DOF Subsea sees lower profit in 4Q

DOF Subsea, a Norwegian provider of offshore support vessels, posted a slightly lower profit for the fourth quarter of 2015 when compared to the one made in the same period the year before. 

The provider of offshore vessels on Friday reported a profit after tax for the fourth quarter of 2015 of NOK 53 million ($6.2M), while its profit in the same period of 2014 was NOK 63 million ($7.3M).

For the 4th quarter of 2015, the Group achieved an operating income of NOK 1 565 million, a drop when compared to an operating income of NOK 1 931 million for the 4Q of 2014.

Depreciation and write-down amounted to NOK 200 million, an increase when compared to 4Q 2014 and depreciation and write-down of NOK 160 million.

During the fourth quarter the Group saw a seasonal reduction in the activity level especially in the North Sea and in North America.

The vessel utilization in the fourth quarter was 85%, where the project vessel utilization was 74% and the TC vessel utilization was 91%.

As per December 31, 2015, the group’s fleet comprised of 21 owned vessels, 3 chartered-in vessels and 4 vessels under construction in a joint venture with Technip. Of the vessels under construction, the final delivery of the first vessel is expected in April/May 2016.

In order to adjust the group’s capacity to the challenging market conditions, needed cost cutting measures have been implemented during the year and, the company added, the cost cutting measures will continue in 2016.

The organization has been reduced by approximately 290 employees since the start of the year, vessels have been re-allocated between regions in order to secure utilization and chartered-in vessels from 3rd parties have been re-delivered. At the end of December 2015, the number of employees in the DOF Subsea Group was 1 566.

Weak market expected

The company said it expects the challenging market condition to continue in 2016, with an oil price of about $35 per barrel, the current cost focus in the oil industry and increased supply of vessels, a weak market is expected.

DOF Subsea’s contract backlog including options amounts to approximately NOK 39 billion as at 31st of December 2015, equivalent to about 6 year’s turnover and a large portion of the fleet is fixed on long-term contracts with solid counterparts.

However, the group says it is exposed to the short-term market conditions on the subsea project vessels. On these vessels, management is working to increase the backlog.

Offshore Energy Today Staff