SDLP - Seadrill Partners LLC Announces Fourth Quarter 2019 Results
- Operating revenue of $183.0 million.
- Operating loss of $2.3 million.
- Net loss of $42.9 million
- Adjusted EBITDA of $76.8 million.
- Cash and cash equivalents of $560.0 million.
- Economic utilization of 95%.
- Order backlog of $367 million as of February 27, 2020.
Gunnar Winther Eliassen will join the Seadrill Partners Board as an Appointed Director effective February 27, 2020. Gunnar is employed by the Seatankers Group, an affiliate of Hemen Holding Limited. Prior to joining Seatankers, Gunnar was a partner at Pareto Securities.
Financial Results Overview
Total operating revenues for the fourth quarter were $183.0 million (3Q19: $184.8 million). The decrease was primarily due to idle time for the West Capricorn and T-15 after completing contracts and the receipt of termination fees for the West Vencedor in the third quarter not being repeated. These were partially offset by a full quarter of operations for the West Capella and West Polaris.
Total operating expenses for the fourth quarter were $185.3 million (3Q19: $171.8 million). The increase was primarily due to a full quarter of operations for the West Capella and West Polaris. This was partially offset by lower costs for the West Capricorn, T-15 and West Vencedor while idle and slightly lower general and administrative expenses.
Operating loss was $2.3 million (3Q19: income of $13.0 million). The decrease was due to the revenue and cost movements highlighted above.
Net financial items resulted in an expense of $60.0 million (3Q19: expense of $60.7 million). The decrease in the expense was primarily due to lower interest expense on floating rate debt, partially offset by a loss on the mark to market valuation of derivatives of $1.0 million (3Q19: gain of $0.9 million) and lower interest income.
Loss before taxes was $62.3 million (3Q19: loss of $47.7 million).
An income tax credit of $19.4 million was recognized (3Q19: expense of $6.5 million) primarily relating to the release of a $27 million uncertain tax position recorded in the fourth quarter of 2018 in respect of changes in US tax legislation. This was partially offset by normal tax expenses despite reporting a net operating loss in the quarter as losses in one jurisdiction cannot be offset against income in another.
Net loss was $42.9 million (3Q19: net loss of $54.2 million). Seadrill Partners LLC Members had an attributable net loss for the quarter of $29.1 million (3Q19: net loss of $23.7 million).
There was no Distributable Cash Flow for the fourth quarter and the quarterly distribution to common unitholders was eliminated.