Solstad Offshore loss swells on vessel impairment charges

Solstad Offshore, a Norwegian offshore service and shipping company, has seen a wider loss in the fourth quarter of 2015, compared to the same period in 2014, due to vessel impairment charges. 

The company on Wednesday posted a net loss of NOK 1.34 billion for 4Q 2015, compared to net loss of NOK 441.1 million in 4Q 2014.

The results include write downs of fixed assets by NOK 1.221 billion, and it is mainly the PSV- and AHTS-fleet that is impaired, the shipping company said.

Further, Solstad Offshore posted operating income of NOK 705 million for the fourth quarter 2015, compared to NOK 988 million in the same period in 2014, and is related to 9 vessels in lay-up in the fourth quarter. Some of the reduction is also due to lower utilization, the Norwegian company added.

In the company’s 4Q report on Wednesday, Solstad Offshore said that the expectation from the previous quarter that the demand for PSVs and AHTS vessels would weaken further, with even more vessels in lay-up, has proven to be correct. The spot market in the North Sea for PSVs and AHTS vessels is still characterized by overcapacity, Solstad added.

In the construction support vessels (CSV)-segment, the activity is still higher, but the day rates are under pressure, and the competition for new contracts is hard, the company further added. The company also said it expects 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, and measured in days the contract coverage is 41%.

The company also stated that its board would propose that no dividends be paid for 2015. Solstad Offshore currently has 3,082 shareholders with approximately 12% owned by foreign investors.

Offshore Energy Today Staff

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