10th Jun 2015 10:36
LONDON (Alliance News) - Thalassa Holdings Ltd Wednesday said 2014 was a "annus horribilis" in financial terms as it swung to a pretax loss after revenue halved and it booked a substantial amount of impairments and provisions.
Thalassa, a holding company with two operating subsidiaries within the energy services industry, reported a USD12.2 million pretax loss in 2014, swinging from a USD5.0 million profit in 2013 after revenue halved to USD15.5 million from GBP30.6 million leading Chief Executive Duncan Soukup to use the Latin term meaning horrible year made famous by Queen Elizabeth II.
The fall in revenue was due to the non-recurring revenue in 2013 from the manufacture and sale of equipment to Statoil not repeating. In 2013, the company generated USD20.3 million in revenue from manufacturing sales.
As a result, all of the revenue for the year came from conducting seismic operations, which rose from USD10.3 million in 2013.
Thalassa also booked USD11.7 million in non-recurring costs, consisting of a USD3.3 million impairment of plant and equipment, a USD2.8 million impairment of intellectual property, and a USD404,298 impairment of development costs.
The remaining balance was made up of provisions for bad debts and associated items. Those debts relate to monies owed to Thalassa's WPG Energy Service Ltd subsidiary from its client, Joint Stock Company Sevmorgeo, which has claimed it does not need to pay debts for work carried out in Ecuador in 2013 as WPG did not meet its obligations.
Thalassa said it has begun talks with Sevmorgeo about the outstanding trade receivable, and said it will "seek legal redress" if it is unable to reach a settlement with the company.
Administrative expenses rose to USD6.4 million from USD4.4 million due to investment in research and development and higher payroll and consultant costs. Depreciation and amortisation increased to USD1.3 million from USD685,173.
The company remains debt free and reported a cash balance of USD17.7 million at the end of 2014.
"2014 was, in financial terms, an 'annus horribilis'. Operationally we struggled at times to accommodate customers' requested variations without seeking to renegotiate contractual terms. However, behind the scenes, an enormous amount of time and effort has been invested to position the group for success in the future," said Chairman Duncan Soukup.
"We have adapted quickly to the huge changes in market circumstances. We have repositioned WGP to meet these new challenges and are ready to capitalise on improving market conditions and increased demand in our chosen areas of operation," he added.
Thalassa shares were down 2.5% to 59.00 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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