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TRANSCRIPT
Earnings Presentation
Fourth Quarter 2014 CEO – Terje Sorensen
2 March 2015
Disclaimer
This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and
uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current
expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries
that are major markets for Siem Offshore (“SIOFF”) and its subsidiaries. These expectations, estimates and projections are
generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important
factors that could cause actual results to differ materially from those expectations include, among others, economic and market
conditions in the geographic areas and industries that are or will be major markets for the Siem Offshore businesses, oil prices,
market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency
exchange rates and such other factors as may be discussed from time to time. Although Siem Offshore believes that its
expectations and the information in this Presentation were based upon reasonable assumptions at the time when they were
made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this
Presentation. Siem Offshore nor any other company within the group is making any representation or warranty, expressed or
implied, as to the accuracy, reliability or completeness of the information in the Presentation, and neither Siem Offshore , any
other company within the group nor any of their directors, officers or employees will have any liability to you or any other persons
resulting from your use of the information in the Presentation. Siem Offshore undertakes no obligation to publicly update or revise
any forward-looking information or statements in the Presentation.
There may have been changes in matters which affect Siem Offshore subsequent to the date of this presentation. Neither the
issue nor delivery of this presentation shall under any circumstance create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or that the affairs of Siem Offshore has not since changed, and Siem
Offshore does not intend, and does not assume any obligation, to update or correct any information included in this presentation.
The contents of this presentation are not to be construed as legal, business, investment or tax advice. Each recipient should
consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice. This
presentation is subject to Norwegian law, and any dispute arising in respect of this presentation is subject to the exclusive
jurisdiction of the Norwegian courts.
2
• Fourth quarter 2014 operating revenue of USD 137.7 million and operating margin of USD
59.7 million (43%), an increase from USD 95.0 million and USD 27.2 million (29%) in fourth
quarter 2013.
• The fleet in operation at the end of the fourth quarter totalled 46 vessels, including partly
owned vessels and two vessels operated on behalf of a pool member. The comparable
number at the end of fourth quarter 2013 was 42 vessels.
• The fourth quarter included an early termination fee of USD 9.0 million following the
cancellation of seasonal work for three vessels in the Kara Sea.
• The Company has conducted a review of vessel valuations and elected to record total costs
of USD 33 million related to certain Brazilian-built vessels, of which USD 29 million is
recorded as an impairment of vessel values and USD 4 million is recorded as a provision in
relation to future operations.
• The subsidiary Siem Offshore Contractors continued the installation of submarine power
cables for two of its projects. Siem Offshore Contractors recorded USD 12.7 million as project
margin on two of its projects.
• Obtained USD 60 million in a Revolving Credit Facility provided by Siem Industries
Inc. 3
Highlights Fourth Quarter 2014
Result and Finance
• The PSV “Siem Symphony” was delivered from a Norwegian yard in November and
commenced a four year contract with Total E&P Norge AS.
• The OSRV “Siem Maragogi” was delivered from a Brazilian yard in December and
commenced an eight-year contract with Petrobras.
• Agreed a three-year contract for the OSCV “Siem N-Sea” (ex. “Siem Stork”) with
commencement 1 January 2015.
• The charterer declared three month extension until 9 June 2015 for the PSVs “Siem Hanne”
and “Sophie Siem”.
4
Highlights Fourth Quarter 2014
Vessel deliveries and contracts
• Petrobras informed in January that the current contracts for four AHTS vessels employed in
Brazil will not be extended following contract expiry during February 2015. Petrobras took
similar actions against all owners whose vessel contracts were expiring. Alternative
employment shall be pursued globally for these four vessels.
• A USD 350 million loan and guarantee facility has been signed for two new well-intervention
vessels (“WIVs”) under construction in Germany. The WIVs are scheduled for delivery during
first half of 2016, and both WIVs shall commence 7-year charters upon delivery from the
yard.
• Agreed a one year contract with Petrobras for the PSV “Siem Giant” with commencement
latest September 2015.
