Era raises margin despite tough market
“To paraphrase Mark Twain, reports on the death of the Gulf of Mexico offshore market have been greatly exaggerated. At least as it relates to helicopter services. The number of working floating drilling rigs in the Gulf of Mexico is higher today than it was at the same time last year,” said Chris Bradshaw, CEO and CFO of Era Group, on an upbeat analyst call.
Braddshaw added: “Although overall activity levels in the Gulf of Mexico are down from the peak, we believe it remains one of the best, if not the best offshore helicopter markets in the world.”
Era reported impressive results for its second quarter and and also announced the acquisition of Columbia’s Sicher Helicopters. He says they are now the only global operator active in Columbia.
Era Group announced an impressive profit of $11.3 million for its second quarter of 2015, compared to $5.2 million in the same quarter of 2014.
As well as buying Sicher, Era sold its Alaska fixed base operation (FBO) business for $14.3 million to Landmark Aviation.
Without the sale of the Alaskan FBOs, Era’s EBITDA was $20.5 million compared to $22.4 million. This gave it an astonishing 29% margin compared to 26% in Q2 2014. Its net income would still have been $4.1 million.
Era also sold five single engine helicopters in the quarter. It made cash proceeds of $3 million and net losses of $0.2 million. The operator booked a small gain on two helicopters – both less than 10 years old – but made losses on the three older assets.
Era bought 75% of Sicher for $3.2 million in cash and a AW139 helicopter that the Columbian company will operate. The remaining 25% will stay with Sicher’s founder. Sicher has three light twin helicopters and one single engine helicopter. At the moment much of Sicher’s business is involved in seismic exploration but Era expects this to change as Columbia’s oil and gas industry grows.
Like all of the major operators, Bradshaw was keen to stress how 80% of Era’s oil and gas business supports production. Era is also the most diversified of the three major operators. “We like the diversity that the other end markets provide. We like that we have exposure to the air medical market,” said Bradshaw. “We like that we have a flightseeing business in Alaska. We like our dry-leasing business. We are continuing to pursue non-oil and gas opportunities, not just in the US, but in the other markets in the Americas in which we operate and certainly will capitalize on demand from other end markets outside the Americas via our dry-leasing business.”
Bradshaw also expects that by next year Era’s utilisation will be back to three year highs.