A troublesome wind turbine installation vessel continues to drag on Subsea 7’s earnings, plunging the offshore player into the red even as the company expects a strong 2024.
The Oslo-listed, Kristian Siem-backed company posted an $11m loss for the fourth quarter of 2023 as it took a $73m impairment charge stemming in part from a contractual dispute over damage to the 50,300-dwt semi-submersible Seaway Alfa Lift (built 2023).
The company said it “intends to use all legal resources available to reach a satisfactory outcome” in the dispute.
The Seaway Alfa Lift has been an issue for the company stretching back to 2021, when its foldable crane was moved in an uncontrolled way while under construction at China Merchant Industry Holding.
The ship was not delivered until 2023 and when renewable and heavylift outfit Seaway 7 was taken private last year, the company blamed its financial struggles on the vessel’s issues.
Still, chief executive John Evans talked up the Subsea 7’s prospects as its contract backlog hit $10.6bn following $7.4bn in new awards last year — levels he said have not been seen since 2013.
“Confidence in the group’s outlook for cash generation in 2024 and beyond, combined with a sharp reduction in capital expenditure following the completion of our two newbuild wind vessels, supports the board’s recommendation for shareholder returns totalling at least $1 billion over the next four years,” Evans said.
The company said it expects revenue to hit between $6bn and $6.5bn versus just under $6bn in 2023.
The company’s fourth quarter performance was a reversal of its $26.7m profit reported in the last three months of 2022.
For the quarter, the company brought in $1.6bn in revenue, up from $1.3bn year on year.
But that was whittled away by higher operating and administrative expenses, leaving $54.7m in operating income.
The net operating income line for conventional oil and gas rose year on year, from $111m to $128m, but renewables posted a $69m loss.
Revenue for oil and gas totalled $1.4bn, while renewables brought in $218m.
