Norway: STX OSV Reports Robust Order Intake for First Quarter 2012
STX OSV Holdings Limited, a major global designer and shipbuilder of offshore and specialized vessels headquartered in Norway, reports robust order intake for the first quarter ended 31 March 2012 (“1Q 2012”) amounting to NOK 2.34 billion. As at 31 March 2012, STX OSV’s total order book of 53 vessels is worth NOK 16,036 million.
Operating revenues were slightly lower than for the same period last year (“1Q 2011”), due to normal fluctuations in the project portfolio, and amounted to NOK 2,811 million. The Group’s EBITDA margin (EBITDA to total revenue) held steady at 14.0% compared to EBITDA margin of 13.8% for 1Q 2011.
The robust order intake signals a possible rebound in order activity for high-end offshore support vessels, which experienced a slowdown during the third and fourth quarters of 2011, although the Group has yet to witness a sustained higher level of new order intake.
Mr Roy Reite, Chief Executive Officer and Executive Director of STX OSV, said, “Despite persistent macroeconomic uncertainty, we believe the financing climate has somewhat improved, and funding is available to the strongest customers and the best projects. We see renewed demand for larger, more complex and customized vessels, which caters perfectly to STX OSV’s core capabilities. We remain confident in our ability to seize opportunities in a market upturn, and will continue to invest in technology to reinforce our competitive edge in the industry.”
Financial and Operating Review
STX OSV generated NOK 2,811 million in revenue for 1Q 2012, representing a decline of 12% from 1Q 2011, and EBITDA of NOK 393 million, a 10% decrease. EBITDA margin inched up to 14.0% for the quarter compared to 13.8% in 1Q 2011, on the back of continued stable operations, efficient project execution, and successful delivery of vessels.
The Group has maintained a strong cash position, with cash and cash equivalents of NOK 3,127 million as at 31 March 2012.
The new orders secured during 1Q 2012 have alleviated concerns about possible lower utilization levels at some of STX OSV’s shipyards in 2012. Relatively short delivery times for several of the new projects have led to rapidly increasing workload in Romania.
In Brazil, the existing shipyard is operating at very high load in order to ensure successful execution of projects in the existing order book, and development of the new yard is progressing. Vietnam reports stable operations and on-time delivery of the final vessel in the initial series of six.
Order Book, Deliveries and New Contracts
During 1Q 2012, four new vessel orders amounting to NOK 2,342 million were secured, and five vessels were delivered, bringing STX OSV’s total order book to 53 vessels worth NOK 16,036 million as at 31 March 2012. Of these, 29 are of STX OSV’s own design.
Notably, the new orders for the quarter comprise two Offshore Subsea Construction Vessels (OSCVs) and two large Anchor Handling Tug Supply Vessels (AHTS), all complex projects with contract values above the average of 2011 orders. Since the end of 1Q 2012, STX OSV has secured three additional contracts which include two OSCVs and one AHTS.
Outlook: Market Fundamentals in Place
Going forward, strong market fundamentals are expected to support growth, especially in the subsea support and construction segment, where demand is driven by increased offshore installation activity and growing order backlog for subsea contractors. Charter rates for large anchor handlers have continued their climb, underpinning demand in this segment.
Subsea World News Staff , May 15, 2012; Image: STX OSV