Bristow results for quarter to December 2015 make mixed reading

Bristow Group has revealed its results for the quarter to 31st December 2015, and with low oil prices, they make unhappy reading. They will not be the only operator in this situation.

Revenues from Bristow’s oil and gas operations fell 21.2% on the same quarter in 2014. Some of this was because of foreign exchange changes particularly with UK Pound, Norwegian Kroner and Australian Dollar.

The company’s diversification info fixed wing operations in both the UK and Australia – with Eastern Airways and AirNorth respectively – has, ironically, benefitted from the low fuel prices. At the Helicopter Investor conference last week, it was clear that leasing companies with a balanced portfolio were being impacted a lot less by the signficant drop in oil and gas production flights being experienced in the helicopter industry.

UK Search and Rescue is helping Bristow revenues as the 10 bases come on stream. With Prestwick and Newquay recently added, there is only one base remaining to transition into the group – Lee-on-Solent, currently run by CHC under the “Gap SAR” contract.

Ongoing delays with the approval of the Full Ice Protection System on the AW189 should be resolved in the June/July timeframe according to Roberto Garavaglia, the SVP for Sales and Marketing at Finmeccanica Helicopters, in conversation with Helicopter Investor last week.

In its Africa region, Bristow operating income decreased by $22 million compared to the prior year quarter, and the operating margin fell from 30.6% right down to 7.1% year-over-year.

In the Americas, operating revenue was down by $15.9 million due to a decline in the number of small and medium aircraft on contract and reduction in flight hours for large aircraft in the Gulf of Mexico. Additionally, the group’s interests in Brazilian operator Lider led to a decrease of $1.7 Million in lease revenue. In Australia it was a mixed story, with revenues up by $8.5 million from new work such as the INPEX contract, but then offset by $10.5 million less due to cancelled short term agreements.

All offshore operators are being hit significantly by the crude oil price, and their success at weathering the next few years will be more dependent on their ability to adapt, the diversification of their income streams and the impact of longer-term agreements signed 2010 to 2014. Nobody is forecasting the oil price to rise any significant amount, and it is clear the low prices are the new norm.

Helicopter Investor estimates that 30% of the global offshore helicopter fleet is parked.

 

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