8 to 10% compared to 2014.
As of 31 March 2015, EMGS’ backlog was at USD 23 million. Of this, USD 14.6 million is related to the PEMEX contract.
“The current market is challenging and our contract revenues for the first quarter is lower than expected. We experience delays in contract negotiations and our backlog is limited. We have initiated cost reduction measures and are prepared to take additional action if necessary. However, we have a unique technology, solid financial position, flexible business model and growing multi-client libraries that we believe position us for future growth in the longer term,” says CEO of EMGS, Bjarte Bruheim.