Danish offshore shipowner Maersk Supply Service (MSS) has posted a deeper net loss for the first quarter of 2017 due to lower utilization and lower rates.
The offshore vessel owner said in its financial report posted on Thursday that revenues decreased to $48 million in 1Q 2017 compared to $110 million in the first quarter of 2016.
The company’s loss deepened by $20 million for the quarter, standing at $22 million, compared to a $2 million loss for the same period last year.
The Danish firm said it was able to reduce its total operating costs to $53 million for the quarter against the $74 million in 1Q 2016 due to fewer operating vessels and reduced running cost.
Cash flow used for capital expenditure was $108 million due to the delivery of anchor handling tug supply (AHTS) newbuild Maersk Master, leaving the total orderbook at nine vessels. Of those nine, five are AHTS vessels and four are subsea support vessels.
During the quarter, Maersk Supply Service recycled two vessels leaving the total fleet at 44 vessels. The company said it was planning to divest or recycle an additional seven vessels over the next 12 months.
The offshore vessel provider said that going into 2Q, contract coverage was 23 percent for 2017 and 7 percent for 2018 with utilization at 54 percent in 1Q, an eight percent decrease from 1Q 2016.
Low demand in near and mid-term
Providing its take on the offshore supply vessel market forecast, the Danish company said that market demand remained low due to the low oil price and the general market outlook for the industry would remain subdued in the near and mid-term. Maersk added that the industry is currently characterized by financial restructurings and consolidation.
The company also stated in its financial report that the offshore supply vessel industry continues to see a large number of vessel lay-ups globally and that Maersk Supply Service had eight vessels laid up at the end of 1Q.
The company highlighted that its new Integrated Solutions business is underway, as well as its long-term partnership agreement with Oceaneering which will provide remotely operated vehicles to be installed on board MSS vessels.
While awaiting better days in the oil sector, MSS is also looking at offshore markets outside of the oil and gas sphere.
The company has recently secured a partnership with DeepGreen Resources to support a deep-sea mineral recovery project in the Pacific Ocean.
“For Maersk Supply Service this is an opportunity to utilize a newbuild vessel for an ultra-deep water subsea operation in a new market that will be supported by specialized assets,” the company said.
Offshore Energy Today Staff