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Thalassa's loss

By BFN News | 07:27 AM | Wednesday 10 June, 2015

Thalassa has swung to a FY pretax loss of $12.23m, from a prior-year profit of $4.96m. Revenue was $15.52m, from $30.55m. The results included $11.71m of total non-recurring costs, against nil in the comparative period. Chairman C. Duncan Soukup described the period as Thalassa's 'annus horribilis.' He continued: "The impact on the oil service market has been brutal as exploration budgets in particular were slashed. In the first quarter of 2015 alone, Schlumberger (SLB, NYSE), the world's largest oil service company, announced 9,000 job layoffs in January 2015 followed by a further 11,000 in April 2015. These personnel cuts have also been matched by commensurate equipment write-downs or disposals. "As a result of these factors, the Thalassa board initiated a Group wide asset review and has taken the decision to write-down all assets which the Board considers are either now overvalued based on replacement cost or which the board believes will not generate sufficient future income to justify their current carrying value. The Board has also decided to expense the research and development costs associated with ARL rather than capitalising them in accordance with IFRS convention. "Furthermore, the Board has decided to take a reserve of US$3.4m against the entire JSC Sevmorgeo ("SMG") receivable, including interest, and will seek legal redress if management is unable to negotiate an acceptable settlement with SMG and its parent JSC Rusgeology ("Rosgeo"). "In this connection, I am pleased to report that discussions have finally begun with Rosgeo, which we hope will lead to settlement of the outstanding trade receivable. "As is always the case when there is as much bad news as was experienced in 2014, both on a macro and micro basis, there is always a silver lining. That silver lining or good news is, in my opinion, very good news. "Excess capacity in the marine seismic market is finally being retired. 3D, 2D and source vessel capacity is being withdrawn so rapidly that a recovery in demand should benefit our Portable Modular (PMSS) solution. "We are also pleased to report that whilst exploration budgets have been slashed, production budgets are being increased to include Permanent Reservoir Monitoring or Life of Field installation surveys. We anticipate that in 2015, RFP's for 3 new North Sea Life of Field projects will be put out to tender. We are quietly confident that we have the best equipment and people for any of these projects." Story provided by

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