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Norwegian shipowners more pessimistic on profit and access to capital in 2015

Norwegian shipowners more pessimistic on profit and access to capital in 2015
Norwegian shipowners are more pessimistic on profitability and access to capital this year than in 2014 according to the 2015 Maritime Outlook report by the Norwegian Shipowners Association (NSA).

The outlook divides Norwegian shipping and offshore into four segments – shortsea shipping, deepsea shipping, offshore service and offshore contractor – all of which have lower expectations for operating results in 2015, when compared to the 2014 outlook.

“Compared with 2014, shipowners have lowered their profitability expectations for 2015. To illus­trate, 35% anticipate a stronger bottom line in 2015 compared with 72% in 2014, while 42% of shipowners expect a drop in profitabil­ity in 2015, compared with 8% last year,” the report said.

With the drop in the oil price and the impact that this has had on the offshore sector it is of little surprise to that offshore service shipowners “are the most negative by far”. Three out of four shipowners in this segment expect weaker results in 2015, with just 13% expecting to strengthen their bottom line this year, compared to 83% in 2014. Offshore contractors were slightly less negative with half expecting weakened profitability in 2015.

Meanwhile the most optimistic were deepsea shipowners where 60% see improved results for this year. Shortsea shipowners are less optimistic that than they were in 2014, with 42% expecting improved results in 2015, compared to 80% the previous year.

Although offshore service shipowners are the most pessimistic for 2015 they NSA also noted they had enjoyed the highest operating margins in recent years with 15% and 14% in 2012 and 2013, respectively.

Capital markets are also expected to be tighter than they were in 2014. “In 2014, around half believed that access to capital was good or very good, while today only one of four reports the same,” NSA said.

“Three of 10 respondents in the survey, about the same as last year, say that access to capital is tight or very tight, while 50 % of shipowners experience their access to financing as neutral. Only 3% of those reporting that access to capital was important for them say they have very good access to financing for new projects.”

Looking at staff and recruitment the report found that Norwegian shipowners plans for recruiting in 2015 were “substantially lower” than in 2014. What recruiting there is planned was primarily for non-Norwegian personnel with 30% of shipowners planning to increase their number of foreign seafarers, while one in four plan to reduce their number of Norwegian seafarers in 2015.