• Daya Materials Bhd. (“Daya”) has been given until mid-April to arrange for financing and to
pay the full 10% deposit on the two 2013-built OSCVs “Siem Daya 1” and “Siem Daya 2”,
which are negotiated to be sold to Daya. The subsequent delivery of the vessels shall
thereafter take place latest by mid July. The recent volatility in the market for offshore vessels
has increased the uncertainty of this transaction to be concluded. Both vessels are on long-
term charters to Daya.
• Debt financing obtained for the three dual-fuelled PSVs under construction in Poland.
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Subsequent Events
Comments to Fourth Quarter Income Statement
• 100% utilisation of the OSCV fleet.
• 6 vessels in operation at the end of the quarter.
• All vessels on long-term charters.
• 94% utilisation of the PSV fleet.
• 11 of the vessels on medium to long-term charters.
• Three PSVs are employed offshore West Africa, four offshore Brazil, three in the North Sea region
and one PSV is on a bareboat charter.
• One vessel came off a firm contract during the quarter.
• One vessel was delivered from yard during the quarter and commenced on a firm contract.
• 74% utilisation of the AHTS fleet.
• 5 vessels operated on term contracts offshore Brazil during the quarter, of which four received
notice that the firm contract would not be extended following expiry in February 2015.
• Two vessels were employed in the Arctic during first part of the quarter before entering the North
Sea spot market.
• One vessel operated on a medium-term contract offshore Morocco during the quarter, before
entering the North Sea spot market.
• One vessel for support for Siem Offshore Contractors.
• One vessel operated in the North Sea spot market during the quarter.
• 92% utilisation for the fleet of smaller Brazilian flagged vessels.
• All 9 vessels operated on term contracts in Brazil during the quarter.
• One vessel was delivered from yard during the quarter and commenced on a firm contract.
6
Operating Margin Fourth Quarter
4Q 2014 4Q 2013
Amounts in
USD million Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
PSVs [2] 30.5 ( 12.3) 18.2 60 % 24.0 ( 11.3) 12.7 53 %
OSCVs 31.9 ( 10.9) 21.0 66 % 16.3 ( 5.5) 10.8 66 %
AHTS vessels[2] 34.7 ( 16.3) 18.5 53 % 32.5 ( 15.0) 17.5 54 %
Smaller Brazilian flagged vessels[1] 5.2 ( 9.1) ( 3.9) 5.4 ( 5.8) ( 0.3)
Scientific core drilling 6.5 ( 4.2) 2.3 36 % 6.4 ( 2.9) 3.5 54 %
Cable installation [2] 30.5 ( 17.8) 12.7 42 % 8.1 ( 6.7) 1.4 17 %
CMS 1.3 ( 1.2) 0.1 9 % 1.3 ( 1.1) 0.2 12 %
Siem WIS 1.8 (0.1) 1.7 0.6 ( 0.3) 0.3
Other 3.8 ( 3.9) (0.1) 0.4 0.0 0.4
G&A 0.0 ( 10.9) ( 10.9) 0.0 ( 19.3) ( 19.3)
Intercompany eliminations [2] ( 8.6) 8.6 0.0 0.0 0.0 0.0
Total 137.7 ( 78.0) 59.7 43 % 95.0 ( 67.8) 27.2 29 %
7
[1] Smaller Brazilian flagged vessels include Oil Spill Recovery Vessels and Fast Supply and Crew Boats
[2] The PSV and the AHTS segment includes I/C revenue from contracting work for the 100% owned subsidiary “Siem Offshore Contractors” . The
offsetting IC opex is included under the Cable Installation segment.
