The world's largest operator of helicopters on Thursday said it expected energy-related work to decline further and may cancel some orders for new aircraft.

Bristow Group Inc.'s Chief Executive Jonathan Baliff said continuing uncertainty had forced it to shelve plans to provide full-year profit guidance, as oil and gas companies cut back on exploration and production, reducing demand for helicopter flights.

Even with benchmark oil prices moving above $50 for the first time this year, Bristow shares recently have fallen 27% in price on Thursday and have declined almost 80% over the past year.

Helicopter operators' business is a leading indicator of activity in the energy industry, and Houston-based Bristow is one of two companies serving the global market ferrying workers to and from offshore energy platforms. The other, CHC Group Ltd, filed for bankruptcy protection earlier this month.

Bristow derives three quarters of its revenue from the energy industry, and its revenue from that sector fell 29% in the fiscal fourth quarter to Mar. 31. The company swung to a loss of $33.4 million in the fourth quarter from a profit of $15.8 million a year earlier.

Mr. Baliff said Bristow was "kind of seeing the bottom" in the latest quarter, with a pickup in activity in the North Sea and Asia, though it also saw additional softness in the Gulf of Mexico. The pace of decline in the company's revenue from the energy industry in fiscal 2016 was expected to slow in the current financial year.

Bristow and rivals have been cutting costs, shedding staff and parking helicopters in response to the energy market's downturn, as well as diversifying into areas such as search and rescue services.

The company operates a fleet of 296 helicopters made by units of Airbus Group SE, Leonardo SpA, Lockheed Martin Corp. and Textron Inc.; It has another 28 of the aircraft on order, as well as options to acquire 14 more.

Bristow plans to return some helicopters to lessors when leases expire and has been in talks with manufacturers to defer some deliveries, but Mr. Baliff said during a post-earnings' call with analysts that cancellations were a possibility.

With overcapacity in the helicopter services industry running by some estimates at around 20%, some pressure has been released by the grounding of the Airbus EC225 model helicopter in some countries, following the fatal crash of a CHC-operated aircraft in Norway last month.

Bristow said it had grounded 20 EC225s in the U.K., Norway and Australia and said Brazilian energy company Petró leo Brasileiro SA had also parked seven flown by another operator.

Mr. Baliff said Bristow was flying other helicopter models for longer and taken some out of storage to make up the shortfall.

Write to Doug Cameron at doug.cameron@wsj.com

 

(END) Dow Jones Newswires

May 26, 2016 14:55 ET (18:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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