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Bristow making cost, capital efficiency improvements in face of low oil prices

By Vertical Mag | February 6, 2015

Estimated reading time 4 minutes, 38 seconds.

Bristow Group president and CEO, Jonathan Baliff noted that the decline in oil prices has led to a reduction in capital expenditures by most of the company’s clients. Bristow Photo
Offshore helicopter transportation provider Bristow Group is responding to the decline in oil prices by “proactively” helping clients reduce costs, according to president and CEO Jonathan Baliff.
In a statement released with Bristow’s 2015 fiscal third quarter earnings announcement, Baliff noted that the recent rapid decline in oil prices has led to a reduction in capital expenditures by most of the company’s clients.
“We anticipated these developments in the latter half of calendar 2014 and implemented a proactive strategy to help our clients meet their cost reduction objectives,” Baliff stated. “We are also proactively making cost and capital efficiency improvements in partnership with our OEM and lessor partners. This will allow our business model to thrive and capitalize on this environment for our clients, as we continue to execute our growth plan including the startup of the UK search and rescue contract in April 2015.”
Bristow Group on Feb. 5 reported a GAAP net loss for the December 2014 quarter of $1.0 million, or a $0.03 loss per diluted share, compared to net income of $18.9 million, or $0.51 per diluted share, in the same period a year ago. Complete results are available on the Bristow website.
“The December 2014 quarter had similar financial results to our second quarter fiscal year 2015 and for similar reasons,” said Baliff. “In spite of many challenges faced by our clients and employees, we were able to safely deliver top line revenue growth of over 15 percent. This revenue growth, and the continued delivery of significant positive cash flow from operations, drove an over $34 million increase in Bristow Value Added (BVA), improved returns on capital, and $410 million of ending liquidity during the first nine months of fiscal 2015. This BVA and operating cash flow increase in the face of global macro-economic volatility demonstrates the strength of our underlying business model, balance sheet and client relationships.”
Also on Feb. 5, Bristow announced that Bristow Helicopters Australia Pty Ltd. has acquired an 85 percent interest in Airnorth, the largest regional airline operating across Northern Australia. According to Baliff, “This investment strengthens our ability to provide a complete suite of point-to-point transportation services for existing Australian-based passengers and create more integrated, logistics solutions for our global clients.”
The acquisition of Airnorth enables Bristow Australia to extend its existing operations beyond rotary wing to include fixed wing, enhancing the company’s service to clients as an integrated aviation provider. The partnership expands Bristow’s existing oil and gas client base for new business in Southeast Asia, and gains new client segments, including business and leisure passengers traveling to regional and remote communities and resource industry workers.
“Many of our global clients are requesting a fully integrated passenger service, including travel services, as they seek to refocus on their core business,” said Allan Blake, director of Bristow’s Australia Business Unit. “Recent tenders in Australia have requested fixed-wing services, including arranging travel through Bristow Travel (Australia). The potential exists to reduce client costs associated with travel, accommodation and passenger logistics, by providing fixed-wing plus helicopter solutions to our oil and gas clients.”
Airnorth will retain its name and brand identity and will continue to operate under the direction of Michael Bridge, Airnorth’s chief executive officer. Bridge will remain on the Airnorth board of directors. Bristow will have three representatives on the board.
Bristow currently provides fixed-wing services through its affiliates Eastern Airways in the United Kingdom and Líder Aviação in Brazil, and through its business unit in Nigeria.

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