Norwegian contractor Reach Subsea has slipped into red in the quarter ended June 30, 2017 as it saw cost increased and start of some projects pushed to Q3 and Q4.
The Oslo-listed company reported second-quarter EBITDA of NOK 4.4 million (NOK 12.6 million in Q2 2016). EBITDA for the first half of 2017 was NOK 6.8, against NOK 6.6 same time last year.
Operating expenses were NOK 88.3 million, compared to NOK 83.1 million in Q2 2016. Increase is mainly due to fleet expansion on increased activity levels. Amortized termination fee of NOK 7.2 million has also been booked in Q2 2017.
For the quarter, Reach Subsea booked loss of NOK 10.7 million, or NOK 0.08 per share, on revenue of NOK 79 million, versus profit of NOK 3.2 million, or NOK 0.04 per share on revenue of NOK 89 million in the year-ago quarter.
According to the company, the drop in revenues compared to last year is mostly related to the vessel Normand Reach being on a time charter the full period in 2016 and only two weeks in 2017. First-half 2017 revenues decreased to NOK 117 million from NOK 175 million.
In the second quarter 2017, Reach has increased its fleet by adding two subsea vessels, Havila Subsea and Olympic Delta. Ten WROV systems, compared to six in the previous quarter, were in operation in addition to Surveyor Interceptor SROV.
“While the Group’s financial performance in Q2 did not live up to the standards we have been used to, the Board is confident that the growth initiatives taken, and which impacted Q2 negatively, represents an investment which will pay off in the future periods,” the company said in its Q2 2017 earnings report.
The company reported order book of close to NOK 186 million, most of which is related to work in the third and fourth quarter of 2017.
Subsea World News Staff