Polarcus has been raking in higher revenue, which has led to massive improvements to its bottom line.
The Dubai-based seismic shipowner recorded net profit of $13.7m for the third quarter of 2019, compared to a $8.4m loss in the same period last year.
This result equates to earnings per share of $0.027 for the past three months, a significant improvement on the loss of $0.016 per share seen a year ago.
Duncan Eley, the Oslo-listed company's chief executive, called the net result "outstanding".
"We have seen a price increase this year of more than 50% compared to 2018," he said in the firm's third-quarter report.
"The opportunity to generate further improved margins in the industry is driven by the steady increase in underlying demand combined with the supply-side discipline observed to date."
Revenue revving up
Key to Polarcus' upturn is an 87% year-on-year increase in revenue seen during the third quarter, in which income totalled $103.4m.
This was despite slightly lower fleet utilisation during the third quarter, which was 74%, compared to 79% in the same period 2018.
Polarcus attributed the positive revenue result to its "ability to generate premium rates" based on the differentiating features of the Polarcus fleet, its operational capabilities and the company's ability to secure complex projects.
Growth in revenue was driven by a 155% improvement of realised contract day rates, which offset the absence of multi-client revenue and third-party vessel management fees, according to the company.
Polarcus said its strategy is to focus on the contract acquisition market.
Analysts' reaction
Clarksons Platou Securities described the results as "nothing but impressive" in a research note on Tuesday.
Polarcus' segment revenues beat Clarksons' estimate by around 60%, topped its EBITDA estimate by around 80% and free cashflow was five times above the analysts' target.
"Also, by investing $4m in new streamers in the quarter, the company has adopted a more gradual investment profile which we believe fits Polarcus well," Clarksons said in its note.
"In short: this report should be welcomed by the market and we find a positive share price reaction warranted."
Outlook
Polarcus said it expects gradual improvement in exploration and production (E&P) activity, despite recent oil price volatility.
"The reshaping of the seismic industry and ongoing consolidation of seismic vessel operators should lead to Polarcus having an expanded client base of more multi-client companies without vessels," the company said in its report.
Going into 2020, the company said it expects seismic data acquisition capacity to remain at the same low level as seen in recent years.
"With a young and high-performing fleet I am confident Polarcus is well positioned to continue benefitting from the improving market," Eley said.
Polarcus' secured contract backlog stood at an estimated $145m as of 30 September, at 15% reduction compared to $170m at the same time last year.
Its proprietary contract backlog remained flat year on year at $105m.
