Norwegian owner SD Standard Drilling (SDSD) has warned its profit could be hit by a drop in offshore vessel values in the intensifying downturn.
The company, controlled by investor Oystein Stray Spetalen, said in its annual report that the sector has been hit by both the coronavirus and the oil price war, leading to slack demand for platform supply vessels (PSVs).
The outfit faces increasing uncertainty in its markets, it added, admitting it was difficult to predict the full extent and duration of the crisis.
But SDSD said the main impact on its business could arise from a decrease in the value of ships in which it has indirect ownership.
The company said it has "systems and procedures in place to maintain its place in the market" and mitigate risk. It is also in a "sound financial position with no debt," the outfit added.
The company maintained it was still in a "good position to seek and take advantage of any attractive investments that may arise".
SDSD's board is recommending that no dividend be paid for 2019, however.
The Cyprus-based company describes itself as an "investment entity". It owns 100% of four large PSVs and has minority shares in another nine medium-size units.
A revaluation of the fleet during the fourth quarter caused the company to finish 2019 in profit, despite weak markets.
Its profit is most affected by changes in the fair value of the fleet.
SDSD posted net earnings of $6.5m for the whole of 2019, compared to a $1.2m loss in 2018.
The fair value of its investments as of 31 December 2019 was $76.8m, as appraised by "reputable independent valuers".
The company also owns a stake in a newbuild VLCC.
