DOF Group boss Mons Aase expects the severe downturn in offshore vessel markets to last "long into 2021".
Speaking on the shipowner's second-quarter webcast, the chief executive said day rates for platform supply vessels (PSVs) in the North Sea are at or below operating expense levels, with no real upturn in sight.
"We expect quarter three to be okay, and of course there is more uncertainty in quarter four, but hopefully we will win a few more jobs," he said.
He is also hopeful that some of the activity lost to Covid-19 and oil price falls will return, but he added that even if this is the case, "we expect activity to remain lower than we expected before Covid".
Aase said North Sea PSV rates were "dramatically" down by 40% in the first half.
"The North Sea PSV market today is extremely challenging," he said.
One beacon of hope is Brazil, where DOF has a strong presence and where it added contracts in the second quarter.
DOF believes the country has $30.7bn of "probable" oil exploration projects lined up until 2024 — by far the biggest potential spend globally.
The current downturn will impact the market for the rest of 2020 and "long into 2021", Aase said, increasing pressure on rate levels.
Financial problems worsen
As a result, DOF admitted that its financial risk has increased as it continues to seek a long-term funding solution with its lenders.
Repayment standstill agreements until 30 September have been agreed, with a Brazilian payment freeze with development bank BNDES valid until 30 December.
Further extensions to these deals are expected, the company said.
DOF has 47% contract coverage over the next 12 months.
The net loss in the second quarter was NOK 675m ($76m), compared to a deficit of NOK 106m in the same period of 2019, meaning it has now lost NOK 4.79bn in the year to date.
Revenue shrank to NOK 1.8bn from NOK 1.85bn, while it booked an impairment of NOK 779m, bringing the total charge in 2020 to NOK 2.3bn.
DOF had 17 ships in layup at the end of June. Aase said these are mainly PSVs and some small anchor-handling tug supply ships, as well as one subsea ship, but the rest of the 67 vessels are in operation.
Debt rose NOK 1.6bn in the six months to June, due to currency effects.
