Rowan Companies plc (RDC) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $5.50 million, or $ 0.04 a share in the quarter, against a net loss of $239.40 million, or $1.92 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $38.40 million, or $0.30 a share compared with $111.40 million or $0.89 a share, a year ago.
Revenue during the quarter plunged 30.44 percent to $379.40 million from $545.40 million in the previous year period. Gross margin for the quarter contracted 363 basis points over the previous year period to 50.98 percent. Operating margin for the quarter period stood at positive 8.86 percent as compared to a negative 31.28 percent for the previous year period.
Operating income for the quarter was $33.60 million, compared with an operating loss of $170.60 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $168.70 million compared with $265.90 million in the prior year period. At the same time, adjusted EBITDA margin contracted 429 basis points in the quarter to 44.46 percent from 48.75 percent in the last year period.
Tom Burke, president and chief executive officer, commented, "While revenues are under pressure given the weak activity levels worldwide, I am pleased with Rowan's response to this cyclical downturn. Our focus on continuous improvement has once again yielded exceptional operational performance with our fifth consecutive quarter of operational downtime of less than 2% and strong safety results. We have also continued to reduce costs, allowing us to build substantial liquidity and solidify our competitive position."
Operating cash flow improves marginally
Rowan Companies plc has generated cash of $688.60 million from operating activities during the nine month period, up 4.51 percent or $29.70 million, when compared with the last year period.
The company has spent $87.40 million cash to meet investing activities during the nine month period as against cash outgo of $669.70 million in the last year period.
The company has spent $47.90 million cash to carry out financing activities during the nine month period as against cash outgo of $37.90 million in the last year period.
Cash and cash equivalents stood at $1,037.50 million as on Sep. 30, 2016, up 257.14 percent or $747 million from $290.50 million on Sep. 30, 2015.
Working capital increases sharply
Rowan Companies plc has recorded an increase in the working capital over the last year. It stood at $828.80 million as at Sep. 30, 2016, up 60.10 percent or $311.12 million from $517.68 million on Sep. 30, 2015. Current ratio was at 2.22 as on Sep. 30, 2016, down from 2.62 on Sep. 30, 2015.
Days sales outstanding went up to 114 days for the quarter compared with 85 days for the same period last year.
At the same time, days payable outstanding went up to 48 days for the quarter from 43 for the same period last year.
Debt comes down
Rowan Companies plc has recorded a decline in total debt over the last one year. It stood at $2,645.60 million as on Sep. 30, 2016, down 5.74 percent or $161.09 million from $2,806.69 million on Sep. 30, 2015. Short-term debt stood at $357.10 million as on Sep. 30, 2016. Total debt was 30.53 percent of total assets as on Sep. 30, 2016, compared with 33.65 percent on Sep. 30, 2015. Debt to equity ratio was at 0.51 as on Sep. 30, 2016, down from 0.60 as on Sep. 30, 2015.
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