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Farstad tips into the red, four vessels laid-up

Farstad tips into the red, four vessels laid-up
Farstad Shipping recorded an NOK8.3m loss in 2014, and laid up three AHTS vessels and one PSV in January 2015 as the offshore market deteriorated.

Fleet growth drove an increase in revenues to NOK4.3bn from NOK4bn in 2013, but increased financing and operational costs turned the bottom line red.

The company's activities are split between the North Sea, Brazil and Australia Asia accounting for 20.5%, 32.2% and 43.5% respectively. Each of its operating regions suffered from oversupply of tonnage as oil majors began extensive cost reduction programmes.

"Overall the markets in 2014 were characterized by too much available tonnage, pressure on rate levels and declining utilization," the company stated in its annual report. "On the supply side the fleet of large and medium-sized supply vessels increased by 9% in 2014, and the order book was still very high at the end of the year, corresponding to 27% of the existing fleet. The order book for various types of subsea vessels has also increased during the past years and now constitutes approx. 30% of the existing fleet."

Including options, Farstad had 67% fleet coverage for the remainder of 2015 and 52% for 2016.

While Farstad's necessary refinancing of loans in 2015 and 2016 are considered low risk due to room for further leveraging of its fleet, "In 2017 and 2018 the risk will increase, among other things in connection with bond loans."