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EMGS reports second quarter 2016 results

Tuesday, August 23, 2016

Electromagnetic Geoservices ASA (EMGS) recorded revenues of USD 15.1 million in the second quarter 2016, up from USD 12.1 million in the second quarter 2015 and from USD 13.0 million in the first quarter 2016.

Contract sales totalled USD 0.4 million, while multi-client sales amounted to USD 14.7 million. The company has reduced its quarterly cost base, consisting of all operational costs including multi-client investments, from USD 32.0 million in the second quarter last year to USD 14.7 million this quarter. EBITDA ended at USD 2.8 million. The company has done multi-client impairments of USD 9.2 million in the second quarter. Free cash increased with USD 1.2 million from the previous quarter.

"We continue to be challenged by a very difficult market wherein opportunities are being pushed back as the oil industry is re-adjusting its level of spending. However, a combination of a reduced cost base, increased efficiency as a result of recent restructuring measures, will put us in a strong position when the market turns." says CEO of EMGS, Christiaan Vermeijden.

During the quarter, the vessel BOA Thalassa commenced on a multi-client project in India. The vessel has been laid up at a reduced rate since 1 May with the crews temporarily laid off. The Atlantic Guardian has acquired data on multi-client projects in the Hammerfest basin, in the Norwegian Sea and in the North Sea in the second quarter 2016. Following this, the vessel started the mobilisation of a Joint Industry Project. During the second quarter, EMGS and the owner of the EM Leader, agreed to terminate the vessel's charter agreement as of 1 June 2016, to the commercial benefit for both parties.

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 reduced budgets and uncertain timelines.

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