Norwegian offshore vessel owner Standard Drilling has reported an operating profit in the third quarter of 2019 following unrealized gain on revaluation of financial assets of $1 million.
Standard Drilling said in its third-quarter financial report on Friday that the operating profit for the period was $0.6 million, which was an increase when compared to a $0.2 million loss in the same period in 2018.
The company added that it considered itself as an investment entity and that it would not consolidate its subsidiaries.
Therefore, the company measures its investments in PSVs based on fair value estimates from reputable independent valuers. Revenues and EBITDA from chartering out the vessels are not consolidated into, nor reflected in the financial statements.
Standard Drilling also stated in the report that it had an underlying positive adjusted EBITDA, excluding non-recurring cost and dry dock, special survey, maintenance, and repair, in the third quarter 2019 of $3.3 million.
That is another increase when compared to last year’s third quarter when the company recorded $0.2 million in adjusted EBITDA.
The utilization of the large-sized PSV’s was 95 percent in the quarter, a ten percent rise when compared to Q3 2018.
The total cash balance was $28 million at the end of the third quarter, including pro-rata ownership of the subsidiaries and investments, up from $26.9 million at the end of the second quarter of 2019.
Martin Nes, chairman of Standard Drilling, stated: “We have had a good utilization during the quarter with acceptable rates. Our results in 2019 show that the market for PSV’s are moving in the right direction after several challenging years. Going into the winter season, our main short term focus will be on securing winter coverage.”
Also during the third quarter, Standard Drilling entered into a memorandum of agreement to sell its Standard Provider platform supply vessel for $13.5 million.
“The sale of Standard Provider in October contributed to a solid increase of our cash holdings. It further demonstrates that we keep following our strategy to exploit the market opportunities that may arise, including purchase and sale of vessels,” Nes added in the report.
The company currently owns 100 percent of five large-size modern PSVs. Standard also invested in nine mid-size PSVs, bringing the total fleet of partly and fully owned vessels to 14 PSVs, including one vessel on a bare-boat contract.
It is worth mentioning that the company has zero debt, cost-effective operations, and low overhead cost.