Oslo-listed Eidesvik Offshore has warned that shipowners ordering service operation vessels (SOVs) without contracts for wind farm work are depressing rate levels.

The company said in its second-quarter results report that activity in the offshore wind market has continued to be high.

Several medium to long-term SOV requirements were released during the first half of the year, the company added.

But Eidesvik said an increasing number of companies are ordering SOVs on speculation to ensure they have a position in the growing market.

Day rates down

"The high interest among owners to enter this market has led to increased competition on the supply side, resulting in lower day rate levels," the company said.

The shipowner noted that the shorter-term, project-related walk-to-work wind farm market was also active, utilising several subsea vessels during offshore commissioning campaigns.

Most new SOV orders like those by North Star Renewables and Shanghai Zhenhua have been backed by charters to wind farm companies.

The Edda Wind joint venture between Ostensjo Rederi and Wilhelmsen has ordered SOVs and then focused on finding term deals for them, while last month Norwegian owner Rem Offshore stepped up its push into wind farm work with an order for up to four construction service operation vessels (CSOVs).

The company has contracted Fincantieri-owned shipbuilder Vard to build two firm units at a combined priced of €100m ($118m), with options for two more.

The private shipowner, controlled by Age and Fredrik Remoy, said the new ships are "tailor-made" for global operations.

But the company did not mention charters for the vessels.

Eidesvik's 98-loa SOV Acergy Viking (built 2007) is on contract with Siemens Gamesa until January 2022.

Ebitda up but bottom line turns red

North Star Renewables has won a £270m ($376m) tender to build three service operation vessels (SOVs) for Norwegian major Equinor for the UK offshore wind farm Dogger Bank. Photo: North Star

The company's Ebitda rose to NOK 53.2m in the three months to 30 June, from NOK 33.1m a year ago.

The net loss was NOK 22m, down from a profit of NOK 44m in 2020, when currency exchange movements on loans boosted the bottom line by NOK 91m.

Revenue climbed to NOK 158m, compared with NOK 144m last year.

PSV profit rises

Platform supply vessel Ebitda was NOK 31.3m in the quarter, up NOK 0.3m from 2020.

Multiple pipe-laying campaigns helped drive vessel demand, but several ships were taken out of lay-up, hitting rate and utilisation levels.

Combined, these factors led to utilisation levels broadly in line with the same period of the previous year, Eidesvik said.

The fleet of large PSVs with more than 1,000 square metres of deck space, of which Eidesvik operates eight, saw the highest utilisation levels for both term and spot work at 80%.

The subsea and offshore wind segment saw profits rise to NOK 66.8m from NOK 48.8m, as two vessels won more work in the period.

The seismic survey ship segment made a loss of NOK 4.5m, against a NOK 1.5m profit the year before, as all vessels were laid up until the 93-loa Veritas Viking (built 1998) was reactivated in June for a bareboat charter.

The company has six seismic ships in total.

In August, the company revealed a long-term refinancing deal with banks to remove debt maturities until 2023.