Impairments Drag Solstad into Red
Oslo-listed Solstad Offshore, has recorded a loss of NOK 1.34 billion ($155.7 million) for the fourth quarter of 2015 due to fleet value write-downs and currency losses.
Namely, Solstad has decided to write down the fleet value by a total of NOK 1,221 million in the fourth quarter. Total impairment for the year was NOK 1,346 million. Impairments are mostly in the PSV and AHTS fleet.
Furthermore, the Group has posted an unrealized currency loss of NOK 142 million in this quarter relating to its long term debt. Additionally, NOK 35 million has been posted as realized currency gain relating to the company’s currency deposit.
Operating revenue for the fourth quarter 2015 dropped to NOK 705 million, compared to NOK 988 million in the year-ago quarter. Decline is mainly related to 9 vessels in lay-up in the 4th quarter and lower utilization.
Operating revenue for 2015 was NOK 3,656 million (NOK 3,836 million, excluding net gain on sale of vessels of NOK 47 million).
Revenues from the construction service segment (CSV) were higher in 2015 due to delivery of two new vessels in June and July 2014. Other segments have, however, experienced reduction in revenues on vessel layups and lower demand.
For the year 2015 Solstad had a loss of NOK 1,58 billion compared to profit of NOK 145 million in 2014.
Solstad’s fleet, as of February, 2016, consisted of 44 wholly owned or partly owned vessels, including 1 new build (CSV).
“The spot market in the North Sea for PSV’s and AHTS’s is still characterized by overcapacity. The expectation from the previous quarter that the demand for this type of vessels would weaken further, with even more vessels in lay-up, has proven to be correct. In the CSV-segment, the activity is still higher, but the day rates are under pressure, and the competition for new contracts is hard.
“The company expect that the market for offshore vessels will remain weak for a longer period. The Group’s fleet has firm contracts for approximately NOK 2.8 billion for 2016. Including charterers options, the value is NOK 3.2 billion. Measured in days the contract coverage is 41% for the same period and 48% including options,” the company said in its earnings report.
Subsea World News Staff