Magseis Fairfield Reports Results for the Second Quarter 2020

Source: 8/25/2020, Location: Europe

Magseis Fairfield delivered strong operational and financial performance in the second quarter 2020, with all crews performing according to plan despite challenging logistics during the pandemic. The priorities going forward remain to ensure the safety and welfare of Magseis Fairfield’s employees, continue to win new contracts, and to preserve the cash position in order to secure a good entry into 2021.

Financial highlights for the second quarter:

* Revenue of USD 44.7 million and gross profit of USD 18.9 million (gross margin of 42%)
* EBITDA of USD 9.9 million
* EBIT loss and net loss after tax of USD 2.9 million
* Order backlog of USD 151 million, of which USD 82 million for delivery in 2020
* Cash balance of USD 56.6 million – net cash position of USD 23.9 million

Financial highlights for the first half:

* Revenue of USD 98.0 million with gross margin of 32%
* EBITDA of USD 15.8 million
* Operating loss of USD 11.0 million and net loss after tax of USD 14.9 million
* Operating cash inflow of USD 15.6 million and total increase in our cash balance of USD 3.1 million

“We have worked hard to ensure strong execution on the acquisition and reservoir monitoring projects as well as the ongoing multi-client survey, while at the same time taken decisive action to adjust our cash spending to the current market. This focus is showing results through improved margins and a financial position that maintains our flexibility for the future. At the same time, we have been able to win new contracts in a difficult market, and look forward to working with our clients to secure additional work for 2021 and beyond”, says Carel Hooijkaas, CEO of Magseis Fairfield.

The ZXPLR1 crew in the GoM continued to perform well in the second quarter and has full backlog coverage for the remainder of the year, and the Reservoir Monitoring and Source crews in Norway also delivered solid performance in the quarter. The crew on the Cornerstone multi-client project performed well, and the project will continue into the fourth quarter if North Sea weather conditions allows. In addition to project execution, Magseis Fairfield also built and delivered the second and last batch of the Z100-nodes for an existing client in Asia in the second quarter.

The improved results reflect improved operational execution and strengthened cost control throughout the business, which have been the crucial elements in the strategic turnaround and reorganization of the company.

To adapt to a new market environment, several initiatives are being implemented to rightsize the organization and preserve cash. The company is on track to reduce cash costs by approximately 75% from 2019 levels.

“Looking forward, we see that our clients have cut capex and reduced or postponed investment plans to preserve cash. Our clients’ focus is shifting away from exploration to cash and value generation from existing resources, and we believe we are well positioned to benefit from this shift through delivery of cost-efficient high-quality OBN data”, says Hooijkaas.

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