GC Rieber slips to red over impairments, low activity

Norwegian offshore shipowner GC Rieber Shipping sank to a loss in the third quarter 2016 versus a profitable third quarter last year, mostly due to fleet impairment and low activity in the oil related segments of subsea and marine seismic.

The shipping company on Wednesday reported a net loss of NOK 233.5 million ($28.1M) in 3Q 2016 compared to a profit of NOK 25.3 million ($3.05M) in 2015.

The vessel impariments were related to GC Rieber’s new marine geophysical company named Shearwater GeoServices, which was formed in October together with Rasmussengruppen.

As a result, Shearwater took over four GC Rieber’s vessels, the Polar Empress, Polar Duke, Polar Duchess, and Polar Marquis, and the corresponding vessel loans were transferred to Shearwater. In turn, the transition of ownership led to fleet impairments of NOK 126.9 million.

During the quarter, Polar Onyx, Polar King, and Polar Empress have been operating for shorter periods while the Polar Marquis and Polar Duchess have been without employment through the period and Polar Duke has been cold stacked.

The company said that another factor for the loss in the quarter was the total fleet utilization of only 54 percent. In comparison, utilization was 87 percent in the third quarter of 2015.

Operating income also decreased, mainly due to limited employment in the period, and the company recorded operating income of NOK 53.7 million in 3Q 2016 while last year’s third quarter ended with NOK 213 million.

Together with the announcement about the new geophysical company in October, GC Rieber also said that its then CEO Irene Waage Basili would temporarily leave her position to take the CEO role at Shearwater until the new player recruits a permanent CEO. Waage Basili’s place at GC Rieber was in turn taken by chief financial officer (CFO) Einar Ytredal as acting CEO.

Commenting on the company’s 3Q performance, Ytredal, the acting CEO, said that while the company is excited to have established Shearwater thus positioning itself for expansion, the overall market situation in the offshore segments remains challenging, and the company expects this to continue.

Offshore Energy Today Staff