Dutch offshore and dredging services provider Boskalis, posted a net profit of 147.5 million euros in the first half of 2016.
The company’s profit plunged when compared to the same period of 2015, when Boskalis reported a net profit of $306 million. Revenue was down to 1.17 billion euros, down from 1.57 billion a year ago.
Whereas the first half of 2015 was extremely busy, revenue declined in the first half of this year as a result of the deteriorated market conditions, Boskalis said.
Peter Berdowski, CEO Boskalis said: “At the start of the year we indicated that we are experiencing stormy conditions. Falling prices of oil, gas and commodities are the dark clouds on the horizon that ultimately also affect late-cyclical companies such as Boskalis. The volume of work in the market has dropped significantly and a decline in revenue and the result is therefore inevitable.”
Providing a take on the offshore energy segment of its business, Boskalis said that a number of long-term contracts and work already contracted provide stability for part of the fleet, but the spot market-related transport activities and subsea services are experiencing pressure on utilization rates and margins.
Berdowski said: “We foresee that the current market environment may persist for several years. We have therefore taken the necessary steps to adjust the size and composition of the fleet to this new reality. As previously announced we will take 24 vessels out of service in the 2016-2018 period and consequently have to let go of a large number of employees. These are drastic measures that unfortunately need to be taken to ensure that Boskalis remains healthy going forward.”
The decision to take the vessels out of services will lead to the loss of 650 jobs. Out of 24 vessels to be taken out, 14 come from the offshore energy business.
Offshore Energy Today Staff