Ensco plc Reports Loss in 2Q 2014

By Joseph R. Fonseca
Sunday, August 03, 2014

 

Ensco plc today reported a loss of $5.07 per diluted share in second quarter 2014 compared to earnings of $1.55 per diluted share in second quarter 2013. The loss from discontinued operations for second quarter 2014, which includes a $546 million pre-tax loss on impairment for four floaters that are now held for sale, was $2.38 per share compared to a gain of $0.07 per share in second quarter 2013. The loss from continuing operations in second quarter 2014 was $2.69 per share, compared to earnings from continuing operations of $1.48 per share in second quarter 2013.

Excluding a loss on impairment for four floaters in continuing operations totaling $992 million, or $4.27 per share, second quarter earnings from continuing operations were $1.58 per share, compared to $1.48 per share in second quarter 2013.

Chief Executive Officer and President Carl Trowell said, “Our focus on operational excellence and safety has yielded very good results with 95% operational utilization for the quarter and a total recordable incident rate year to date that is even better than our record safety performance in 2013. We ended the quarter with near-record revenue backlog for our jackup fleet given positive contracting across several regions, however, market conditions for floating rigs have become more challenging. We believe the fundamental drivers of long-term demand for newer, more technologically-advanced floaters are still favorable and our recent contracts for ENSCO DS-8 and ENSCO DS-9 are great examples. Regardless of what the market brings, Ensco’s strategy of offering differentiated rig designs and drilling services, coupled with our strong financial position, give us a competitive advantage.”

Mr. Trowell continued, “Our capital projects team successfully managed the delivery of ENSCO 122 ahead of schedule and ENSCO 121 has commenced its initial contract for Wintershall in the North Sea.

Given our positive outlook for key shallow water markets where Ensco has the number one position, we ordered two ENSCO 140 Series jackups. These rigs have enhanced operational capabilities as well as our patented Canti-Leverage AdvantageSM technology that will translate into significant logistical efficiencies and cost savings for customers.”

“Fleet high-grading during the quarter also included our decision to sell five floaters with an average age of 32 years,” added Mr. Trowell. “This decision followed an in-depth review of our fleet given more challenging floater market conditions, particularly for older midwater rigs. These actions will allow us to more quickly reduce expenses and focus on our go-forward fleet of floaters that has an average age of just nine years. As part of our fleet review, we recorded a $1.5 billion non-cash impairment charge during the quarter for eight floaters.”

Second Quarter Results

“The loss of $5.07 per diluted share in second quarter 2014 reflects write-downs to the carrying values of eight floaters following a comprehensive review of our fleet in light of more challenging market conditions,” said EVP and Chief Financial Officer Jay Swent. “When you exclude the impact of our decision to sell five rigs, the impairment charges and the gain on sale of ENSCO 85, earnings per share were $1.35 in second quarter 2014.”

As detailed below, impairment charges in continuing operations and discontinued operations totaled $6.47 per share in second quarter 2014. Depreciation expense was reduced by a total of $0.04 per share in connection with these impairment charges and there was a $0.01 per share gain on the sale of ENSCO 85. Excluding these items from the reported loss of $5.07 per diluted share, earnings were $1.35 per share in second quarter 2014.

Mr. Swent continued, “Since the $1.5 billion impairment charge is a non-cash item, it did not reduce cash flows from operating activities that totaled nearly $1 billion for the first six months of 2014.”
 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

EU Ships in Libyan Waters Would Undermine Tripoli Govt

The U.N.-backed government in Libya has not invited European ships into its territorial waters to help stop people smuggling because this could harm efforts to

Mothballed Vessels SE Asia Reflect Oil Slump Pain

Around 1,300 offshore support vessels lying idle worldwide. Not everyone in shipping is bemoaning the industry's worst crisis in living memory: a cluster of

Mermaid Maritime Bags Subsea Contracts, Delays Newbuilding

Thailand’s Mermaid Maritime said it has been awarded a number of subsea contracts in the Middle East with a total worth of $11million.   It has also reached

Energy

Mothballed Vessels SE Asia Reflect Oil Slump Pain

Around 1,300 offshore support vessels lying idle worldwide. Not everyone in shipping is bemoaning the industry's worst crisis in living memory: a cluster of

Asian Traders Unload Floating Gasoline as Market Flips

Gasoline shifted from tankers to landed storage or sold off; forward gasoline prices to flip to backwardation from July. The number of tankers storing gasoline

Bulgaria, Greece to Consider Greek LNG terminal

Bulgarian state energy holding company BEH and Greek natural gas company Gastrade have set up a joint task force to prepare a proposal to build an off-shore liquefied

News

Kvichak Delivers for the NYPD

Kvichak Marine Industries informs it continues to expand production of its high performance vessel line with delivery of another Response Boat - Medium Commercial   Kvichak,

Seaway Stakeholders File Suit Against US Coast Guard

Ports and vessel operators challenge what they call “flawed pilotage fees”   A coalition of U.S. Great Lakes ports, vessel operating companies and maritime trade

Royal Caribbean Selects Quintiq Software

Quintiq, a Dassault Systèmes company, announced that Royal Caribbean Cruises Ltd. has selected its software solution to optimize the assignment of more than 80,

Vessels

Kvichak Delivers for the NYPD

Kvichak Marine Industries informs it continues to expand production of its high performance vessel line with delivery of another Response Boat - Medium Commercial   Kvichak,

Baltic Index Up On Higher Capesize Demand

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Tuesday helped by an increase in demand for capesize vessels.

EU Ships in Libyan Waters Would Undermine Tripoli Govt

The U.N.-backed government in Libya has not invited European ships into its territorial waters to help stop people smuggling because this could harm efforts to

Offshore Energy

Mothballed Vessels SE Asia Reflect Oil Slump Pain

Around 1,300 offshore support vessels lying idle worldwide. Not everyone in shipping is bemoaning the industry's worst crisis in living memory: a cluster of

Bulgaria, Greece to Consider Greek LNG terminal

Bulgarian state energy holding company BEH and Greek natural gas company Gastrade have set up a joint task force to prepare a proposal to build an off-shore liquefied

Trim Optimization – Saving Fuel on Offshore Supply Vessels

A joint development project (JDP) between DNV GL, Statoil and Farstad Shipping has demonstrated that offshore supply vessels (OSV) can save up to 21,000 Euros on their annual fuel bill,

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1246 sec (8 req/sec)