Q1 2019 financial results
Highlights Q1 2019
- Revenues of USD 8.2 million in Q1 2019, same level as in Q1 2018
- Operating loss (EBIT) of USD 0.2m vs operating profit of USD 0.2 million in Q1 2018
- Adjusted EBIT of USD 0.1 million in Q1 2019 vs USD 0.2 million in Q1 2018
- Positive operational cash flow of USD 1.8 million
- Billing ratio of 79% in Q1 2019
- Continued solid HSE performance and no lost time incidents (LTIs) during the quarter
- Robust financial position with cash balance of USD 7.2 million
- Offshore renewable business continues strong growth
- Opening up of new office in Boston, US to target renewables market
- Order backlog up to USD 9.0 million with increase in pipeline of opportunities
- Subsequent event: Entered into agreement to acquire three business lines (Adjusting, Marine and Offshore, jointly “BTS”) representing the majority of Braemar Technical Services division
“Q1 2019 started weaker than expected and was affected by the fluctuations in the call out contracting market with delays in some operations. Our backlog and pipeline increased during the quarter. We are pleased that our geographical expansion continues through the opening of an office in Boston, US. We look forward to support the renewables developments in the region.
The activity in the offshore wind sector remains high. We are very excited about the future of the offshore wind business particularly in emerging markets where we have identified several growth opportunities. This combined with that growth is finally expected to return to offshore oil and gas investments this year lead us to be optimistic on a continued strong performance for 2019″ says Mr. David Wells, CEO of Aqualis ASA
Revenues and adjusted EBIT
Revenue were steady at USD 8.2 million in Q1 2019 (USD 8.2 million in Q1 2018). Revenues in Middle East and for OWC increased while there was a decrease in Europe due mainly to the closure of our operations in Norway. EBIT loss of USD 0.2 million in Q1 2019 (profit of USD 0.2 million in Q1 2018). Adjusted EBIT was USD 0.2 million with a margin of 1.7% versus 2.4% in the same period last year.
The financial position of Aqualis is strong with cash balance of USD 7.2 million at end of Q1 2019.
Most entities have had positive operational performance in the quarter despite continued overall weak market conditions in the oil and gas sector. The billing ratio for technical staff (including subcontractors) was reduced to 79% in Q1 2019 compared to 84% in Q1 2018 due to delays in some operations.
Outlook
Aqualis financial performance is driven primarily by activity within the global oil and gas markets and the offshore renewables sector. The O&G sector continues to face challenging market conditions, but signs of recovery. Based on analyst estimates the offshore O&G exploration budgets increasing with 10 – 20% in 2019. This is expected to lead to market improvement for Aqualis in 2020 and beyond.
Aqualis expects the Middle East region to remain robust, a region where we are gaining an increasingly dominant position. The market conditions in other regions are weaker.
Our activity in the offshore renewables market remains high and the industry has a strong project pipeline over the next years. OWC is strengthening its market position and experiences increasing opportunities in emerging markets. Growth opportunities have been identified globally and further expansion is planned. OWC is enhancing its service offering and re-focusing on higher margin advisory work.
The acquisition of BTS will increase scale, broaden service offering and position the combined company as a leading adjusting, marine, offshore and renewable consultancy.
Aqualis’ strategy remains unchanged being focused on widening and strengthening its global client portfolio and enhancing client loyalty to take increased market share. The company has a flexible cost base needed to adapt more quickly to market changes.
The presentation will be available through a conference call only, at 10:30 a.m. CET. The recording of the presentation will be available on the company website. To join this event, please use the dial in details below 5- 10 minutes prior to start time.
Dial in details:
Local – USA +1 929-477-0448
Local – UK +44 (0)330 336 9411
Local – Norway +47 2350 0296
Confirmation code: 6598983
Investors and financial media
Kim Boman, CFO, Aqualis ASA
Telephone: +47 959 63 912
Email: kim.boman@aqualis.no
Other media enquiries
Endre Johansen, Corporate Communications AS
Telephone: +47 41 61 06 05
Email: endre.johansen@corpcom.no
About Aqualis ASA
Aqualis ASA (OSE: Aqua) is a public company that, through its subsidiaries and associates, offers energy consultancy services to the offshore oil, gas and renewables sectors globally. The group employs experienced consultants across 19 offices in 15 countries worldwide. Aqualis ASA operates under two different brands: AqualisBraemar and Offshore Wind Consultants. AqualisBraemar is a specialised offshore marine and engineering consultancy firm, focusing on the shallow and deep-water offshore segments of the oil and gas industry. Offshore Wind Consultants is a globally focused consultancy providing independent services to the offshore renewables industry.