Aqualis ASA

11/28/2019 | Press release | Distributed by Public on 11/27/2019 23:04

Q3 2019 financial results

Q3 2019 financial results

HIGHLIGHTS Q3 2019 • Revenues of USD 18.0 million (Q3 2018: USD 18.0 million pro-forma combined, USD 8.6 million Aqualis stand-alone) • Adjusted EBIT of USD 0.3 million (Q3 2018: Adj. EBIT of USD -0.1 million pro-forma combined) • Operating loss (EBIT) of USD 0.2 million (Q3 2018: Operating profit of USD 0.6 million for Aqualis stand-alone) • Billing ratio of 70% in Q3 2019 • Integration process on track with cost synergy estimate increased to USD 2.5 million from initial estimate of USD 1.1 million • Good performance in Far East and seasonal weaker performance in Middle East • Continued solid HSE performance and no lost time incidents (LTIs) • Robust financial position with cash balance of USD 10.7 million • Working capital improvement project initiated, good initial progress 'Q3 2019 was our first full quarter operating as the combined company AqualisBraemar, following the acquisition of Braemar Technical Services. The combination has created a strong platform for developing the combined group and increasing shareholder value. The transaction is also a step forward to consolidate our industry. The feedback from our clients, our employees and the insurance markets has been very positive. We are already seeing the upsides of the combination in our offering to our clients, who now benefit from a broader suite of services, larger workforce and increased geographical footprint. Our goal remains to meet the increasing expectations of our industry globally and to be recognized as the 'go to' consultant of the shipping and energy markets. The process of integrating the two companies is proceeding well, and we are ahead of schedule on several fronts. We originally targeted cost synergies of USD 1.1 million, with full run rate expected by the end of 2021. In our second quarter report we raised that target to USD 2.0 million, and this quarter we further increase this to USD 2.5 million. At the end of Q3 2019 we are pleased to report that we have achieved run-rate cost synergies of USD 1.9 million. Our renewables arm, OWC, performed strongly in an increasingly robust, though competitive, market. Growth opportunities continue to manifest themselves, partly because the industry is becoming more global and new developers enter the market and partly due to our success in raising OWC's profile in the market. By leveraging our experience from over 30 GW of projects since 2011, we are ideally positioned to benefit from this globalisation. Following the successful opening of the Taiwan office, OWC recently established new locations in UK (Edinburgh) and Australia (Perth and Melbourne) to meet the increasing global demand. Our performance in the oil and gas market, where our focus lies mainly on risk mitigation, continues to gradually stabilize and give indications of improvement, has been solid during the quarter. The seasonal weakness in Middle East was as expected, but partly counteracted by good performance in the Far East. On the marine side, which covers work mainly related to bluewater vessels, we have maintained a solid market position, driving consistent revenues during the quarter. We believe we have performed well against our main competitors gaining continued good support from our clients. Focus has been on enhanced business development and performance in this area has been strong as we lay the foundations for expanded service lines going forward. Our loss adjusting arm has performed strongly in Asia Pacific but overall this business line has been slightly more challenging following the unexpected loss of some employees immediately after the takeover. Steps have therefore been taken to re-align management, to promote from within and stabilize our position. We currently have an active recruitment drive which is starting to see positive results. In addition, we see good opportunities to expand our global footprint. We are excited about the opportunities that lie ahead as a combined company with increasing demand from cyclical recovery in the oil & gas market and the continued expansion of the offshore renewables market. We are well positioned to meet these demands with AqualisBraemar's strong service offering', says Mr. David Wells, CEO of AqualisBraemar ASA. A presentation of the third quarter 2019 results is scheduled today at 08:00 am CET at SpareBank 1 Markets' office at Olav Vs gate 5, 0161 Oslo. The event will be webcasted live and available for replay shortly after. To watch the webcast over the internet, please visit AqualisBraemar's web site, www.aqualisbraemar.com, at least 10 minutes early to register and to download and install any necessary software. The slide deck for the presentation will be available on www.newsweb.no and on AqualisBraemar's web site www.aqualisbraemar.com. For further information, please contact: Investors and financial media; Kim Boman, CFO, AqualisBraemar ASA Telephone: +47 959 63 912 Other media enquiries: Endre Johansen, Corporate Communications AS Telephone: +47 41 61 06 05, Email: [email protected] About AqualisBraemar ASA AqualisBraemar ASA (OSE: Aqua) offers independent consultancy services to the offshore energy (oil & gas and renewables) , shipping and insurance industries. The group employs specialist engineers, naval architects, master mariners, loss adjusters and technical consultants in 33 countries worldwide. AqualisBraemar ASA operates under three brands: • AqualisBraemar: a leading adjusting, marine and offshore consultancy to the energy, shipping and insurance industries. • AqualisBraemar Yacht Services: a specialised marine consultant to the superyacht market. • Offshore Wind Consultants: an independent engineering and project management consultancy to the offshore renewables sector