Following an operating loss of $291 million in the third quarter of 2015, Seadrill Limited stated that it has increased its cost savings target for the year to $600 million.
The company’s operating loss follows a profit of $461 million recorded during the same period in 2014. In 3Q 2015, Seadrill’s revenue fell by 24 percent year on year to $985 million and its EBITDA dropped by 14 percent to $546 million. The offshore drilling contractor has an order backlog of approximately $12 billion and its net debt, as at September 30 2015, stands at $10.1 billion.
In its results statement for the second quarter of 2015, Seadrill’s cost savings plan, originally established at the beginning of 2014, outlined a savings target of approximately $500 million in 2015. The company raised this figure by $100 million in its 3Q results and expects to achieve these savings primarily by reducing or postponing spending in operating expense, G&A and capex.
Per Wullf, CEO and president of Seadrill Management Ltd, commented in the company’s latest results statement:
“We believe that market conditions are likely to remain challenging through 2016 and the coming quarters will provide insight into the 2017 environment. It is important to recognize that we are in a cyclical business. The longer this downturn lasts, the more robust the recovery will be when it happens. Seadrill is in a position to capitalize on the upturn with the most modern fleet and world class operations."
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