Operating Margin Twelve Months
Twelve Months ended 2014 Twelve Months ended 2013
Amounts in
USD million Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
PSVs [2] 104.4 ( 45.6) 58.9 56 % 94.6 ( 51.7) 42.9 45 %
OSCVs 104.8 ( 33.6) 71.2 68 % 41.4 ( 14.6) 26.9 65 %
AHTS vessels[2] 142.5 ( 65.0) 77.5 54 % 131.9 ( 64.0) 67.9 51 %
Smaller Brazilian flagged vessels[1] 19.4 ( 22.8) ( 3.5) 24.1 ( 17.4) 6.7 28 %
Scientific core drilling 25.9 ( 13.0) 12.9 50 % 36.9 ( 16.5) 20.4 55 %
Cable installation [2] 101.5 ( 84.4) 17.1 17 % 23.2 ( 19.3) 3.9 17 %
CMS 6.1 ( 6.1) ( 0.0) 0 % 8.0 ( 6.6) 1.4 17 %
Siem WIS 2.6 ( 0.6) 2.0 1.6 ( 0.6) 1.0
Other 12.2 ( 7.1) 5.1 2.3 0.0 2.3
G&A 0.0 ( 47.0) ( 47.0) 0.0 ( 50.7) ( 50.7)
Intercompany eliminations [2] ( 28.1) 28.1 ( 0.0) 0.0 0.0 0.0
Total 491.3 ( 297.2) 194.1 40 % 364.0 ( 241.3) 122.6 34 %
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[1] Smaller Brazilian flagged vessels include Oil Spill Recovery Vessels and Fast Supply and Crew Boats
[2] The PSV and the AHTS segment includes I/C revenue from contracting work for the 100% owned subsidiary “Siem Offshore Contractors” . The
offsetting IC opex is included under the Cable Installation segment.
Income Statement Fourth Quarter
Fourth Quarter Twelve Months Ended
Amounts in USD million
2014
Unaudited
2013
Unaudited
2014
Unaudited
2013
Audited
Operating revenue 137.7 95.0 491.3 364.0
Operating expenses ( 67.1) ( 48.5) ( 250.2) ( 190.6)
Administration expenses ( 10.9) ( 19.3) ( 47.0) ( 50.7)
Operating margin [1] 59.7 27.2 194.1 122.7
Operating margin % 43 % 29 % 40 % 34 %
Depreciation and amortisation ( 56.5) ( 20.1) ( 125.9) ( 75.8)
Gain/(Loss) on sale of fixed assets 0.2 1.4 18.7 29.8
Gain of sale of interest rate derivatives (CIRR) 0.1 0.1 0.4 0.4
Gain/(Loss) FX contracts [2] ( 6.6) ( 2.5) ( 3.0) ( 7.8)
Net financial items [3] 19.2 ( 15.2) ( 10.9) ( 51.3)
Profit before tax 16.0 ( 9.1) 73.4 18.0
Income tax provision ( 0.5) 5.4 ( 2.7) 3.6
Net Profit (loss) 15.5 ( 3.7) 70.7 21.5
Net profit attributable to non-controlling interest 2.6 0.1 12.6 ( 0.5)
Net profit attributable to shareholders 13.0 ( 3.8) 58.1 22.0
Earnings per share [4] 0.03 ( 0.01) 0.15 0.06
Average number of shares outstanding [5] 387 591 387 591 387 591 389 078
[1] Operating revenue less operating expenses
[2] Revaluation of off-balance sheet currency contracts entered into in order to hedge both operating expenditures and future yard instalments in
foreign currencies.
[3] Including revaluation of non-USD currency balance sheet items and mark-to-market effects on interest rate derivatives
[4] Net profit / Average number of shares outstanding (diluted)
[5] Weighted average number of shares outstanding (diluted) ('000) 9
Adjusted Net Profit
Fourth Quarter Twelve Months Ended
Amounts in USD million
2014
Unaudited
2013
Unaudited
2014
Unaudited
2013
Audited
Net Profit (loss) 15.5 (3.7) 70.7 21.5
Unrealized (profit) loss on currency derivatives 5.4 (0.8) 5.6 12.2
Unrealized (profit) loss on interest rate derivatives 0.4 (1.6) 0.4 (8.4)
Other unrealized (profit) loss on currency positions (22.9) 2.4 (30.6) 17.2
Adjusted Net Profit (loss) (1.5) (3.6) 46.2 42.6
• Unrealised profit and loss from currency derivatives relates to financial instruments entered into in
order to hedge operational cash flows and future yard instalments in foreign currencies.
• Unrealised profit and loss from interest rate derivatives relates to mark-to-market valuations of
financial instruments entered into in order to manage interest rate risk.
• Other currency positions includes unrealized profit and loss from balance sheet items
denominated in foreign currencies in subsidiaries.
