Oilfield companies supplier Schlumberger took an $eight.5 billion cost within the first quarter of the yr rocked by the low oil value setting and the coronavirus pandemic.
Schlumberger mentioned in its report on Friday that its worldwide income in 1Q 2020 was $7.5 billion, a 9 per cent lower sequentially and 5 per cent lower year-on-year.
The firm’s loss earlier than taxes for 1Q 2020 amounted to $eight.1 billion in comparison with a revenue of $509 million in the identical interval of 2019.
Schlumberger’s internet loss totaled $7.four billion in 1Q 2020 versus a $421 revenue in 1Q 2019.
According to the oilfield companies supplier, the primary quarter outcomes included an $eight.5 billion pretax cost primarily referring to the impairment of goodwill, intangible property, and different long-lived property.
This virtually totally non-cash cost was pushed by the numerous decline in market valuations throughout March.
Schlumberger CEO, Olivier Le Peuch, commented: “First-quarter income of $7.5 billion declined 9% sequentially and 5% year-on-year because the unprecedented international well being and financial disaster sparked by the COVID-19 pandemic more and more impacted business exercise through the quarter.
“The impact of this was amplified late within the quarter by a brand new battle for market share between the world’s largest oil producers. This double black swan occasion created simultaneous shocks in oil provide and demand leading to essentially the most difficult setting for the business in lots of a long time”.
Due to the present difficult market circumstances, Schlumberger is implementing price management and money self-discipline.
With that in thoughts, Schlumberger determined to scale back its structural and variable prices, and restructure group to match exercise the place needed.
This consists of furloughing personnel, reducing salaries, reducing headcount, and shutting services.
In addition, the board and government officers have voluntarily agreed to reductions of their money compensation and the corporate decreased its dividend by 75 per cent.
Schlumberger has additionally decreased its capital funding program by greater than 30 per cent and can allocate sources to the extra resilient markets.
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