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North Atlantic Drilling Ltd. reports 1Q16 results

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Oilfield Technology,



Highlights from the first quarter

  • North Atlantic Drilling generated first quarter 2016 EBITDA of US$87.3 million.
  • North Atlantic Drilling reports first quarter 2016 net loss of US$6.1 millionand net loss attributable to shareholders of US$9.9 million. The loss per share was US$0.41.

  • Financial highlights

    Consolidated revenues for the first quarter 2016 were US$151.6 million compared to US$150.4 million for the fourth quarter of 2015. The primary reason for the increase is the West Phoenix returned to drilling operations on March 6, 2016 after concluding its idle period under contract which began in the fourth quarter.

    Operating income for the first quarter was US$33.0 million, an increase of US$94.1 million compared to the fourth quarter of 2015 operating loss of US$61.1 million.

    The loss in the fourth quarter of 2015 was mainly attributable to the impairment loss on the West Rigel classified as held for sale, totaling US$82m. The increase in operating income is also due to the West Phoenix returning to operations as stated above.

    Net financial items for the first quarter of 2016 amounted to a charge of $35.1million. The charge included US$26.0 million in interest expenses and foreign exchange loss of US$7.3 million, mainly related to the NOK1500 million bond loan. The fourth quarter of 2015 incurred a net financial charge of US$17.7 million, including interest expenses of US$23.9 million, gain on financial derivatives of US$0.7 million, and gain on foreign exchange of US$8.6 million mainly related to the NOK1500 million bond loan.

    The income tax expense for the first quarter was a US$4.0 million , compared to a US$34.1 million in the fourth quarter of 2015 primarily due to deferred tax liabilities recorded on unremitted earnings in the fourth quarter of 2015.

    Net loss for the first quarter was US$6.1 million and net loss attributable to shareholders was US$9.9 million, resulting in a basic loss per share of US$0.41.

    This is compared to net loss of US$112.9 million and a net loss attributable to shareholders of US$116.9 million for the fourth quarter of 2015.

    Balance sheet as at March 31, 2016

    As at March 31, 2016, total assets decreased to US$3157.0 million from US$3255.1 million compared to the previous quarter.

    Total current assets decreased to US$243.5 million from US$286.5 million compared to the previous quarter. The decrease was mainly due to the fall in cash balances, partly offset by an increase in accounts receivables.

    Total non-current assets decreased to US$2913.5 million from US$2968.6 million compared to the previous quarter. The decrease was mainly due to depreciation on drilling units.

    Total current liabilities decreased to US$444.2 million from US$494.6 million compared to the previous quarter. The decrease is largely due to the decrease in related party payables and fall in other current liabilities.

    Long-term interest bearing debt, including related party debt and current portion, decreased to US$2,411.6 million from US$2,434.9 million during the quarter. Net interest bearing debt, after deducting cash and cash equivalents, increased to US$2,324.2 million from US$2,284.0 million. During the first quarter the Company repaid net US$42.0 million on the US$2 billion credit facility, repaid net US$12.0 million on the US$475 million credit facility and reduced cash by $63.5 million.

    Total equity decreased to US$416.6 million from US$418.7 million compared to the previous quarter. The decrease is primarily due to the net loss for the quarter, partly offset by other comprehensive gains on the pension plan.

    Cash flow

    As at March 31, 2016, cash and cash equivalents decreased to US$87.4 million from US$150.9 million compared to the previous quarter.

    For the three-month period ending March 31, 2016, net cash used in operating activities was US$15.0 million, net cash provided by investing activities amounted to US$2.3 million, and net cash used in financing activities was US$53.5 million.

    Cash from operations compared to the previous period mainly due to an increase in accounts receivables.


    Adapted from a press release by Louise Mulhall

    Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/27052016/north-atlantic-drilling-ltd-reports-1q16-results/

     

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