Magseis Fairfield reports results for the third quarter 2020

(Oslo, 10 November 2020) Magseis Fairfield delivered a solid performance in the third quarter 2020, with positive operating profit and increase in cash balance on the back of good cash flow generation from operations, an increase in backlog, and safe and reliable execution of all ongoing projects.

Financial highlights for the third quarter:

• Revenue of USD 46.9 million and gross margin of 35%
• EBITDA of USD 10.4 million, marking the third sequential quarter with EBITDA
improvement
• Positive operating profit of USD 3.7 million and net profit after tax of
USD 3.1 million
• Positive cash flow from operating activities of USD 10.9 million
• Order backlog increase to USD 170 million, of which USD 50 million for
delivery in 2020
• Cash balance increase to USD 61.8 million and net cash position of
USD 29.0 million

“We are delivering another strong quarter despite lower year-on-year revenue due to the Covid-19 pandemic and the low oil price. Our safety record was strong, with zero recordable safety events and no employees infected by the coronavirus on our crews, and operational performance was good on both the acquisition, reservoir monitoring and source, and multi-client projects. From a financial perspective we delivered good gross margins, strengthened our cash balance and increased our backlog in the quarter. Previously announced cost and capex cuts are being executed as planned, and we report positive operating profit and net profit for the quarter”, says Carel Hooijkaas, CEO of Magseis Fairfield.

The market outlook for the OBN market shows a small increase from 2020 to 2021 but the activity will still be below the 2019 levels. The OBN market is expected to see good growth beyond 2021 on the back of forecasted growth in offshore exploration spend in greenfield and brownfield projects.

“Magseis Fairfield continues to be uniquely positioned to offer OBN solutions in the appraisal, development and production space, as our clients move away from exploration and prioritize cash and value generation from existing fields. We are encouraged by the forecasted OBN market rebound beyond 2021, especially since we see significant additional upside from technology advancements. Our differentiated technology position and strategy gives us a clear market advantage that is not available to others who offer commoditized solutions,” says Hooijkaas. 

“The key to success in the current market will be to protect and preserve our cash position and retain a capital structure that allows us to fully benefit from the market rebound. It is therefore extremely important to continue to adjust the organization to the forecasted activity level and maintain our competitiveness,” adds Hooijkaas.