Oslo-listed subsea operator, Reach Subsea, generated revenue for the fourth quarter 4Q2014 of NOK 84.3 million, compared with NOK 24 million for the 4Q2013.
The increase in turnover compared to the last year’s fourth quarter was due to the increased activity as reflected by having four vessels in operation compared with one vessel for only parts of 4Q2013.
Operating expense for the quarter was NOK 81.2 million including depreciation. Total operating expense for 4Q2014 was NOK 37.6 million. The increase in operating expenses for the 4Q2014 was mainly due to increased activity.
Reach Subsea had net profit of NOK 7.7 million (approximately $1 million) in the period. The EBITDA was NOK 6.8 million, corresponding to an EBITDA-margin of 8.1%. A strong dollar increased the net finance post, resulting in a 9.1% net result margin for the quarter. The reduced EBITDA-margin, compared to the last quarter, reflects market situation and reduced utilisation for Dina Star and Stril Expolrer.
Reach has seen a reduced tender activity in the second half of the 2014 quarter compared to the first half, which is a result of the oil companies reconsidering their spending plans for the future. However, the company said that the value of outsanding tenders is still at a healthy level of approximately NOK 250 million, mostly related to 2015 work.
For the year 2014, Reach Subsea recorded net profit of NOK 24.8 million ($3.3 million), compared to NOK 15.7 net loss at the end of 2013.
The company has as of today an order book of close to NOK 400 million, of which approximately NOK 335 million is related to work in 2015.
“Heading into 2015 we are faced with a slowdown in offshore oil & gas activity attributable to the significant decline in the oil price, and consequent reductions in the spending budgets of our clients.
“To mitigate the lower activity level and margin pressure in the industry, Reach Subsea has initiated several activities to keep our cost base competitive while expanding our business development activity into other regions than the North Sea,” the company said in a statement.