NADL - North Atlantic Drilling Ltd. reports third quarter 2015 results

Highlights from the third quarter

• North Atlantic Drilling generated third quarter 2015 EBITDA* of $113.1 million
• North Atlantic Drilling reports third quarter 2015 net income of $1.4 million and a net loss attributable to shareholders of $2.6 million. The loss per share was $0.01.

North Atlantic Drilling secured a contract extension for the semi-submersible rig West Phoenix with Total E&P UK Limited, commencing mid-March 2016 and securing work for the unit through the end of August 2016. The total revenue potential for the contract extension is approximately $62 million.

*  EBITDA is defined as 'Earnings Before Interest, Tax, Depreciation and Amortization' and has been calculated by taking operating income plus depreciation and amortization.

Financial highlights

Third quarter 2015 results

Consolidated revenues for the third quarter 2015 were $194.6 million compared to $210.7 million for the second quarter. The primary reasons for the decrease are the West Phoenix winter period dayrate reduction and the West Venture contract completion.

Operating income for the third quarter was $57.2 million, a decrease of $7.3 million compared to the second quarter operating income of $64.5 million. The decrease is primarily due to the West Phoenix and West Venture as stated above, combined with continued focus on cost savings initiatives.

Net financial items for the third quarter of 2015 amounted to a loss of $47.9 million. The loss included $24.1 million in interest expenses, loss on financial derivatives of $32.6 million, and foreign exchange gain of $8.7 million mainly related to the NOK1,500 million bond loan. The second quarter of 2015 incurred a net financial loss of $20.5 million, including interest expenses of $25.1 million, gain on financial derivatives of $8.8 million, and loss on foreign exchange of $3.4 million mainly related to the NOK1,500 million bond loan.

Income taxes for the third quarter was a $7.9 million expense, compared to a $0.2 million benefit in the second quarter. The change was primarily due to a net tax benefit recognized during the second quarter in respect of return-to-provision ("RTP") adjustments, whereas there was no such adjustment made in the third quarter.