Prosafe loss widens on impairment charges

Offshore accommodation specialist Prosafe has posted a net loss of $360 million in the third quarter of 2019, compared to a loss of $118 million a year ago.

“Due to a prolonged downturn and weaker outlook in the North Sea, in particular, an impairment of $341 million has been made to the book value of vessels, resulting in marginalized book equity. Prosafe has adequate liquidity of $216 million,” Prosafe said.

The company’s fleet utilization for the quarter was 48.2 percent, similar to 48.1 percent a year ago.

“Based on firm commitments, the company maintains adequate liquidity beyond 2020. The company will initiate a dialogue with its lenders to ensure sufficient flexibility for the longer term. Going forward, the focus will be on further reducing the organization in response to the reduced and volatile activity level to reduce costs and preserve cash. Further, Prosafe will seek entry into new geographical markets and new segments,” the company said.

Providing its take on the current market for offshore accommodation rigs Prosafe said that activity in the market has continued to decline during 2019, and the outlook for 2020 is lowered significantly with the largest impact in the North Sea. Prosafe said that it sees no tenders in the North Sea and with only a few contract opportunities anticipated in the next years, in Norway in particular.

Outside of the North Sea region, Prosafe sees Brazil offering opportunities, although at lower rates. Two tenders are currently outstanding in Brazil, the company said. Apart from Brazil, Prosafe has stressed increasing focus on other markets including Mexico.

Prosafe also said that long-term macro indicators remain positive based on a continued expectation of growth in demand for energy globally.

Offshore Energy Today Staff

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