Netherlands

Netherlands

Illness and supply delays hit Sif's profits

NETHERLANDS: Sif Group made an operating loss in the third quarter due to a delayed start to the production of foundations for Borssele III and IV and a "relatively high absence rate due to illness", it stated.

Offshore wind accounted for nearly three-quarters of Sif's production in the third quarter, it stated
Offshore wind accounted for nearly three-quarters of Sif's production in the third quarter, it stated

It reported negative earnings before interest, tax, depreciation and amortisation (Ebitda) in Q3 2018, posting a €1.1 million loss, compared to an operating profit of €11.2 million a year earlier.

Production delays and a high absence rate had resulted in "higher than anticipated" labour costs, the foundation specialist stated.

It added that it would "seek compensation for the financial consequences of factors beyond its control".

Production levels fell to 19,000 tonnes, down 67.7% year-on-year and 63.4% quarter-on-quarter. "Delays in the supply of steel" and "the extremely low water levels in various rivers" were cited.

Sif stated that production of 77 monopile foundations for the 731.5MW Borssele III & IV project off the Dutch coast and of two jackets for a Maersk Oil project in the North Sea accounted for the bulk of production. Offshore wind accounted for 74% of output in the third quarter, while ‘offshore oil and gas and other’ represented 26%, it added.

Unsurprisingly, "underutilisation" of the company’s production facilities led to a 62.3% drop in revenue, which fell to €11.4 million.

But the company did reduce its net debt, from €52.5 million at the end of the second quarter to €43.1 million by the end of September.

New CEO Fred van Beers, who replaced Jan Bruggenthijs earlier this year, said he had been "learning more about the specific knowhow and skills of Sif employees and the company’s position in the supply chain". He said he would also be" focusing on further expanding and optimising (Sif's) know-how and core processes".

Van Beers added that one of the company’s priorities would be to "take maximum advantage of the strong market for offshore wind energy, without losing sight of opportunities in the offshore oil and gas markets".

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