On Tuesday, Shares of Transocean Ltd. (NYSE: RIG) rose 0.50% to $9.05. The stock traded total volume of 3,787,841 shares lower than the average volume of 12.24M shares.
Transocean Ltd. (RIG) recently stated net loss attributable to controlling interest of $242.0M, $0.48 per diluted share, for the three months ended December 31, 2018.
Fourth quarter 2018 results included unfavorable items of $71.0M, or $0.14Â per diluted share, as follows:
- $18.0M, $0.03Â per diluted share, loss on impairment mainly for three floaters formerly declared for retirement;
- $12.0M, $0.02Â per diluted share, in acquisition costs; and
- $52.0M, $0.11 per diluted share, related to discrete tax expense.
These unfavorable items were partially offset by:
- $11.0M, $0.02Â per diluted share, bargain purchase gain and other favorable items.
After consideration of these net favorable items, fourth quarter 2018 adjusted net loss was $171.0M, or $0.34 per diluted share.
Contract drilling revenues for the three months ended December 31, 2018, sequentially reduced $68.0M to $748.0M because of lower utilization for the company’s ultra-deepwater and harsh environment fleet. In Addition To, fourth quarter results were negatively influenced by unexpected weather-related downtime on two of our harsh environment rigs off the coast of Canada resulting in about $21.0M in lost revenue. Partially offsetting these decreases was a $15.0M increase in revenue from three working rigs attained as part of the Ocean Rig acquisition in December.
Contract drilling revenues included customer early termination fees of $12.0M on the Discoverer Clear Leader in the fourth quarter down from $37.0M in the prior quarter. The fourth quarter also included a non-cash revenue reduction of $34.0M from contract intangible amortization associated with the Songa and Ocean Rig acquisitions. The third quarter non-cash revenue reduction from contract intangible amortization was $29.0M.
Operating and maintenance expense was $497.0M, contrast with $447.0M in the prior quarter. The sequential increase was the result of costs related to the reactivation and contract preparation of Development Driller III and increased activity as a result of the Ocean Rig acquisition.
General and administrative expense was $54.0M, contrast with $35.0M in the prior quarter. The increase was mainly because of professional fees associated with the Ocean Rig acquisition and for developing technology for improving fleet performance and reducing costs and a third quarter legal reimbursement that was not repeated in the fourth quarter.
Depreciation expense was $204.0M, up from $201.0M in the third quarter of 2018. The increase was mainly because of the acquisition of the Ocean Rig fleet.
Interest expense, net of amounts capitalized, was $165.0M, contrast with $160.0M in the prior quarter. The increase was because of the senior notes issued during the fourth quarter of 2018 partially offset by senior secured term loans assumed in the Songa acquisition and stepped down in the third quarter. Capitalized interest was $8.0M in the third and fourth quarters of 2018. Interest income was $17.0M, contrast with $11.0M in the prior quarter.
Cash flows from operating activities increased $24.0M sequentially to $238.0M mainly because of the collection of certain receivables and advance payment for a farmout contract.
Fourth quarter 2018 capital expenditures of $44.0M were related to the company’s newbuild drillships together with capital expenditures regarding asset and inventory management systems, reactivation of one rig and capital upgrades for certain rigs in our existing fleet. This compares with $48.0M in the previous quarter.
Full Year 2018:
For the year ended December 31, 2018, net loss attributable to controlling interest totaled $2.00B, or $4.27 per diluted share. Full year results included $1.60B, $3.48 per diluted share, of unfavorable items as follows:
- $1.50B, $3.13Â per diluted share, loss on impairment of goodwill and eight floaters formerly declared for retirement;
- $143.0M, $0.30 per diluted share, in discrete tax expense;
- $34.0M, $0.07Â per diluted share, in acquisition costs; and
- $3.0M, or $0.01 per diluted share, related to other unfavorable items.
These unfavorable items were partially offset by:
- $10.0M, $0.02Â per diluted share, bargain purchase gain; and
- $7.0M, $0.01Â per diluted share, gain on disposal of assets.
After excluding these net unfavorable items, adjusted net loss for 2018 was $369.0M, or $0.79Â per diluted share.
RIG has the market capitalization of $5.44B and its EPS growth ratio for the past five years was -25.10%. The return on assets ratio of the Company was -8.10% while its return on investment ratio stands at -6.00%. Price to sales ratio was 1.80 while 77.40% of the stock was owned by institutional investors.
