Sovereign Oilfield Group, an Aberdeen-based oilfield services group, has reported turnover of GBP28.2m for the six months ended September 30, 2009 compared to GBP30.8m for the same period prior year.
Earnings before interest, depreciation, amortisation and exceptional items was GBP0.5m compared to GBP1m in the year ago period. Operating loss before exceptional items was GBP0.1m compared to operating profit of GBP0.8m in the prior year period.
The six-month pre-tax loss, excluding exceptional items, stood at GBP1.6m compared to GBP2.3m in the same period last year. The basic and diluted loss per share was 9.52 pence per share compared to 6.91 pence per share in the prior year period.
For the period, gross profit was GBP6.8m as compared to GBP7.4m for the year ago period. The gross margins remained stable at 24.1% as compared to 24% in 2008 period.
Exceptional items of GBP1.7m relating were incurred in the period, which comprised GBP1.8m relating to impairment of leasehold improvements of Oil Middle East, GBP0.4m relating to refinancing and restructuring costs, GBP0.1m relating to severance arrangements and a profit of GBP0.6m on the sale and leaseback of property.
The company said that in line with its strategy, it has disposed of Diamant Drilling Services , Vertec Engineering and the cabin rental business of Labtech Services, Prodrill Engineering, four properties, and some of the assets of Sovereign Fishing and Remedial Services.
In September 2009, the board resolved to discontinue the activities of Fingolden and its trading subsidiary RDT precision Engineers, Maxwell Downhole Technology and Sovereign Fishing and Remedial Services, as a result of these companies being consistently loss making.
Additionally, the board has committed to a plan to sell Serco, with proceeds of such disposal being used to repay the company’s existing debt. The contribution of these companies to the results for the six months ended 30 September 2009 have been classified as discontinued operations.
The board is continuing to pursue further strategic disposals to focus the group as a fabrication business and have resolved to discontinue or dispose of all companies within the Drilling Division.
The board are also continuing its cost reduction plan, particularly with regard to corporate overhead, with a view to a reduction in overall borrowing to a level that can be satisfactorily serviced by a smaller group.