GC Rieber's Stays Afloat in Second Quarter, Expands into Asia

GC Rieber Shipping posted a net profit of NOK 45.0 million in Q2 2008, compared with NOK 178.9 million in Q2 2007. In Q2 2007, NOK 133.2 million of the profit was related to a reduction in ownership in Arrow Seismic, which no longer were consolidated as a subsidiary in the financial accounts. The net profit in Q2 2008 is in line with expectations, despite negative effects from currency development. The net profit for the first half of 2008 was NOK 75.2 million, compared with NOK 196.8 million in the first half of 2007. The profit in the first half of 2008 is affected by currency development, as well as bad weather conditions in the North Sea in Q1 2008.

"We have during the second quarter continued our positioning for new initiatives within the offshore market and we have established an organization in Asia," commented CEO Sven Rong. "In May, the company invested in four new specialized offshore vessels and acquired a 40% shareholding in the Singapore based company Bluestone Offshore. This adds to the acquisition of subsea specialist Scan Mudring in March.

"The operation in Asia is strategically important for us, partly because Asia is an attractive market, but also because the operation in the long term enables us to become more cost effective," said Rong.

Other highlights from the financial accounts for Q2 2008:

  • Operating income of NOK 151.0 million (NOK 160.3 million in Q2 07).
  • EBITDA from continuing operations of NOK 59.9 million (NOK 73.2 million in Q2 07).
  • Normalized profit before tax from continuing operations of NOK 48.8 million (NOK 49.2 million in Q2 07).
  • Liquid assets and net cash position of NOK 801 million and NOK 380 million respectively.
  • Contract backlog of NOK 1029 million.

The reduction in operating income and EBITDA from continuing operations in Q2 2008 compared with the corresponding period in 2007 is primarily due to weaker USD and GBP. Operations are however on a satisfactory level.

Sven Rong is satisfied with both plan and progress with respect to the reinvestment of capital from the disposal of the shareholding in Arrow Seismic.

"We are progressing well with the expansion in the value chain within the offshore service market," said Rong. "Scan Mudring and Bluestone Offshore are both complementary to Technocean and contribute to expand our footprint within subsea. Furthermore, the investment in the four new specialized offshore vessels will provide significantly expanded capacity to Technocean, as well as opening for other opportunities."

The Asian operation will be important for the company going forward. Both Asia and other regions such as West Africa, which can be operated out of Asia, are important growth regions for subsea going forward. In addition, the presence in Asia will provide ease the recruiting of personnel, which will be important for all of our
business areas going forward.

GC Rieber Shipping has during July once again entered the seismic market, through an investment of NOK 120 million for a 60% shareholding in the recently established company Hexio, which primarily focus on permanent monitoring of oil and gas fields. The other owners in Hexio are Statoil Hydro Venture AS (20%) and
Reservoir Innovation AS (20%).

"We see significant opportunities within the market for permanent monitoring of oil and gas fields. The gain for oil companies by better utilization of existing reservoirs can be large," concluded Rong.