Norwegian shipowners anticipate slower growth in turnoverNews // April 13, 2015
Norwegian international shipping had a total turnover of NKr248 billion (US$30.6 billion) in 2013, according to Navigating in a New Climate: Maritime Outlook 2015, a publication from the Norwegian Shipowners’ Association.
This would be an increase of 19 per cent from 2012. Estimates based partly on statistics from this year’s report show that shipping companies increased their turnover by 5.5 per cent in 2014 to NKr202 billion (US$24.9 billion).
Shipowners’ expectations one year ago, presented in the 2014 report, were for an increase of 6 per cent, very close to the actual figure. Since 2013, there has been a negative development in annual turnover for Norwegian shipping companies. Shipowners are far less optimistic this year than last, anticipating only a 2.3 per cent growth in 2015, amounting to NKr268 billion (US$33.1 billion). Offshore service shipowners make up the largest segment at around NKr100 billion (US$12.3 billion) in turnover for 2014. Up until 2012, deepsea shipowners were the largest segment by turnover.
For 2015, all segments expect turnover to increase, with the exception of offshore service, where a 4.2 per cent downturn is anticipated. This would mark the first year with a decrease in this seg¬ment since 2002. The growth in turnover for the offshore service shipowners in 2014 was at 9.9 per cent, slightly higher than anticipated in the 2014 outlook report.
Offshore contractors anticipate a 9.1 per cent growth in turnover for 2015, which is lower than the previous year. The figure seems high given that investments on the Norwegian Conti¬nental Shelf (NCS) are expected to drop by around 10 per cent in 2015. 2014 saw a growth of 2.2 per cent for offshore contractors, slightly higher than anticipated in the 2014 report.
Due to a substantial order backlog, the tough offshore market conditions will not immediately hit the revenue of offshore contractors operating on the NCS. Based on current contracts by March 2015, the number of contracted jack-ups will go up from 11 units in 2014 to 13 units in 2015.
On the other hand, the number of contracted floaters will decrease from 24 to 22 units. Many of the rig contracts are ended at levels that will contribute to increased revenue for the offshore contractors. There is also an expectation in the market that some new contracts will be signed in 2015. This situation is unlikely to prevail.
The outlook for both the Norwegian and global rig market is bleak, and the situation will get worse as we move towards 2016. The supply is greatly outstripping demand, a situation that is aggravated with the delivery of several new units to the NCS. As a consequence, day rates for rigs are expected to decrease further. This situation will intensify in 2016, when a larger pro¬portion of the fleet will go off contract compared to 2015.