Havyard Group Records Solid Growth

Havyard Group ASA had yet another good year, recording an operating profit before depreciation (EBITDA) of NOK 199 million for 2013.

The pre-tax profit amounted to NOK 190 million (NOK 215 million in 2012), which means a net profit ratio of 10% on a turnover of NOK 1,987 million (NOK 1,427 million in 2012).

In connection with the process relating to the stock exchange listing of the company, the accounting principles have been changed in order to satisfy IFRS (International Financial Reporting Standard) requirements. This applies to the financial statements for 2013 and the comparative figures for 2012.

Investment in product development

Large investments were made in developing new products in 2013. During the year, contracts were signed for, among other things, the building of seven newbuilds for customers in Norway, Denmark, Iceland, Nigeria, India and Russia.

All the newbuilds were of Havyard designTM and will be used in the offshore petroleum industry, fisheries, fish farming, operations in the Arctic and in offshore wind power production. As many as four of the designs were new developments.

“Product development is an investment in the future,” says President & CEO Geir Johan Bakke of Havyard Group ASA. “Havyard’s vision is ‘improving life at sea’ and in order to live up to that vision and increase our competitive advantage, we need to continuously improve and develop new products. We mostly expense the costs of developing new designs, which reduces the net profit ratio compared with capitalisation. This means that a 10% ratio is regarded as an excellent result. However, we expect that the investment in product development and new customers will form the basis for further growth and development of the Group.”

Good outlook

The offshore market is very dependent on the oil price and the cost level in the oil and gas industry. At present, the macro-outlook is strong for investments in big subsea vessels as a result of the high oil price. The outlook for the near future is still good. It is influenced by the key factors price and demand for oil and gas, willingness to invest and the political and economic climate in general.

The development in the willingness to invest among companies on the Norwegian continental shelf has received wide coverage of late. The growth in investments is expected to continue, although at a lower pace, but the Havyard Group’s assessment is that the activity level in the sector as a whole will remain high.

In the ship technology and shipbuilding industry, growth and demand for fishing and aquaculture vessels is affected by the key factors seafood consumption and technological development. The UN’s Food and Agriculture Organisation (FAO) estimates that, in 2030, seafood production from aquaculture will have increased from 45 million tonnes to 85 million tonnes.

The technology for catching and producing fish is undergoing continuous change because of innovation and renewal processes. This, in turn, creates opportunities for growth in the markets for Havyard’s design, equipment and shipbuilding products.

Stock exchange launch

The company’s shareholders have initiated a process that will culminate in Havyard Group ASA being listed on the Oslo stock exchange in Q2 2014. As part of this process, the company plans to raise NOK 100 million in new share capital, and the current principal owner Havila Holding is willing to reduce its holding. This will have a positive effect on the company both in relation to potential customers who have shown reluctance because of Havila Holding’s holding in Havila Shipping and because it will boost the possibility of growth through the infusion of new capital.

Geared for growth in all business areas

The Havyard Group consists of four business areas and delivers products and services to many segments of the maritime industry. “The fact that the group can deliver ship designs, ship equipment and build ships for both the oil industry and the fishing industry is a big advantage,” says CEO Bakke.

“Most sectors of the maritime industry are cyclical. This means that the need for products and services will vary from year to year. What we find, however, is that the activity in different sectors does not fluctuate in step, with the result that the overall demand from the maritime industry does not fluctuate as much, which is good for us. Live Fish Carriers for the aquaculture industry and service vessels for offshore wind power production are among the products we have developed recently and that we believe strongly in going forward,” CEO Bakke concludes.

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Source:, March 24, 2014