Monday, August 10, 2015
Bristow: No Offshore Rebound, More Cuts to Come
Bristow Group will cut more employees and costs to deal with an oil and gas downturn that won’t rebound until at least late 2017, the company’s head said in reporting the most recent quarterly earnings. President/CEO Jonathan Baliff said Bristow is about 70 percent through a plan to cut costs by $75 to 95 million, including a 10 percent workforce reduction. But that plan was based on a recovery in the offshore transport services market by early 2017. The drop in demand for offshore support is a direct result of the decline in oil prices, which have fallen from more than $100 a barrel at the end of 2014 to less than $50. But since the company does not expect oil prices or demand for offshore services to recover until the end of 2017 at the earliest, it is targeting $60 million more in cost cuts over the next 12 months. The new “economic restructuring” plan includes the consolidation of facilities as well as additional cuts in Bristow’s operations and sales, general and administration workforces. Baliff said changes would be evident within weeks. In its fiscal-2016 first quarter (which ended June 30), Bristow said it had a net loss of $3.3 million, compared to a net income of $44.1 million in the same period last year. Operating revenue rose slightly over that period to $440.1 million from $437.3 million, but operating income plunged 92.6 percent to $4.8 million from $65.2 million in the June 2014 quarter.