POLARCUS LIMITED: POLARCUS SECOND QUARTER 2018 - INCREASED REVENUE WITH IMPROVING MARKET INDICATORS

07:00
Polarcus Limited (Polarcus or the Company) (OSE: PLCS) releases its second
quarter 2018 financial statements.

HEADLINES Q2 2018: * Adjusted revenues of USD 48.4 million, up 21% from Q1 2018 (IFRS revenues
of USD 44.6 million)
* Gross cost of sales of USD 41.1 million, up 9% from Q1 2018
* Adjusted EBITDA of USD 7.2 million, down from USD 12.1 million before
non-recurring costs in Q1 2018
* Cash flow from operations of negative USD 6.2 million, impacted by working
capital build up
* Available liquidity of USD 74.6 million (including undrawn WCF of USD 40
million), down from USD 86.0 million at end Q1 2018
* Backlog maintained at USD 150 million

= adjusted for IFRS 15 effects

We were pleased to witness further improved market activity in Q2 as we
recorded our second consecutive quarter of increased utilization, at 85%, a
level we expect to maintain in the third quarter. Our revenues were up 21%
sequentially, mainly driven by increased proprietary contract revenue due to
increased day rates and utilization. This was the third successive quarter in
which we increased revenue, albeit from low levels and the pricing
improvement has been slower than anticipated.

Our gross cost of sales was up 9% on the back of higher utilization and
increased project specific costs, leading us to increase our full year
guidance to USD 155 million (up from USD 150 million). G&A and capex spend
remain on track, as previously guided.

Cash flow from operations was negative, largely due to an increase in
receivables from customers compared to the previous quarter. The Companys
available liquidity at quarter end was USD 74.6 million, including the USD 40
million undrawn working capital facility.

The number of square kilometers tendered during the twelve-month period
ending Q2 2018 was up 75% compared to the same period last year. The current
oil price level is expected to have a positive impact on our clients 2019
E&P budgets that will be set over the coming months. Market indicators point
toward a stabilization and improvement in the 3D marine seismic acquisition
market, though near term pricing remains competitive.

The Company secured a number of project awards since last quarter and now
has 80% of its vessel capacity booked for H2 2018. As a result, two of
Polarcus vessels are booked for long duration projects extending into Q1
2019. While we remain positive on the underlying industry fundamentals and
the mid-to-long term outlook, our near-term priority is to maintain momentum
through the winter months thereby providing a platform for further
improvements in pricing. The Companys backlog is estimated at USD 150
million.

Duncan Eley
Chief Executive Officer, Polarcus

Contacts

Duncan Eley, CEO
+971 50 553 2198
duncan.eley@polarcus.com

Hans-Peter Burlid, CFO
+971 50 559 8175
hp.burlid@polarcus.com