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Financial Position and Cash Flow
Statement of Financial Position
31.12.2014
Unaudited
31.12.2013
Audited
Intangible assets 25.9 29.7
Vessels under construction 130.5 127.7
Vessels, equipment and capitalized project costs 1 754.7 1 451.4
CIRR loan deposits 28.5 41.7
Investment in associates and other long-term receivables 43.7 27.6
Debtors, prepayments and other current assets 159.7 123.4
Cash and cash equivalents 117.6 101.2
Total Assets 2 260.6 1 902.7
Total Equity 823.6 793.9
Borrowings falling due after 1 year 1 087.8 863.1
CIRR loan 28.5 41.7
Other non-current liabilities 38.5 30.4
Borrowings falling due within 1 year 126.6 98.4
Trade creditors and other current liabilities 155.6 75.2
Total Liabilities 1 436.9 1 108.8
Total Equity and Liabilities 2 260.6 1 902.7
Amounts in USD million
• Current cost of debt approximately 4.5% p.a., including the effect of interest rate derivatives.
• Net interest bearing debt of USD 1,097 million.
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Consolidated Statements of Cash Flows
Cash flow from operations
01.01.2014 -
31.12.2014
Unaudited
01.01.2013 -
31.12.2013
Audited
Profit before taxes, excluding interest 117.7 49.2
Interest paid (46.4) (32.3)
Depreciation and amortization 125.9 75.8
Effect of unreal. currency exchange forward contracts 5.6 12.2
Change in short-term receivable and payables 19.9 (17.5)
Taxes paid in the period (9.0) (9.8)
Loss (gain) on sale of fixed assets (18.7) (29.8)
Other changes (10.7) 11.2
Net cash flow from operations 184.3 59.0
Cash flow from investing activities
Investments in fixed assets (525.7) (329.4)
Proceeds from sale of fixed assets 76.3 86.0
Investment in associated companies (11.1) (14.4)
Other investment activities 3.4 5.4
Cash flow from investing activities (457.1) (252.4)
Cash flow from financing activities
Buy back of own shares 0.0 (8.7)
Dividend payment (6.5) 0.0
Proceeds from bank overdraft 5.6 1.0
Contribution from non-controlling interests of consolidated subsidiaries 1.3 0.7
Proceeds from raising of new long-term borrowing 447.7 320.3
Repayment of long-term borrowing (131.9) (128.8)
Cash flow from financing activities 316.2 184.4
Effect of exchange rate differences (27.0) 3.2
Net change in cash 16.4 (5.9)
Cash at bank start of period 101.2 107.1
Cash at bank end of period 117.6 101.2
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Scheduled Debt Maturity Profile 2015 - 2019
14
Comments:
1. The graph reflects committed and assumed mortgage debt for all 8 vessels(1) under construction per end of 4Q 14.
2. Gross debt expected to peak in 2016 based on existing financing and estimated financing for vessels under
construction. Not included any debt repayment in 2015 from potential sale of Siem Daya 1 and Siem Daya 2.
3. Loan to value at low ratios for balloon instalments of mortgage debt (2015 and 2017), i.e. low refinancing risk.
4. Balloon instalment in 2015 of mortgage debt (6 AHTS vessels) can be postponed to 2018 subject to long-term vessel
employment.
5. NOK 600 million (USD 80.7 million) of unsecured bonds with maturity in 2018.
6. NOK 700 million (USD 94.2 million) of unsecured bonds with maturity in 2019.
[1] Only including wholly-owned vessels under construction.
Future Yard Instalments per end 4Q 2014
• The Company has secured mortgage debt
financing for all of its eight wholly-owned
vessels currently under construction.
• The AHTS vessel under construction by
Secunda is not included in the table.
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Amounts in USD million
Future Yard Instalments 2015 2016 Total
OSRVs 10.3 0.0 10.3
PSVs 100.3 77.2 177.5
CLV 62.3 0.0 62.3
WIV 69.1 231.2 300.3
Total 242.0 308.4 550.5
Debt facilities 2015 2016 Total
OSRVs 4.9 0.0 4.9
PSVs (1) 87.3 77.8 165.1
CLV 58.5 0.0 58.5
WIV 34.6 221.3 255.8
Total 185.3 299.1 484.4
[1] Including mortgage debt for 3 x PSVs as a subsequent event.
