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GC Rieber bouyant after cutting Reef loose

GC Rieber bouyant after cutting Reef loose
GC Rieber Shipping has reported a profit of NOK43.5m ($7m) for the second quarter, reversing a NOK5.7m loss in the same period last year.

The profit improvement is largely due to the sale of GC Rieber's stake in Reef Subsea, as a substantial loss was booked from Reef Subsea in the second quarter last year.

Operating income was up 23% to NOK214.4m from NOK173.8m in the same period last year, largely owing to contributions from newbuilding Polar Onyx from March 2014.

The results bring the company's profit to NOK84.7m for the first half of this year, up from NOK5.5m in the first half of 2013.

All four of the company's subsea vessels are on medium term contracts, with 100% utlisation in the second quarter and 99% utilisation in the first half. Utilisation in the marine seismic segment was down at 82% for the quarter, negatively affected by yard work and upgrade work on the Polar Marquis.

GC Rieber's Ice/support vessels continued their 100% utilisation through the quarter and half, although operating income in the sector was reduced to NOK15.5m compared to NOK26.1m in Q2 last year due to the sale of the HMS Protector in 2013.

The company has a NOK3bn backlog, with contracts averaging 2.4 years across its fleet of 11 vessel. The company's single newbuild vessel, a seismic ship due for delivery in 2015, has secured a five year contract with Dolphin Geophysical to commence upon delivery.

GC Rieber is expecting a tighter market in the coming quarters for the seismic industry as oil majors continue to tighten their spending. That reduction in oil major investment should have a limited impact on the company's inspection, maintenance and repair vessels, aside from a lengthening of the decision process from their clients.

The company is closely monitoring developments in relationships between Norway, the EU and Russia. Current sanctions have no effect on the contacts GC Rieber has in place for crew vessels and the Polar Pevek, but it acknowledges that political risks in dealing with Russia are raised.