Electromagnetic Geoservices ASA (EMGS) has been advised by a customer that it will not, in the near to medium future, receive additional acquisition work under the two-year acquisition contract announced to the market on 4 June 2019.
It is the EMGS’s understanding that the customer’s decision is related to its own strategic priorities, and not related to EMGS’ performance under the contract.
EMGS has previously assumed that substantial new acquisition work under the two-year contract would be forthcoming within the near future. The decision by the customer not to order additional acquisition work, at least for the near to medium future, will have a material detrimental effect on the EMGS’s revenue and profitability going forward.
The board of directors of the Company is evaluating all strategic options available.
EMGS will therefore immediately initiate a comprehensive cost reduction programme to adjust the Company’s operational cost base to the new confirmed backlog level
The news was announced in an e-mail sent out from EMGS on February 20.