Comments:
1. The graph reflects; i) future yard instalments for the 8 wholly-owned vessels under construction per end of fourth
quarter 2014, ii) committed mortgage debt (red) and iii) financing gap to be funded by cash from operations/or
issue of bonds.
2. Yard instalments for shipbuilding contracts are normally paid with 20% during construction and 80% at delivery,
alternatively 10% during construction and 90% at delivery.
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Total financing gap for the years 2015 and 2016
of approx. USD 65 million
Future Yard Instalments and Debt Financing - For 2015 and 2016
17
Amrumbank West OWF Baltic 2 OWF Nordsee One Nordsee One OWF
Project
Project phase
Vessel
utilisation
Profit
recognition
Awarded
Installation of 86
submarine cables
providing the inner-array
grid connecting
Commenced on 2nd
installation campaign in
4Q 2014.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
Recorded profit on
Humber Gateway project
in 4Q 2014. Envisages
project completion
during 2Q 2015.
Mar, 2012
Consortium EPIC
contract for the 155kV
export cable system
Nordsee One
Planning, preparation and
engineering. Installation
expected in 2Q 2016.
Utilising the resources
within the Siem Offshore
Group
At minimum 25%
completion, no margin
will be recorded prior to
installation activities,
envisages the project
completion during 2016.
Dec, 2012
Installation of 86
submarine cables
providing the inner-array
grid connecting
Installation progressed
well during 4Q 2014.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
Based on the project
progress, margin
recorded in 4Q 2014.
Envisages project
completion by 4Q 2015.
Feb, 2013
Turnkey EPIC package
of the inner array grid
cable system for 54 wind
turbine generators
Planning, preparation
and engineering
expected complete in 1Q
2015
Utilising the resources
within the Siem Offshore
Group
At minimum 25%
completion1), no margin
will be recorded prior to
installation activities in
2016. Project assumed
completed by 1Q 2017
Apr, 2014
Siem Offshore Contractors - Submarine power cable activities by main projects
[1] The project is currently still subject to financial close, whereby Canada-based Northland Power Inc. has acquired a 85% share
of the project company Nordsee One GmbH from the project developer RWE Innogy GmbH in September 2014.
Siem WIS
• The managed pressure drilling (“MPD”) operation onboard Mærsk Gallant commenced late
October 2014 and was completed mid-January 2015. The pressure control device (“PCD”)
is demobilised due to rig move and will be mobilised again for the Julius project to
commence in second quarter 2015.
• The awarded Gudrun project is currently estimated to commence in second quarter 2015
and Siem WIS is preparing for two offshore operations during second quarter 2015.
• The Valemon project is estimated to commence in third quarter 2015.
18
Vessels in Operation and Shipbuilding Contracts
Employment and Deliveries
Fleet in Operation - Currently 46 Vessels in Operation
20
OSCV AHTS Vessels
Scientific Core Drilling Vessel
# 1
Other
vessels
#10
# 101)
Vessels in operation
Canadian
fleet
# 64)
1) Incl. two vessels owned by a partner
2) Incl. two 51% owned vessels
3) Delivered from yard in November 2014.
4) 50% owned.
# 6
Average age of 4 years
Average age of 2 years
Other vessels # 18
Average age of 7 years
PSV (3,600 – 5,100 dwt) # 122)
Installation
support vessel
# 1
5)
3)
Employment – Vessels in operation
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2015 2016 2017 2018
Vessel Type Ownership 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Siem Sasha PSV 100 %
Siem Sophie PSV 100 %
Siem Louisa PSV 100 %
Siem Hanne PSV 100 %
Siem Carrier PSV 100 %
Siem Supplier PSV 100 %
Hugin Explorer PSV 100 %
Siem Atlas PSV 100%
Siem Giant PSV 100%
Siem Symphony PSV 100%
Siem Pilot PSV 51%
Siddis Mariner 1) PSV 51%
Siem Marlin OSCV 100%
Siem N-Sea OSCV 100%
Siem Daya 1 OSCV 100%
Siem Daya 2 OSCV 100%
Siem Spearfish OSCV 100%
Siem Stingray OSCV 100%
Siem Pearl AHTS 100%
Siem Emerald AHTS 100%
Siem Sapphire AHTS 100%
Siem Aquamarine AHTS 100%
Siem Ruby AHTS 100%
Siem Topaz AHTS 100%
Siem Diamond AHTS 100%
Siem Amethyst AHTS 100%
Siem Garnet 2) AHTS 0%
Siem Opal AHTS 0%
Siem Moxie 3) ISV 100%
Total order backlog in % and USD mill. 52% 205 39% 161 28% 125 14% 72
1) Employment for Siddis
Mariner includes firm time
charter for Siem Offshore
Contractors.
