Maersk Supply to divest five more vessels as more red ink spills
Danish offshore vessel provider Maersk Supply Service sank deeper into the red during the third quarter of the year while its revenues were dragged down by lower dayrates and utilization. The company plans to sell another five vessels in the coming period.
Maersk Supply’s parent company, A.P. Moller – Maersk, on Tuesday published its financial report for the third quarter 2017, according to which a structural solution for Maersk Supply Service remains to be defined before the end of 2018.
Namely, from 2017, the group’s Energy business consists of Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers, as well as other businesses (Maersk Training and FPSOs).
In an attempt to separate out its energy businesses, Maersk already sold its oil and gas business and its tanker business. As already reported by Offshore Energy Today, a solution for Maersk Drilling is expected within 12 months while Maersk Supply Service will be handled by the end of next year.
According to the report on Tuesday, Maersk Supply Service booked a loss of $16 million for the third quarter 2017 compared to a loss of $11 million in 3Q 2016 impacted by the general market conditions in the global offshore industry.
The underlying result was a loss of $14m versus loss of $11m in last year’s period driven by fewer legacy contracts offset by a periodically stronger spot market in 3Q.
During the third quarter of this year, Maersk Supply’s revenues dropped to $62 million from $94 million in the same period of last year due to lower rates and utilization.
Going into the fourth quarter, the vessel owner’s contract coverage for the rest of 2017 is 38% and 24% for 2018.
Gross utilization was 52% for 3Q 2017 versus 57% in the corresponding period of 2016.
Outlook to ‘remain subdued’
The industry continues to be characterized by oversupply, financial restructurings and consolidation, and Maersk Supply Service said it expects market outlook for the industry to remain subdued in the near and mid-term. The market demand remains challenged due to the low activity in the offshore industry, and thus the offshore supply vessel industry has approximately 30% of vessels laid up globally, including Maersk Supply Service with 12 vessels laid up end of 3Q, said the company.
Maersk Supply Service initiated a divestment program in 2016 as a response to vessels in lay-up, limited trading opportunities and the global over-supply of offshore supply vessels in the industry. The divestment program is progressing as planned with one vessel shipped for recycling in 3Q, having divested three vessels in total in 2017 leaving the total fleet at 43 with eight vessels still to be delivered. Maersk Supply Service plans to divest further five vessels in the coming six to nine months.
Offshore Energy Today Staff