Oslo/ Amsterdam – 28 February 2017. Oceanteam ASA has recorded US$ 11.2 million revenues from operations and an EBITDA of US$ 2.8 million in the fourth quarter of 2016. Although faced with a nett loss of US$ 3.1 million in the fourth quarter of 2016, the Dutch-Norwegian offshore service provider is fully on track for future growth, says CEO Haico Halbesma who reached an agreement on new terms with its bondholders after 2016 year ending. As a result, Oceanteam ASA, will have a significantly improved free cash flow and structural lower interest costs as from January 1st 2017, creating a healthy foundation for further growth.
Financial restructuring creates new foundation for future growth
Main financial indicators Q4-2016
- Revenues from operations US$ 11.2 million
- EBITDA: US$ 2.8 million
- Profit from operations: US$ - 1.5 million
- Net finance (negative): (US$ 2.4 million)
- Net profit/ (loss): (US$ 3.1 million)
Major events in Q4- 2016
- Oceanteam ASA appointed Wilhelm Bøhn (48) as CFO
- Oceanteam ASA initiates financial restructuring through constructive dialogue with its banks and bondholders
- Simultaneously, the company informed bondholders of the deferral of interest payment on Senior unsecured Bond
In the fourth quarter 2016 (hereafter indicated as Q4), the Company's operations met performance forecasts under very challenging market conditions. The company also made solid progress in terms of increasing the share of revenues from its Solutions division, which came in at 40% in Q4 underlining the success of its market diversification strategy.
For Oceanteam, Q4 was a combination of business as usual and preparing the company for a future of high performance and returns. "The management and the teams of our operating companies were very much focused on their day-to-day market opportunities and challenges. These included securing our vessel charter rates and current backlog and tendering for new contracts, especially in the field of equipment and engineering solutions. Additionally, they were exploring new opportunities in areas such as renewable energy and civil engineering.
In late October 2016, the Executive Board and management initiated proactive and constructive talks with our bondholders and banks to discuss a new capital foundation for the company.
Wilhelm Bohn, recently appointed as CFO of Oceanteam ASA, comments: "We expect to announce the new terms we have since agreed with our bondholders shortly after the publication of the Q4 press release and Q4 report. We believe the new agreement reflects the firm belief all the stakeholders involved have in the future direction and proven track record of our company. Thanks to the agreement with its bondholders and including the sale of the North Ocean 105 (expected effective no later than 1 May 2017), Oceanteam ASA has secured the financing it needs and safeguarded its continuity as a going concern."
The current state of the Oil & Gas market is expected to remain challenging for the coming period, according to the Company.
"However, our early focus on Offshore Renewables, Engineering & Logistic Solutions, plus our expansion in certain geographical areas, will help the company to safely navigate the current market low, as well as the structural changes in the Oil & Gas market", comments CEO Halbesma. "We are also in the process of creating new revenue sources in the field of civil engineering, offshore-related logistic solutions, while using the same core capabilities that have made Oceanteam the distinguished niche player it is known as today.
Major events and developments (Q4 - 2016)
- Fugro NV retains charter contract on CSV Southern Ocean rather than transfer it to a subsidiary of Fugro NV
- Oceanteam's subsidiary Diavaz-Oceanteam Shipping (DOT) has come to an agreement with seller Pacific Radiance to postpone the delivery of the CSV Tampamachoco 1 (T1) for one year with option for second year.
Major subsequent events (Q1 - 2017)
- Oceanteam ASA reaches an understanding with its bondholders on the main terms of the bond loan.
- Oceanteam releases joint-venture partner McDermott intention to utilize its option to exercise its option to purchase Oceanteam's 25% ownership in the vessel-owning company North Ocean 105 AS by the end of April 2017.
Operations North Ocean fleet
CSV Bourbon Oceanteam 101: after successfully completing a long-term charter with Oceaneering and BP Angola, has completed a dry dock period and started a new time charter contract in Angola. The contract is for a period of three years plus options. The terms remain confidential, but the new charter rate reflects the current rate levels within the market.
CSV Southern Ocean: has been on long-term bare boat charter with Fugro TSM Australia since its delivery in 2010. The vessel will remain under contract by Fugro TS Marine Australia until the end of 2018 and has options for extension.
Lay Vessel North Ocean 105 was delivered in 2012 and has since been on a five-year contract with McDermott International and operates globally as a pipe layer.
Oceanteam Mexico SA de CV operates two Fast Support Vessels (FSV's), the Tiburon and Mantaraya. The vessels are currently available, will go into dry dock and will be ready to commence new contracts by May 2017.
In March 2014 Oceanteam took a 40 percent stake in the newly founded joint venture DOT Shipping together with Diavaz. DOT Shipping successfully delivered two FSV newbuilds, named Icacos and Cobos, in Q4 2014 that immediately began operating in Mexico. Both vessels are fully financed and have been operational in the Mexican market since March 2015, where they operate under a seven- year firm time charter contract with three one-year options for extension.
DOT Shipping has a 50 percent stake in a large new-build construction support vessel, named Tampamachoco 1, which is ready but DOT deferred delivery with 1 year plus option for another year delay..
Oceanteam Solutions is specialised in building demountable turntable systems that easily can be delivered in 40ft containers to all ports globally. The company designs and produces turntables in various sizes, for onshore and offshore use and for a variety of cables, umbilicals, pipes or flowlines. The Company provides full engineering design and consultancy services to clients in the oil and gas and renewables industries. Oceanteam Solutions can also provide services for complex structures both onshore and offshore. With the in-house engineering experience and expertise, clients can contract the most effective vessel and equipment solutions for their projects.
Over the years Oceanteam Solutions has built up a broad client base worldwide, to which the company successfully supplies equipment and supports the client's offshore cable, pipeline and umbilical installations, transport and storage projects. From our base with deep-water quayside facilities in Velsen-Noord, the Netherlands, the company can accommodate all sizes of vessels for mobilisation and demobilisation with easy access to the North Sea.
Oceanteam Solutions had an average of 100 engineers who worked on multi discipline service contracts during the quarter.
Main operational projects Oceanteam Solutions (Q4 - 2016)
- Large cable splicing and jointing started involving multiple disciplines and equipment with an expected duration of 6 months.
- Supply of full cable installation spread to Offshore Wind client.
- Multiple cable storage contract ongoing.
- Various multi discipline design engineering contract ongoing.
- World's largest Ferris Wheel design, construction, lifting support continues to create significant amount of work.
- Phase 1 Offshore Wind Park design in China completed and commenced phase 2
The main factor in the market outlook is the turmoil in the oil price. The volatile environment for oil and gas prices and activity has created significant market challenges for our industry, but also opportunities. With the Company's expertise in combining engineering, shipping and equipment, the Company is ready to add more value for our clients.
OCEANTEAM ASA - Q4 2016 REPORT
OCEANTEAM ASA - Q4 2016 PRESENTATION