Reach Subsea Slumps to Loss
- Business & Finance
Norwegian contractor, Reach Subsea, has plunged to a loss in the first quarter 2015 as its results were hit by weak market and low vessel utilisation.
The Oslo-listed company booked a net loss of NOK 9.2 million ($1.2 million) for the period, compared to profit of NOK 3.8 million (approx. $0.5 million) in the first quarter 2014.
This result was reflected mostly due to low utilization for Edda Fonn and the ROV-systems on board Dina Star and Stril Explorer, during the first part of the quarter, and overall industry slowdown.
Reach generated higher revenues during Q1 2015 by having five vessels in operation compared with three vessels in Q1 2014. The company’s Q1 2015 turnover came at NOK 86.6 million compared with NOK 47.9 million in the corresponding period in 2014.
“REACH has-experienced a quite cold winter season compared to last year, though not as cold as budgeted. Many spot fixtures have been done with existing and new clients. However, the rates have been low in a weak market with oversupply of tonnage in most segments,” the company said in its Q1 2015 report.
In addition, Reach announced expansion to other regions than the North Sea by entering into a co-operation agreement with a local partner in a West African country.
Furthermore, Reach said it is in the process of restructuring its charter commitments in a way that will create further flexibility in the business model, and strengthen the company’s ability to exploit opportunities in the market.
The company had five vessels in operation at the end of the quarter: Normand Reach, Edda Fonn, Dina Star, Stril Explorer and Viking Neptun as well as all six WROV-systems and offshore personnel.
At the end of the quarter Reach Subsea reported backlog, close to NOK 400 million and the value of outstanding tenders close to NOK 1 billion.