Electromagnetic Geoservices (EMGS) has recorded revenues of USD 12.1 million in the second quarter 2015, down from 32.3 million in the previous quarter and from USD 42.5 million in the second quarter 2014.
The results were negatively affected by extraordinary costs related to the company’s cost reduction program.
EBITDA ended with a negative USD 6.0 million after a multi-client investment of USD 14.0 million. An impairment of goodwill related to the OHM acquisition in 2011 of USD 14.4 million resulted in a net loss for the second quarter 2015 of USD 26.0 million. The net loss grew compared with USD 2.5 million net loss in the second quarter of 2014, and USD 1.2 million net loss in Q1 2015.
“In the second quarter we were, as expected, more affected by the challenging market conditions than in the previous quarter. We had planned for a higher contract utilisation in the quarter, but negotiations were delayed. During the quarter, we have therefore invested in what we consider to be good and timely multi-client projects, as we see these as important for the future development of our Company,” says CEO of EMGS, Bjarte Bruheim.
During the quarter, EMGS announced and implemented a cost reduction program including a 20% reduction in headcount and a reduction from three to four vessels by taking out the EM Leader from mid-May.
“The market outlook is currently hard to predict. Contract negotiations are delayed and the oil companies’ spending and budgets are further revised and reduced. As a consequence, EMGS Board and management will continue the work to reduce the Company’s cost level and capital expenditures,” said the company in its Q2 report.