Highlights from the third quarter
- North Atlantic Drilling generated third quarter 2015 EBITDA* of $113.1 million
- North Atlantic Drilling reports third quarter 2015 net income of $1.4 million and a net loss attributable to shareholders of $2.6 million. The loss per share was $0.01.
- North Atlantic Drilling secured a contract extension for the semi-submersible rig West Phoenix with Total E&P UK Limited, commencing mid-March 2016 and securing work for the unit through the end of August 2016. The total revenue potential for the contract extension is approximately $62 million.
* EBITDA is defined as 'Earnings Before Interest, Tax, Depreciation and Amortization' and has been calculated by taking operating income plus depreciation and amortization.
Financial highlights
Third quarter 2015 results
Consolidated revenues for the third quarter 2015 were $194.6 million compared to $210.7 million for the second quarter. The primary reasons for the decrease are the West Phoenix winter period dayrate reduction and the West Venture contract completion.
Operating income for the third quarter was $57.2 million, a decrease of $7.3 million compared to the second quarter operating income of $64.5 million. The decrease is primarily due to the West Phoenix and West Venture as stated above, combined with continued focus on cost savings initiatives.
Net financial items for the third quarter of 2015 amounted to a loss of $47.9 million. The loss included $24.1 million in interest expenses, loss on financial derivatives of $32.6 million, and foreign exchange gain of $8.7 million mainly related to the NOK1,500 million bond loan. The second quarter of 2015 incurred a net financial loss of $20.5 million, including interest expenses of $25.1 million, gain on financial derivatives of $8.8 million, and loss on foreign exchange of $3.4 million mainly related to the NOK1,500 million bond loan.
Income taxes for the third quarter was a $7.9 million expense, compared to a $0.2 million benefit in the second quarter. The change was primarily due to a net tax benefit recognized during the second quarter in respect of return-to-provision ("RTP") adjustments, whereas there was no such adjustment made in the third quarter.
Net income for the third quarter was $1.4 million and the net loss attributable to shareholders was $2.6 million, resulting in a basic loss per share of $0.01. This is compared to net income of $44.2 million and a net income attributable to shareholders of $40.1 million for the second quarter.
The Company reports operating revenues of $597.3 million, operating income of $158.6 million and a net income of $34.3 million for the nine months ended September 30, 2015. This compares to operating revenues of $972.5 million, operating income of $286.8 million and a net income of $154.2 million for the nine months ended September 30, 2014.
Balance sheet as at September 30, 2015
As at September 30, 2015, total assets decreased to $3,440.6 million from $3,484.8 million compared to the previous quarter.
Total non-current assets decreased to $3,102.8 million from $3,145.2 million compared to the previous quarter. The decrease was mainly due to depreciation on drilling units.
Total current liabilities increased to $514.1 million from $491.6 million compared to the previous quarter. The increase is largely due to the increase in related party payables. For further information please see Note 17 to our consolidated financial statements.
Long-term interest bearing debt, including related party debt, decreased to $2,282.9 million from $2,347.7 million during the quarter. Net interest bearing debt decreased to $2,333.1 million from $2,415.1 million during the quarter. During the third quarter the Company repaid net $42 million on the $2 billion credit facility and repaid net $12 million on the $475 million credit facility. As at September 30, 2015, the Company had undrawn amounts of $50 million available on its credit facilities.
Total equity increased to $519.7 million from $515.7 million compared to the previous quarter. The increase is primarily due to the net income for the quarter.
Cash flow
As at September 30, 2015, cash and cash equivalents increased to $155.4 million from $134.5 million compared to the previous quarter.
