· Additional adjustments (compared to Q4 2016 report):
o assets revaluation adjustment (negative): USD 17.8 million
o additional assets write off (negative): USD 1.0 million
Major events in 2016
Oceanteam ASA initiates financial restructuring through constructive dialogue with its banks and bondholders. The revised bond loan agreement was signed on 19 June 2017.
CSV Southern Ocean remains under contract by Fugro TS Marine Australia until end of 2018.
McDermott notified Oceanteam that they will exercise its option to purchase Oceanteam's 25 percent ownership in the vessel-owning company North Ocean 105 AS. The transaction was closed on 20 June 2017.
Finanstilsynet (Financial Supervisory Authority) has initiated an audit process on 31 August 2016, which was subsequently successfully closed during 2017.
Oslo/ Amsterdam - 23 June 2017. After having passed the final resolution on 19 June 2017 with a majority of its bondholders on refinancing its bond loan agreement, the Dutch-Norwegian based offshore service provider Oceanteam ASA ("Oceanteam" or "Company") today announced its official FY2016 figures.
2016 revenues came in at USD 51.9 million and the Company recorded an EBITDA of USD 22.2 million, both of which met market performance forecasts in what were very challenging conditions. The Company maintains a significant share of its revenues from its Solutions division, which came in at 41 percent in 2016.
For Oceanteam, FY2016 was a combination of business as usual and preparing the Company for a future of high performance and returns, says CEO Haico Halbesma. "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 Oceanteam's bondholders and banks to discuss a new capital foundation for the Company. On 19 June 2017, the Board passed the final resolution on new terms with the Company's bondholders through a qualified majority. "This final agreement reflects the firm belief held by all stakeholders in the future direction and proven track record of our Company. As we have stated earlier, this milestone embodies the joint and constructive efforts of all of our stakeholders (bondholders, banks, the Halbesma family as a major shareholder and the executive management team) to ensure the success of this deal and a future of growth", Haico Halbesma states.
As a result of this agreement and the executed sale of the Lay Vessel North Ocean 105, Oceanteam has secured the financing it needs and safeguarded its continuity as a going concern. In June 2017, the new bond loan agreement became effective. As a result the Company now has improved free cash flow and structural lower interest costs, creating a healthy foundation for further growth.
Major events and developments (2016)
CSV Southern Ocean will remain under contract by Fugro TS Marine Australia until the end of 2018 and has options for extension.
CSV Bourbon Oceanteam 101 has completed a dry dock period and started a new time charter contract in Angola.
Diavaz-Oceanteam Shipping (DOT) postpones the delivery of the CSV Tampamachoco 1 for one year, with an option to delay for a second year.
Major subsequent events (2017)
Oceanteam signs and executes bond loan agreement in June 2017.
JV Fleet refinancing is expected to be finalised by end of June 2017.
McDermott exercised its option to purchase Oceanteam's 25 percent ownership in the vessel-owning company North Ocean 105 AS. The transaction was closed on 20 June 2017.
Operations North Ocean fleet
CSV Bourbon Oceanteam 101: CSV Bourbon Oceanteam 101: after successfully completing a long-term charter with Oceaneering and BP Angola, the vessel underwent SPS and certain upgrade in dry dock and the vessel started on a new time charter contract in Angola for TOTAL SA. 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: which has been on long-term bareboat 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 contract with McDermott International and operates globally as a pipe layer. McDermott exercised its option to purchase Oceanteam's 25 percent ownership in the vessel-owning company North Ocean 105 AS. The transaction was closed on 20 June 2017.
Oceanteam Mexico SA de CV operates two Fast Support Vessels (FSV's), Tiburon and Mantarraya. Tiburon and Mantarraya are still under bareboat charter with Inversiones Setin. However, since Inversiones Setin is in breach of its obligations under the contract and the Company has not received the charter hire due thereunder, the Company has started legal proceedings against Inversiones Setin. The outstanding receivable balance in the amount of USD 0.4 million has been written off as doubtful debt as part of 4Q 2016 financial reporting. An impairment loss in the amount of USD 1.1 million has been provided during 4Q 2016 leaving the total net book value for these assets in the amount of USD 2.6million. Oceanteam management is closely monitoring the situation and is taking the necessary measures to preserve the value of these assets.
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 new builds, named Icacos and Cobos, in Q4 2014. 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 this vessel delivery with 1 year plus option for another year possible 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.
Main operational projects Oceanteam Solutions (2016)
Supplying demountable turntables and auxiliary equipment for the multiple transport of cables from Asia to Europe.
Supply of 4000T and 1100T turntables and equipment for the storage, splicing and multiple loadouts at Oceanteam's base in Velsen (the Netherlands).
The company entered a framework agreement to supply the client with future equipment, transport and storage solutions, in addition to a major lay spread contract.
Multiple cable storage contracts.
Various multi-discipline design engineering contracts.
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.
Solutions has been awarded with a subsidy from TKI-WoZ for the further research and development of its Double Slip Joint (DSJ) concept.
Leveraging capabilities. The oil and gas market is expected to remain challenging for the coming period. However, the Company's early focus on offshore renewables, engineering and logistics solutions, plus its expansion in certain geographical areas will help Oceanteam to safely navigate the current market low as well as the structural changes in the oil and gas market. Oceanteam is also in the process of creating new revenue sources in the fields of civil engineering and offshore-related logistic solutions, making use of the same core capabilities that have made Oceanteam the distinguished niche player it is known as today.
Long-term commitment. The bondholders are continuing their support as significant capital providers of the Company. As part of the new agreement they have underlined the importance of maintaining continuity within and around the Company and improving it in a structured way. This will include keeping in place the existing executive and operational management, realising a slimmed-down cost structure and appointing a bondholder representative to the Board on 9 May 2017.
Purpose. Oceanteam operates in a complex environment and executes complex projects, which require a clear day-to-day commitment to safety, quality and operational details. Even though the Company has gone through a turbulent period, the Oceanteam staff and employees have never failed their commitments to clients and have never lost sight of new market opportunities. Oceanteam has a strong track record of delivering projects successfully under all circumstances and 2016 has been no exception. The Company has started and completed numerous projects, it has built new backlog, aligned its finances and laid a new foundation for the future.
Believe and trust. To date, Oceanteam's Board has made a constructive effort to reach the recent new agreement with the Company's bondholders. Mr. Hessel Halbesma (Chairman) and Haico Halbesma (CEO), as founders, main shareholders and Board members, have made personal commitments i.e. they have deferred significant due payments to themselves and, contrary to the new terms proposed by the bondholders, shared at least 50 percent of the Management Incentive Programme with various group companies and key personnel.
This effort reflects the strong belief the Board has in the present business opportunities and the Company's people to push their horizons of entrepreneurship.