Norway's Eidesvik Offshore has begun talks to protect cash in the offshore shipping slump.
But the offshore support vessel owner revealed that a government plan to help the beleaguered oil and gas industry could offer some hope for a market hit by coronavirus restrictions and an oil price drop.
The Oslo-listed platform supply vessel, seismic survey and subsea player had a cash balance of NOK 380.5m ($37.4m) and net interest-bearing debt of NOK 2.35bn at the end of the first quarter.
"In light of the recent negative development of the market and outlook, the group will initiate processes in order to protect its liquidity and financial position both short term and longer term," Eidesvik said.
Chief financial officer Tore Byberg told TradeWinds that dialogue has started with banks to protect the "strong liquidity position" the company had at the beginning of 2020, and to prevent it from deteriorating further.
No new funds needed
"We are not looking to raise additional money, just preserve the liquidity we have," he said.
"Our liquidity and contact coverage coming into the year was good, but we have had a couple of contracts cancelled and one that expired was not renewed. So we have a few ships going into lay-up, which we would not have expected at the beginning of the year."
Most other North Sea OSV operators have announced bank talks on refinancing or emergency loans to tide them over a dire period.
Eidesvik said the medium-term outlook is subject to change depending on the effect of the Norwegian government’s support package for the domestic oil and gas industry.
Byberg explained that Norway had presented a revised national budget on 12 May, which will be voted on in parliament this month or in early June.
"It is about the timing of taxation for oil and gas companies that could support existing projects on the Norwegian continental shelf," he said.
"It remains to be seen whether politicians have got or have understood the message."
Eidesvik said drilling activity has been cut back, with a number of rig cancellations reported.
"Vessel owners are laying up tonnage and ... we expect challenging times ahead both in the short-term and medium-term perspective," it said.
The owner reported a net loss of NOK 179m in the first three months, compared with a loss of NOK 49.7m a year ago.
However, this mainly came from NOK 222m of currency losses.
Platform supply vessel results held up, posting Ebitda of NOK 22m — up from NOK 5.3m last year — as utilisation and day rates increased, until the virus took hold in northern Europe later in the quarter.
results held up, posting Ebitda of NOK 22m — up from NOK 5.3m last year — as utilisation and day rates increased, until the virus took hold in northern Europe later in the quarter.
Group revenue was down to NOK 137m from NOK 154m last year.
