Highlights
- Consolidated revenues of MUSD 9.2 and negative EBITDA of MUSD 3.8
- Extraordinary impairments of MUSD 78.9 and negative pre-tax profit of MUSD 104.5
- Awarded a 1 year contract for the AHTS vessel Sea Eagle 1. In addition, contracts extensions and new contracts have been awarded for another 8 PSVs and 1 AHTS vessel during Q4 2016 and YTD 2017
- On 6 February 2017 announced the plan to merge the Company with Farstad Shipping ASA and Solstad Offshore ASA
Comparing 4Q 2016 financial figures with 3Q 2016, revenues decreased by MUSD 1.0. The main reason for this was lower utilization due to more vessels in lay-up and lower rates. The vessels' operating expenses increased with MUSD 1.8 from 3Q 2016 to 4Q 2016, due to all vessels being included on a 100% basis in the financials following the roll-up of DESS BTG in September 2016. Comparing operating expenses on a 100% basis in both 3Q 2016 and 4Q 2016, the expenses reduced by MUSD 1.8 due to more vessels in lay-up (MUSD 1.4) and reduced cost level for vessels in operation (MUSD 0.4).
Although there are still limited signs of improvement of the fundamentals of the global OSV markets, we have started to see a slight increase in tendering activity for OSVs in some regions. The contract coverage for the Company is not satisfactory, but the Board is pleased to see that the Company has been able to secure several contracts and reactivate vessels during the last months.
As a consequence of the weak market, Deep Sea Supply has laid up in total 19 vessels. In addition to laying up vessels to reduce cost, the Company is working hard to further reduce operating expenses for the vessels in operation. The Board is satisfied to recognize an underlying cost reduction for vessels in operation also in 4Q 2016 and expects this to continue also in 2017.
Even though rates are under severe pressure and the competition is fierce, the Company is not willing to enter into loss making term contracts. All new term contracts secured in 2016 and 2017 are expected to give a positive EBITDA contribution. With the current pipeline of tenders, the Company is confident that we are able add more term work in the near future. As announced to the market on 6 February 2017, the Company plans to merge with Farstad Shipping ASA and Solstad Offshore ASA to create a solid and world-leading OSV company with 154 vessels across all OSV subsectors and with a strong global footprint. The Company expects to call for an Extraordinary General Meeting ("EGM") to be held in 2Q 2017.
Limassol, 28 February 2017
Deep Sea Supply Plc
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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