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Years of strife ahead, warns Rem Offshore

Years of strife ahead, warns Rem Offshore
Reporting fourth quarter losses of NOK161.1m ($18.6m), North Sea operator Rem Offshore warns of a bad market in the sector for years to come.

The result reverses lean profits of NOK25.4m recorded in Q4 2014, and brings year-to-date losses to NOK110m, wiping out relatively strong Q2 earnings of NOK64.2m.

Revenues fell to NOK289.2m from NOK392.5m in Q4 2014, and would have been even worse if not shored up slightly by the sale of construction support vessel (CSV) Rem Forza in December, which generated NOK 24.2m.

“There will be a continued focus on steps to reduce costs and improve cash flow,” said Rem Offshore. "The company expects low utilisation, weak rates and limited refinancing opportunities in the offshore market in the coming years.”

In what would appear to be a warning, at a minimum, of negotiations to loosen financial covenants ahead as with many other offshore marine companies, the firm said the market in the coming years would: "Necessitate close and constructive collaboration with the company’s key stakeholders."

In response to falling demand, Rem laid up two platform supply vessels (PSVs) and a CSV, and pushed back an offshore construction vessel (OCV), on order from shareholder Vard Group, until the first quarter of 2018.

“Due to the low price of oil, the oil companies are continuing to focus on cost-cutting, and activity levels are falling. There is therefore little to suggest any improvement in the market balance in the near term,” the company said.