Declines in vessel utilisation rates and significant reduction in charter rates punctured an even bigger hole in offshore supply vessel (OSV) operator CH Offshore first half FY18 results, with net loss ballooning to $2.2m from $289,000 previously as revenue fell by almost a third to $6.1m from $8.7m in the previous corresponding period.
Vessel utilisation rate fell 2.4 percentage points to 68.2% in the first half amidst a “significant reduction” in charter rates, CH Offshore said in a stock market announcement.
The second quarter was even more dire, with revenue falling 34% to $2.4m and vessel utilisation falling 6 percentage points year-on-year to 58%.
CH Offshore noted that while costs had fallen 8% in line with lower utilisation, this was overshadowed by the decline in revenue as the vessels that came off-hire were previously on bareboat charters.
Reflecting on the first half’s performance CH Offshore said: “While the global oil market has shown encouraging signs of stability and recovery in recent months, which will ultimately lead to an increase in offshore exploration activity, the OSV industry is still facing a situation of excess supply against a backdrop of slow pick-up in demand. This resulted in intense downwards pressure on vessel utilisation rates and charter rates.”
Looking ahead it said: “Customer sentiment has improved with the increase in oil price and promising demand for oil developing. However, due to the time required for planning and permitting of new offshore projects, an increase in demand for offshore supply vessels can only be realized later in 2018 or early 2019.”
Meanwhile integrated marine services company and shipbuilder ASL Marine put out a warning saying that it was expected to post a net loss for the first half of FY18 due to weaker contribution from operations, although this would be partially offset by higher other operating income.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