2) Employment for Siem
Garnet includes firm time
charter for Siem Offshore
Contractors
3) The ISV Siem Moxie was
delivered April 2014 and
shall primarily be utilized by
the subsidiary Siem
Offshore Contractors for
cable installation projects
within the offshore wind-
farm segment.
Contract Contract option Spot work Contract with subsidiary
Employment – Vessels in operation (cont.)
2015 2016 2017 2018
Vessel Type Ownership 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Big Orange XVIII WSV 41 %
Joides Resolution SPV 100 %
Burin Sea AHTS 50%
Panuke Sea PSV 50%
Ryan Leet MPSV 50%
Trinity Sea AHTS 50%
Venture Sea AHTS 50%
Scotian Sea MPSV 50%
Total order backlog in % and USD mill. 54% 42 1% 0 0% 0 0% 0
Marati OSRV 100 %
Siem Maragogi OSRV 100%
Parnaiba FSV 100 %
Propriá FSV 100 %
Capela FSV 100 %
Siem Piatã FCV 100 %
Siem Pendotiba FCV 100%
Siem Caetes FSP 100%
Siem Carajas FSP 100%
Total order backlog in % and USD mill. 91% 29 89% 28 89% 20 73% 16
Contract Contract option Spot work
22
2015
1Q 2Q 3Q 4Q
2016
1Q 2Q 3Q 4Q
2017
1Q 2Q 3Q 4Q
Vessels under Construction - 9 Vessels to be Delivered Next 2 Years, including one vessel in Secunda
23
OSRV, Siem Marataizes
CLV, Siem Aimery
PSV DF, Siem Pride
PSV DF, ”TBN 1”
PSV DF, ”TBN 2”
PSV DF, ”TBN 3”
WIV, Siem Helix 1
WIV, Siem Helix 2
AHTS vessel, ”TBN” (Note 1)
Note 1) Vessel under construction in the 50% owned entity Secunda.
Employment - Vessels under construction
24
2015 2016 2017 2018
Vessel Type Ownership 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Brazil, Siem Marataizes OSRV 100%
Poland, Siem Aimery CLV 100%
Poland, Siem Pride PSV 100%
Poland, ”TBN 1” PSV 100%
Poland, ”TBN 2” PSV 100%
Poland, ”TBN 3” PSV 100%
Germany, Siem Helix 1 WIV 100%
Germany, Siem Helix 2 WIV 100%
Poland, ”TBN ” (Note 1) AHTS 50%
Under Construction Contract Contract option
24
Comments:
• The CLV shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable installation projects within the offshore
wind-farm segment.
• Total firm backlog for vessels under construction at approximately USD 795 million as of end of fourth quarter 2014.
Contract with subsidiary
Note 1) Vessel under construction in the 50% owned entity Secunda.
Market Outlook
Market Outlook Summary
• The fourth quarter started with high activity in the North Sea for the AHTS vessels.
During November, the activity level for AHTS vessels in the North Sea was reduced
and it was further reduced during December leaving an oversupplied market both on
the UK and Norwegian side of the North Sea.
• The PSV market started with high activity in October, but rates slowly dropped in
November and December.
• The significant decline in the oil price represents a new market environment for the
whole offshore oil and gas industry, including the oil companies and the total oil
service industry.
• The order-book for additional OSVs in general represents an additional threat to the
already unfavourable market balance for vessel owners.
• The market is expected to be very challenging for a number of years.
26