Transocean reports $2.21 billion net loss after rig writedowns

Transocean reports $2.21 billion net loss after rig writedowns

JILLIAN WARD

ZUG, Switzerland (Bloomberg) -- Transocean Ltd., the largest owner of deepwater drilling rigs, reported a third-quarter loss of $6.12 per share after taking one-time charges of $2.57 billion related to the value of its fleet.

Transocean delayed publishing its earnings last week after announcing the writedowns, prompted by a slowdown in oil exploration after this year’s decline in crude prices.

The drop in demand for rigs was evident in the Vernier, Switzerland-based company’s revenue, which fell to $2.27 billion for the three months through September from $2.45 billion a year earlier. An increase in out-of-service time and higher operating and maintenance expenses contributed to the decline, the company said in a statement.

The company faces relative oversupply after a period that saw the biggest batch of orders for rigs since the beginning of deepwater drilling in the 1970s. Oil’s decline to a four-year low has caused companies to consider spending cuts, which would further reduce demand for rigs and the rates Transocean can charge to lease them to exporters.

After the one-time items, Transocean’s net loss attributable to controlling shareholders was $2.21 billion, or $6.12 per share, compared with a profit of $546 million a year earlier. After taking out one-time items, adjusted earnings from continuing operations were $352 million.