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Wednesday, August 12, 2015

N. Sea Spares Woes Cost Bristow $12M

"Disappointing" spares support for its North Sea helicopter operations cost Bristow Group $12 million in the quarter that ended June 30, the company says. Although operating revenue for the quarter—the first in Bristow’s fiscal year—improved over first-quarter 2014, the company reported a $3.3 million net loss (compared to a net income of $44.1 million in the same period last year). "We expected to do better in this quarter, from an earnings standpoint especially," said Bristow President/CEO Jonathan Baliff Aug. 7. Oil-and-gas support revenues dropped faster than expected in the quarter, Baliff said, but the company had cut costs to compensate and would have been on track for the quarter if not for the $12 million in unexpected costs in the North Sea (and a $4 million bad-debt write-off in Africa). The higher North Sea costs were "due to what I consider disappointing partnership with our OEMs" in regards to spare parts, aircraft availability and "a number of other things," Bailiff said. Some of those costs related to inadequate support under power-by-the-hour contracts, he and SVP/COO Jeremy Akel told financial analysts. Baliff emphasized that Bristow is responsible for managing its business. "I don’t want to blame the OEMs for something that we could mitigate and will mitigate in the future," he said. But he also said the "disappointing relationship" is the subject of ongoing discussions with senior executives at the OEMs.
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