The seismic data survey industry appears to be sinking; can Norwegian company PGS ASA stay afloat in 2021 in the midst of an oil price crisis?
Exploration-focused oilfield service (OFS) companies faced perhaps the largest demand decline in the summer and autumn of 2020, as a result of oil and gas producers cutting their CAPEX and operating expenditure after a worldwide price collapse in April.
PGS ASA has been hit hard, now sporting a "C" long-term rating from Fitch and a "Caa1" rating from Moody's. It's also now at a FRISK® score "1," indicating up to 50x the probability of bankruptcy as the average publicly traded company:
When it comes to predicting public company stress, several metrics can be used to illuminate the signs of financial stress that payment trends cannot foresee. Since the FRISK® score leverages the information provided by four key metrics – stock market capitalization and volatility, financial ratios, bond agency ratings, and crowdsourced CreditRiskMonitor subscriber usage data – it is able to predict public company risk with market-leading accuracy (a 96% capture rate).
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at nearly 40% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About High Risk Reports
Our High Risk Reports feature companies that are exhibiting a significantly high level of financial distress, as indicated by our proprietary FRISK® score.
The reports highlight the factors that have pushed a company's score lower on the "1" (worst) to "10" (best) FRISK® score, which is 96% accurate in predicting bankruptcy over a 12-month period. The High Risk Reports also includes analysis on financial indicators such as the company’s DBT index, stock performance, financial ratios and how it is performing relative to its industry peers.
The ultimate goal of the High Risk Report series is two-part: provide an early warning for those doing business with an increasingly distressed company and inform of the many signals that should be examined when assessing financial risks.