2016-08-22 18:35:00
KCA DEUTAG LOSS $47.2 MLN
Commenting on the results, KCA Deutag's Chief Executive Officer said:
"The group performance was satisfactory in the second quarter, reporting EBITDA of $75.2m, compared to $71.2m in Q1, 2016 and $65.2m in Q2, 2015.
Although oil prices have recovered during the second quarter from the lows experienced in the first quarter, business conditions continue to be extremely challenging. We anticipate that it will take some time for confidence to fully return to the market and do not expect to see significant opportunities for new work through the remainder of 2016 and into H1 2017.
Land Drilling activity in our core markets of Oman and Russia continued to be relatively robust, offset by ongoing weakness in Europe, Nigeria and Kurdistan.
Bentec activity has continued to decline as a result of the weak market conditions. During the quarter we took further steps to reduce costs in line with the reduction in activity.
The Platform Services business has remained relatively strong with a small reduction in EBITDA compared to Q1, 2016 and Q2, 2015 as a result of the cessation of a contract in the Far East and reduced activity in Angola and the UK.
Market conditions for RDS remain unchanged with limited opportunity for new work. We continue with our strategy of reducing costs as far as we can whilst retaining key capability for when the eventual market recovery comes.
In June we were also pleased to complete the sale of our jack-up rig, the Ben Rinnes, which was the last asset in our mobile offshore drilling fleet. This was an excellent result in a difficult market.
During the period we continued to focus on improving our efficiency and pro-actively restructured some of our central functions and have reduced costs in those areas where business activity reduced. As a result margins were higher than both Q1, 2016 and Q2, 2015.
Our cashflow performance remained positive despite our 6 month interest payment being paid in this quarter, and a slight increase in working capital being driven by delayed collections from a national oil company.
Overall our second quarter results showed resilience in the face of ongoing difficult market conditions. We have continued with our strategy of managing our cost base whilst retaining key capability in our business, focusing on superior service delivery and ensuring that we remain competitive to secure new work as new opportunities arise, and the market eventually starts to recover."
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