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NAO in remains the red in Q2

NAO in remains the red in Q2
Nordic American Offshore (NAO) remained in the red in the second quarter of 2015 with a $400,000 loss.

The second quarter loss compared to a $4.1m profit in the same quarter in 2014. However, it did represent an improvement over NAO's $2.9m loss in Q1 2015.

The gradual improvement was attributed to a “modest” increase in North Sea spot rates towards the summer, partially mitigating Q1’s weak winter spot market described by NAO as “normal at this time of year”.

However, poor offshore market in the wake of the falling oil prices continues to drive down the company’s bottom line, from $4.1m profits in Q2 2014.  Operating cash flow, meanwhile, fell to $3.4m in Q2 2015, from $7.7m in 2014.

Despite NAO reports that geopolitical tensions between Russia and the West are also impacting Northern/Arctic operations, the company has hinted it will seek work in the 60 new Norwegian drilling blocks in the High North, with several of its vessels capable of Arctic operation.

As of the end of Q2, NAO has $3.6m net debt for its eight vessel fleet, totalling $28.8m. The company has drawn $37m of its $150m credit facility, available until early 2020.

“We concentrate on keeping our vessel operating costs low, while always maintaining our strong commitment to safe operations,” NAO said. “As we expand our fleet, we do not anticipate that our administrative costs will rise correspondingly.

“As a matter of policy, the company will always focus on maintaining a strong balance sheet with low net debt.”

TAGS: Offshore