Weakening of US dollar has helped the Norwegian shipowner Farstad to bounce back to profit during the first quarter of 2016.
Farstad’s profit after taxes (PAT) was NOK 94.2 million, versus the loss of NOK 304.2 million a year earlier.
To remind, Farstad also recorded net loss of NOK 1.32 billion for the prior quarter on impairments of NOK 1 billion, and also booked a loss of NOK 2.17 billion for the full year 2015.
However, for the first quarter 2016, Farstad recognised an unrealised currency gain of NOK 272.8 million (loss NOK 266.5 million) as a result of the adjustment of its long-term liabilities in foreign currency. In addition, currency losses of NOK 57.1 million were also recognised during the quarter.
The company achieved operating income of NOK 827.2 million for the first quarter, down from NOK 1 063 million in Q1 2015.
The company’s largest shareholder with 40.5% remains Tyrholm & Farstad AS. Diluted profit per share was NOK 2.42.
Farstad Shipping’s subsea fleet currently consists of 6 vessels and 1 under construction, scheduled for delivery in November this year.
At the end of Q1 2016, Farstad reported a total backlog (excl. options) of approximately NOK 5.2 billion and 1885 employees in total.
“Even though we have experienced a recovery of the oil price during 1st quarter, there has been no improvement in the fundamentals for the offshore oil services industry. The market conditions are still challenged by the continued declining activity, and the ongoing cost reduction programs within the oil companies. All regions and markets are characterised by unsustainable rate levels resulting in an increasing number of offshore service vessels being laid up.
“There is still considerable uncertainty as to how long it will take before the offshore activity recovers. And when it recovers, the supply vessel owners will face the challenge of tonnage oversupply. Despite the fact that the contracting activity of new vessels has stopped, there is still a significant number of offshore vessels on order,” the company said in its earnings report.
Subsea World News Staff