Siem Offshore expects AHTS market to struggle but PSV segment is improving

The market for AHTS vessels is expected to continue to be plagued by poor operating conditions while there are signs of improvement for the PSV segment, according to Siem Offshore.

Siem Offshore noted that on the AHTS vessels segment is forecast to struggle with low utilisation and low average day-rates on a global basis.

“Term contracts for AHTS vessels are still more or less non-existing and owners have to rely on the spot market, which is unbalanced,” Siem Offshore stated.

For PSVs, large and modern units have experienced an increase in demand particularly for upcoming projects in the North Sea, whereby the rates for term contracts are showing a positive development.

Another bright spot in the offshore market is the offshore construction vessels segment, whereby both the oil and gas and offshore wind market were active with good demand throughout the first quarter.

“This combined increase in demand resulted in an improved market outlook for the subsea vessel segment,” Siem Offshore said.

Read more: OSV sector needs five more years to clear supply glut

“The outlook for 2019 is improved compared to 2018 for all segments, however, the current charter rates do not offer sufficient earnings for return on capital,” it said in its first quarter results announcement.

The Oslo-listed company recorded a net loss attributable to shareholders of $20.2m in the first quarter, narrowing from the loss of $26.9m in the year-ago period.

Operating revenue in the first three months was $69.3m, improving from $65.9m in the same period of last year.

Posted 14 May 2019

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Lee Hong Liang

Asia Correspondent