Seadrill Limited announces second quarter 2015 results. Revenues were $1,147 million compared to $1,244 million in the first quarter of 2015.
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Operating profit for the quarter was $384 million compared to $703 million in the preceding quarter. The decrease was primarily due to the gain on deconsolidation of SeaMex during the first quarter, and a loss on the sale of the West Polaris to Seadrill Partners during the second quarter.
Taken together, these items account for approximately $261 million, or 82%, of the sequential decline in operating profit. Excluding these non-recurring items, operating profit declined 11% sequentially.
On a like for like basis, the decline in operating profit can be primarily attributed to the deconsolidation of SeaMex and increased idle time across the fleet.
The loss on disposal is related to the dropdown of the West Polaris to Seadrill Partners. Seadrill's accounting policy is not to recognize any contingent forms of consideration before they are realized.
This has resulted in an initial loss on disposal despite an expectation of additional contingent consideration to be received in the future in excess of the loss.
Net financial and other items for the quarter showed a gain of $84 million compared to a loss of $197 million in the previous quarter. The change in financial items was largely impacted by the sequential change in derivative financial instruments which accounted for $225 million of the quarter over quarter change in financial items.
The movement was also driven by Seadrill's share in results of associated companies, which includes the share of Seadrill Partners' net income. The increase is primarily related to favorable unrealized mark to market revaluations of derivatives within Seadrill Partners.
Income taxes for the second quarter were $45 million, a decrease of $13 million from the previous quarter. The change was primarily due to a net tax benefit recognized during the quarter in respect of return-to-provision ("RTP") adjustments, offset by higher relative components of our estimated 2015 earnings.
Net income for the quarter was $423 million representing basic and diluted earnings per share of $0.77. ■