Highlights Third Quarter 2015
Operating revenue in Q3 2015 was USD 98.4 million (Q3 2014 - USD 69.8 million).
EBITDA in Q3 2015 was USD 59.5 million (Q3 2014 - USD 19.7 million).
Net profit in Q3 2015 was USD 26.4 million (Q3 2014 - loss of USD 21.1 million).
On 29 October 2015 Sevan Drilling and Cosco agreed to exercise the first six-month option of the delivery deferral agreement for Sevan Developer, which extends the deferral period to 15 April 2016.
Financial performance summary
For the three months ended September 30, 2015
Operating revenue was USD 98.4 million compared to USD 69.8 million in Q3 2014. The revenue increase is explained by improved operating performance for the fleet compared to Q3 2014. The Sevan Louisiana achieved a Q3 2015 technical utilization of 97.5% (30.6% in Q3 2014), Sevan Driller technical utilization was 100.0% (76.5% in Q3 2014), and Sevan Brasil technical utilization was 91.2% (83.7% in Q3 2014).
Total operating expense was USD 56.7 million compared to USD 70.6 million in Q3 2014. The decrease is the result of costs related to the downtime events in Q3 2014 on Sevan Louisiana, offset by reductions in operating expenses realized across the fleet from cost savings initiatives and the impact of the Brazilian Real devaluation in Q3 2015. General and administrative costs reduced to USD 3.3 million compared to USD 4.7 million in Q3 2014, as benefits from cost savings were achieved. Depreciation expense decreased compared to Q3 2014 as a consequence of asset impairment recorded in Q4 2014.
Net financial items
Net financial items amounted to USD 17.6 million in Q3 2015 compared to USD 19.2 million in Q3 2014. Interest and commitment fees on the Revolving Credit Facility with Seadrill ("RCF") increased by USD 1.9 million due to draw downs made and a higher outstanding balance on the RCF. Interest expenses on the secured bank loan facility decreased by USD 3.2 million due to a fall in the outstanding balance due to instalments paid, as well as a fall in the floating interest rate.
Net profit for Q3 2015 was USD 26.4 million compared to a net loss of USD 21.1 million in Q3 2014.
For the nine months ended September 30, 2015
Operating revenue was USD 280.9 million for the nine months ended September 30, 2015 compared to USD 218.5 million for the comparative period in 2014. The revenue increase is due to the Sevan Louisiana commencing operations in May 2014 and operating for the full period in 2015, in addition to improved operating performance in 2015.
Total operating expense was USD 186.4 million for the nine months ended September 30, 2015 compared to USD 194.2 million for the comparative period in 2014. In the first half 2015, operating expenses increased by USD 6.0 million mainly explained by Sevan Louisiana operating for the full 2015 period, offset through cost savings initiatives across the fleet and impact of the Brazilian Real devaluation in the 2015 period. General and administrative costs were USD 4.9 million lower from conclusion of the integration and restructuring. Depreciation expense increased as a consequence of Sevan Louisiana in service in the full period, offset by the impact of the asset impairment recorded in Q4 2014.
Net financial items
Net financial items amounted to USD 52.3 million for the nine months ended September 30, 2015 compared to USD 45.1 million for the comparative period in 2014. This is explained by increased interest and commitment fees on the RCF of USD 6.9 million.
The net profit was USD 42.3 million for the nine months ended September 30, 2015 compared to a net loss of USD 22.3 million for the comparative period in 2014.
Cash and cash equivalents amounted to USD 33.9 million as of September 30, 2015 compared to USD 30.2 million as of December 31, 2014. During Q3 2015, interest and principal payments under the debt facility and RCF were USD 15.6 million and USD 35.1 million, respectively. As of September 30, 2015, USD 170.0 million was drawn on the RCF. Proceeds from the deferral agreement for Sevan Developer will be utilized for general corporate purposes and to partially repay the outstanding balance of the RCF.
Sevan Drilling Limited ("Sevan Drilling") is preparing its accounts on the assumption that the company is a going concern. Liquidity remains sensitive to performance of the rigs under their contracts, the continued availability of the RCF, and other market conditions.
For further information, please contact:
Scott McReaken, CEO, Sevan Drilling Management AS
+47 91194651 mobile
About Sevan Drilling:
Sevan Drilling Limited is an international offshore drilling contractor specializing in the ultra deepwater segment. Sevan Drilling Limited is listed on Oslo Børs.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.