The Group reports revenue of NOK 259 mill in Q1-17, down from NOK 363 million in Q4-16, and NOK 419 million in Q1-16. Fleet utilization in Q1-17 was 49% including vessels in lay-up, but has improved in April and May 2017 following mobilization of vessels for contracted work. The fleet comprises 25 vessels. Three vessels were divested in January/February 2017 as part of the ongoing restructuring of the Group.
A total of 5 PSV vessels are currently in lay-up, and are expected to remain out of market until sustainable term work can be secured.
Revenue this quarter is significantly reduced due to vessels in seasonal lay-up in addition to vessel sales. All three LWI units were in seasonal lay-up this quarter, in addition to PSVs and SCVs now mobilized for contracted work from Q2-17.
As a result, EBITDA in Q1-17 totals NOK 60 mill versus NOK 116 mill in Q4-16, with the reduction mainly due to low utilization and lay-up.
Cost improvements provide important contributions to earnings, and will be continued but market conditions must improve fundamentally to enable significant earnings improvement.
Due to the continued state of the market and the implications for cash flow, the Group initiated negotiations for a Standstill and Deferral Agreement with all secured creditors effective 22nd November 2016. Negotiations with the secured lenders are progressing but establishing a sustainable long-term solution will take more time than initially anticipated. Target closing date is 30th June 2017.
Important recent contract awards allow for certain vessels to be taken out of lay-up and into operation. Day rates are low but acceptable considering the alternative of continued lay-up. The awards have been secured with strategically important and recurring customers.
Overall spot and term rates in the PSV and AHTS markets continue to be depressed by reduced activity and vessel oversupply. However there are signs of increased activity enabling opportunities for certain vessels. Island Offshore do however not expect to see a more extensive market recovery until a more sustainable oil price is established, inducing increased E&P investment and market activity.
The order backlog excluding charterer’s options totals NOK 2.7 billion at 31.3.2017. Contract coverage for the remainder of 2017 is 55% and has improved following recent awards.
Island Offshore Shipholding, L.P. (the “Company” or “Island Offshore”) is the parent company in the Island Offshore group (the “Group”). At present the Group has 25 vessels in operation within the vessel segments PSV, AHTS, Well Stimulation (WS), Subsea Construction (SCV) and Light Well Intervention (LWI). The fleet operates in Norway, Denmark, UK, Holland, India and Angola. The fleet is modern and versatile and Island Offshore has taken a leading position in attractive market segments. The Group is privately owned.
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Henning Sundet, CFO /Investor relations Tel. (47) 913 65 735
Island Offshore has entered into an agreement with OceanGate Expeditions for the use of Island Crown as a surface support vessel during a planned deep water expedition next year- the first manned submersible survey of the wreck of the RMS Titanic since 2005.
The assignment will have a duration of ten weeks for the Island Crown from the end of May 2018, when the vessel will depart from St. John’s, Newfoundland, with the primary operations crew on board. Each of the mission specialists will join the expedition by air for a designated 8 day mission. The ship has accommodations for up to 30 operations crew, mission specialists and content experts which will enjoy private living quarters on board.
“We could not turn down this rare opportunity; to be part of such an extraordinary and interesting project! At the same time, the Island Crown’s role in it doesn’t differ that much from the vessel’s regular work in the offshore industry: She will do what she does best; carry people and equipment, and taking care of the clients on board. We are very pleased to have secured work for the summer months next year,” says Managing Director of Island Offshore Management AS, Håvard Ulstein.
At 3.800 meters depth
Since her sinking 105 years ago, fewer than 200 people have ever visited the RMS Titanic. Now, OceanGate is constructing a carbon fibre and titanium submersible which will carry five crew members at a time to the Titanic at 3.800 meters depth.
The whole site is a memorial, hence the mission will be undertaken with great respect for those who lost their lives in the sinking. No artefacts will be collected during the expedition, all in accordance with UNESCO guidelines for the preservation of underwater world heritage sites.
Experts from the Advanced Imaging and Visualization Laboratory (AIVL) at Woods Hole Oceanographic Institution (WHOI) will collaborate on the expedition, and will lead the efforts to capture the images of the wreck from the submersible and then assemble these overlapping images into a 3D photographic model of the wreck after returning to the surface. This will document the gaps in the current knowledge of the wreck and increase the understanding of what is needed to preserve and protect this world heritage site.
Summer season 2017
The Island Crown has also secured work for the summer season this year, with walk-to-work assignments until the end of September. The vessel just completed a month-long job for Bluestream at Nordsee One Windpark, and moved uninterrupted on to the next job for Van Oord at the same wind farm.
About Island Crown
The Island Crown is a subsea construction vessel which since delivery in 2013 mainly has performed walk-to-work services at oil-, gas and wind installations. The vessel is 96.8 meters long and 20 meters wide with accommodations for a total crew of 100 persons on board. The Island Crown is equipped with a gangway system, subsea crane, helipad, large tank capacity and a cargo deck area of 561m2.
For more information, please contact Island Offshore Management AS:
Håvard Ulstein, Managing Director Tel. (47) 70 40 00 21 email@example.com
Marianne Hovden, Communications Manager Tel. (47) 70 40 00 60 firstname.lastname@example.org
The 2016 fourth quarter financial report for Island Offshore Shipholding LP was published today.
Mr. Henning Sundet, Chief Financial Officer: email@example.com, +47 913 65 735