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Maersk Drilling ‘delivering’ on 2019 plan despite challenging times, says CEO

Maersk Drilling’s chief executive said yesterday the firm is “delivering” on its 2019 strategy despite a slump in first half profits.

The rig operator posted a pre-tax loss of £4million for the first half of the year, compared to a £95million profit in the same period in 2018.

Revenues were £510m, down from £607m, while earnings before interest, tax, depreciation and amortisation (EBITDA) were £189m, also down from H1 2018 at £253m.

CEO Jorn Madsen said it comes amid “challenging markets” for the industry, as was expected before the start of 2019, but the firm is “on track” to deliver EBITDA of £327m for the calendar year.

He added: “Ebitda of $231m is in line with the guidance we gave before the beginning of the year.It’s still positive cash flow.

“On a relative basis with the rest of the industry, I’m quite satisfied with that. That said, I am aware we do need to make more money.

“We knew that 2019 was going to be challenging.

“We knew there would be legacy contracts running off and new contracts coming in on a lower level and that has now come to fruition.

“In an otherwise challenged market, I think that relative to peers we have done quite well.”

Maersk Drilling employs 35 people at its shorebase in Aberdeen and around 270 offshore workers in the UK, depending on the number of rigs working in the sector.

The firm pointed to the fact that its backlog has increased in the second quarter by nearly a billion pounds to £1.8bn, while there are “positive” signals in the UK and Norwegian markets as well as the Danish sector.

In the first half of the year, new contracts were awarded in the UK for the Maersk Resilient with Independent Oil and Gas and Maersk Resolute with Perenco, while Maersk Innovator got an extension with Cnooc at the Buzzard field.

Rig utilisation was high, while the entry of new private-equity players to the North Sea suits the firm’s business models.

Mr Madsen added: “The interesting part which is new to the UK market compared to Norway is we’re seeing a lot of new players making an entrance. Private equity-backed operations are coming in and our proposition fits that segment really well.

“A lot of decommissioning will also be coming up in the UK. We have a decommissioning company, Maersk Drilling, and the maturity of the UK shelf makes it interesting to work in that space.”

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