Island Offshore confirms deliveries postponedCompany News // September 1, 2015
Island Offshore in Norway has confirmed that it is delyaing delivery of all but one of its newbuilds.
Its newbuilding programme includes four vessels to be delivered from Vard Brevik. Island Offshore has agreed with the yard to delay delivery of all the newbuilding vessels with the exception of Island Defender, which will be delivered in January 2016 as planned.
"The agreement to defer the newbuilding programme is important to mitigate the negative implications of a weaker market and will improve the short term cash flow for the group," said Island Offshore in a statement about its second quarter results.
"As a result of the continued weak market conditions, additional measures that may strengthen the financial position and working capital of the group are under assessment, and are being discussed with relevant parties," said the company.
"Unfortunately the PSV market continues to be depressed across regions and price competition is fierce for both spot and term work. We expect the weak PSV market to continue but expect the AHTS vessels to generate satisfactory earnings in the third quarter, following award of subsea construction work."
Island Offshore said the light well intervention (LWI) segment improved significantly in the second quarter with high utilization for all four of its units and strong earnings.
However, it said that further lay ups are being "continuously assessed" for vessels completing term contracts. The LWI units Island Frontier and Island Wellserver are expected to become idle in mid-October. At present alternative work through the winter season has not been secured.