Norway’s Bergen Group is battling to find rig outfitting work to fill berths at a newly upgraded offshore facility despite narrowing its first-quarter loss after cutting back on unprofitable shipbuilding activity.
The fabrication and maintenance group, which is shedding a large share of its shipbuilding interests to focus on more lucrative rig work, saw low activity during the quarter for its offshore division that recorded an operating loss of Nkr9.6 million ($1.6 million), compared with a Nkr9.8 million profit a year earlier.
Bergen Group has carried out investments to upgrade the Hanoytangen facility on Norway’s west coast - including an enlarged dry dock that is now touted as the biggest in northern Europe - but had only a minor yard stay for modifications on the accommodation unit Floatel Superior during the quarter.
The group stated it “has taken measures in order to ensure a more stable and profitable activity at Hanoytangen”, which includes beefing up its marketing resources for the offshore and service divisions now being co-ordinated under the newly minted unit Bergen Group Hanoytangen.
Bergen Group is targeting rig maintenance, modification and upgrade work, as well as conversions and platform decommissioning jobs, for the yard facility, which it said has “generated tender requests”.
The services division was though boosted by the award of non-offshore maritime services contracts with Norway’s Armed Forces and Society for Sea Rescue to give a total of Nkr120 million worth of deals secured in the quarter.
The offshore and services divisions had a combined order book of Nkr201 million at the end of the quarter, out of a total group backlog of Nkr577 million, and the group stated tendering activity in these business areas is up on last year with more work expected.
Despite the setback for the offshore division, the group reported a lower operating loss for the quarter of Nkr2.8 million, versus Nkr173.3 million a year earlier, as it lifted revenue by 17% year on year to Nkr584.8 million.
It was left with a net loss before continued operations of Nkr8.6 million, versus a negative Nkr178 million a year ago.
The group’s scaled-back shipbuilding division recorded a positive quarterly operating profit of Nkr14.1 million to turn around a year-earlier loss of Nkr175.8 million as a rising tide of red ink due to loss-making projects has prompted it to throw a large part of the unit overboard.
It recently agreed to revise a deal with Calexco to sell a majority stake in the division’s ownership entity Noryards by increasing the size of the interest to be sold from 51% to 70% and cutting the price from $18.2 million to $13.2 million, with the transaction “to be finalised in the near future”.
Bergen Group has also sold two shipbuilding projects to compatriot shipyard group Kleven, having last year sold its offshore fabrication division to Australian contractor Worley Parsons for Nkr1.1 billion.