Although suffering from the generally weak offshore market thanks to the low price of oil, Revenue remained reasonably stable in the nine-month period, dropping only 5% to $274.2m from $288.7m. Utilisation fell 3.1% to 86.5% versus 89.6% in the same period in 2014, shored up by strong 98% utilisation in the Caspian, versus 94% in 2014, where a series of long-term contracts insulated Topaz against further losses.
Topaz highlighted “strategic investment in long-term growth markets in West Africa” as affecting its profit margins. The company invested $46.3m in the nine-month period including $9.1m for new vessels, versus $227.3m in the same period in the year previous.
“Topaz performed strongly in our key Caspian market and Middle East, Europe and North-Africa markets, which together make up 79% of revenue. Africa operations demand for offshore support vessels is currently weak, however we continue to believe in the long-term opportunities of these markets,” said ceo René Kofod-Olsen.
“In September we commissioned two new subsea vessels from Vard Brattvaag in Norway at a purchase price of approximately $115m, underlining our confidence in the long-term strength of the subsea sector. These vessels will be delivered in Q2 and Q3 2017. We have achieved significantly lower ownership cost for this type of vessel by committing to build during current depressed condition for our industry.
“We are relentlessly driving down our costs on all fronts including projects, crew, procurement, other operating costs, overheads etc with a target to realize annual savings of circa $10m next year.
“Q4 has begun in the same vein as Q3 with significant rate pressure from clients and each tender and market opportunity heavily contested by numerous competitors. However, we have seen significant tendering activity in the Middle East, Europe and Africa during the quarter and hope to be successful on some of these opportunities leading into the New Year.”