Update on the fourth quarter results 2010 for EMGS
(Thomson Reuters ONE) -
Fair value of conversion rights
In 2009, Fugro N.V provided EMGS ASA a NOK 150 million secured convertible loan,
which is due on 2 January 2012, at the current conversion price of NOK 5.40. As
the functional currency for EMGS is USD and the conversion price is in NOK, the
loan is subject to a "fair value adjustment" according to IFRS accounting rules.
This adjustment is made every quarter, and is affected by changes in EMGS's
share price, as well as the exchange rate between USD and NOK.
For the fourth quarter, the negative effect totals USD 21.9 million owing to a
substantial increase in EMGS's share price. This significantly impacts the EMGS
Group's consolidated IFRS financial statements. EMGS has received a temporary
waiver from Fugro for the equity ratio covenant in the loan agreement and is
currently in the process of obtaining the same for the USD 5 million convertible
bond which is due on 18 May 2011.
The above mentioned negative effects will be reclassified as equity should the
convertible bond holders choose to convert on or before final maturity.
The above mentioned effects do not apply to the parent company EMGS ASA.
Fourth quarter revenues and EBITDA
Based on preliminary and unaudited results, revenues for the fourth quarter are
estimated to be USD 27.2 million. EMGS believes that this is within market
expectations.
EBITDA for the fourth quarter is expected to be minus USD 2.4 million. This is
lower than previously indicated. The main items that have affected the
operational expenses negatively are:
- withholding taxes expensed as operating costs
- expenses related to the employee share option program owing to a significant
increase in the company's share price
- year-end accruals on employee expenses and other operational expenses
- extraordinary operational expenses in the Far East
The above mentioned effects total USD 4.2 million.
In addition, the operational expenses in the quarter were affected by the now
decommissioned vessels Atlantic Guardian and Siem Mollie. Total expenses amount
to USD 2.7 million in the fourth quarter. No further expenses associated with
these vessels will affect the 2011 operational results.
The company continues to expect that a normalized operational cost level for a
two vessel operation under the current vessel schedule will be maintained at a
level around USD 22 - 23 million per quarter in 2011.
Cash flow and working capital
During the fourth quarter 2010, the company's cash position has increased from
USD 29.1 to USD 39.6 million. In addition, the company's working capital is
solid with a net positive position of USD 7.9 million.
EMGS will provide further details at the presentation of the fourth quarter and
preliminary full year financial results on Thursday 10 February 2011.
Contacts
Roar Bekker, EMGS chief executive officer, +47 22 01 14 00
Svein Knudsen, EMGS chief financial officer, +47 22 01 14 00
About EMGS
EMGS, the marine EM market leader, uses its proprietary electromagnetic (EM)
technology to support oil and gas companies in their search for offshore
hydrocarbons. EMGS supports each stage in the workflow, from survey design and
data acquisition to processing and interpretation. The company's services enable
integration of EM data with seismic and other geophysical and geological
information to give explorationists a clearer and more complete understanding of
the subsurface. This improves exploration efficiency, and reduces risks and the
finding costs per barrel.
EMGS has conducted more than 500 surveys to improve drilling success rates
across the world's mature and frontier offshore basins. The company operates on
a worldwide basis with main offices in Trondheim and Stavanger, Norway; Houston,
USA; and Kuala Lumpur, Malaysia. Please visit www.emgs.com for more information.
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: EMGS via Thomson Reuters ONE
[HUG#1485360]
Unternehmensinformation / Kurzprofil:
Datum: 04.02.2011 - 08:50 Uhr
Sprache: Deutsch
News-ID 51087
Anzahl Zeichen: 4944
contact information:
Town:
Trondheim
Kategorie:
Business News
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