Norwegian Shipowners Less Optimistic

Norwegian shipowners have reported a downward shift in shipowner expectations for growth in turnover in 2015.

As shown in 2015 Maritime Outlook report by the Norwegian Shipowners Association (NSA), only a 2.3 pct profit increase is expected by Norwegian shipowners in 2015 from NOK 262 billion to NOK 268 billion.

This is markedly less optimistic than expectations of 6 per cent in last year’s outlook survey.

All four segments- shortsea shipping, deepsea shipping, offshore service and offshore contractors- have lower overall expectations for profitability in 2015 than in 2014, the report shows.

Optimism is greatest in the deep sea segment, with 60 per cent of shipowners anticipating improved operating results in 2015.

Deep sea shipowners anticipate an increase in turnover of 5.1 per cent.

Short sea shipowners have shown stable but modest annual growth, and expect turnover to increase by 2.5 per cent in 2015, bringing their anticipated total to around NOK 20 billion. For 2014 their growth was at 5.5 per cent.

Offshore service shipowners are by far the most pessimistic, with more than three out of four anticipating weaker operating results in 2015.

Offshore service owners expect turnover to fall by 4.2 per cent during 2015, which would mark the first fall in turnover since 2002 for this segment.

Offshore contractors expect a 9.1 per cent growth in turnover in 2015. This figure is high given that investments on the Norwegian Continental Shelf (NCS) are expected to fall by some 10 per cent in 2015, the report said.

According to the report, the downturn was brought on by the financial crisis and the ensuing aftermath of a rush of newbuilding orders before the crisis hit.

“Shipowners are less optimistic about their profitability in 2015 than they were in 2014. 35 per cent of shipowners expect improved operating results, compared with 72 per cent in 2014. In all 42 per cent of shipowners anticipate weaker operating results in 2015, compared with only 8 per cent in 2014,” the report reads.

Orders to Norwegian yards have stagnated as well, with few new orders from the Norwegian international shipowners. The orders are for a large number of offshore service vessels, but also a high number of gas tankers, bulk ships, and chemical tankers.

At the beginning of 2015,  there were 522 ships registered in the NIS, down from 692 in 2005 or  25% over the ten-year period. Over the last five years, around 11 % of ships left the registry, as indicated in the report.