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DOF loses $26.6m in Q4, forecasts weaker 2015

DOF loses $26.6m in Q4, forecasts weaker 2015
Offshore operator DOF has predicted higher than normal earnings uncertainty for its vessels without contracts in 2015, as it announced a NOK202m ($26.6m) loss in the fourth quarter, down from a NOK152m profit in the same period last year.

Over half of the group's PSV and AHTS fleet is deployed in the project market as opposed to long term charters, and is therefore more vulnerable to market conditions. Two vessels on the North Sea spot market returned weak earnings in the fourth quarters, and two older vessels were laid up in December upon completing their contracts.

For the AHTS fleet utilisation fell from 93% in Q4 2013 to 80% in the fourth quarter 2014, affected by dry dockings and mobilisation for new contracts.

For the year DOF reported a NOK450m profit, up from a NOK25m loss in 2013.

In February 2015 the company agreed to sell five of its vessels through a Brazilian subsidiary, which after debt repayments will generate NOK500m upon closing in April 2015.

DOF's current order backlog totals NOK30.9bn excluding options and NOK65.5bn including options. Its newbuilding programme totals $1.2bn, with seven vessels due for delivery up to 2017.

Despite being partly sheltered from worsening offshore markets by its existing charter coverage, DOF was downbeat on its 2015 outlook.

"A considerable weakening of the oil price have increased the focus on cost cuts and capital rationing from the oil-companies, hence the board of directors expect a lower activity and increased uncertainties on future markets," the company stated in its earnings release. "With a basis in the Group’s high back-log the board of directors expect at present an operational EBITDA for 2015 in line with, or somewhat weaker than in 2014."