Danish offshore shipowner Maersk Supply Service (MSS) narrowed its net loss in the second quarter of 2017, despite lower revenues, compared to the prior-year period when the company recorded impairments of $97 million.
The offshore vessel owner said in its financial report on Wednesday that its loss was reduced to $10 million in the second quarter 2017, compared to $106 million for the same period last year.
The result in the last year’s second quarter was negatively impacted by an impairment of $97 million. On the other hand, the underlying loss for this year’s second quarter was $11 million versus a loss of $8 million in the last year’s quarter.
Further, the company’ revenues decreased to $74 million in 2Q 2017 compared to $102 million in the second quarter of 2016, following lower utilization.
Cash flow from operating activities decreased to negative $17 million compared to a positive $7 million in 2Q 2016, reflecteing a lower result and an increase in net working capital. Cash flow used for capital expenditure almost doubled in comparison to last year’s second quarter and stood at $33 million relating to assets under construction.
During the quarter, Maersk Supply Service sold one vessel leaving the total fleet at 43 vessels and is planning to reduce its fleet by further six vessels over the coming nine months.
MSS said that going into 3Q, the contract coverage was 26% for 2017 and 15% for 2018. Gross utilization for 2Q 2017 was 56%, slightly lower than the 61% seen in 2Q 2016.
Market demand still on the low side
When discussing the OSV market, the company said the market demand remained low due to low activity in the offshore industry given the low oil price.
“Maersk Supply Service expects the general market outlook for the industry to remain subdued in the near and mid-term. The industry continues to be characterized by oversupply, financial restructurings, and consolidation. In line with market decline, the offshore supply vessel industry continues to see 25% of vessel lay-ups globally, including Maersk Supply Service that had ten vessels laid up at the end of Q2,” the company said.
Offshore Energy Today Staff