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    Best-ever net profit for Navion; good earnings from shuttle tankers

    News // March 15, 2002
    Navion in Norway reports that it achieved its best-ever net profit in 2001, reflecting good earnings for its shuttle tanker fleet and reduced financial expenses. Rates for conventional tankers were also high during the first half-year. The group's financial position improved significantly, in part through a substantial reduction in debt and an increased equity ratio.

    Operating profit amounted to NOK 1 087 million, a decline of NOK 534 million from 2000. Net financial expenses came to NOK 293 million, a decline of NOK 841 million from the year before. This improvement primarily reflects greatly reduced currency loss and the repayment of USD 415 million in long-term debt during 2001. Remaining long-term debt at 31 December amounted to USD 275 million. Repayments corresponded to 60 per cent of the debt outstanding at the beginning of the year.

    The Navion group achieved a net profit of NOK 717 million for 2001, an increase of NOK 191 million from the year before. Overall operating revenues came to just under NOK 9 billion in 2001, a decline of slightly over NOK 850 million from the year before.

    This reduction primarily reflects a substantial weakening in tanker rates during the second half, and winding up the floating production business in the same period. In addition, revenues from vessels fixed on voyage charters for Statoil after 1 July arenot consolidated in the accounts. Such chartering is now handled by a newly-established company, Navion Chartering AS, owned 50-50 by Navion and Statoil.

    Navion's equity ratio rose from 43.5 to 64 per cent during 2001.

    The group controlled 61 vessels at 31 December, one more than at the beginning of the year. Utilisation of the shuttle tanker fleet was good in 2001, with stable earnings. Transported volume were roughly on a par with the year before. Spare capacity arising in the fleet from time to time was deployed in the conventional tanker market.

    A number of contracts of affreightment were extended during the year, including one with ChevronTexaco on Britain's Captain field. The frame agreement with Statoil for offshore loading was also extended. Navion controlled 25 shuttle tankers at 31 December, one more than the year before.

    Navion's floating production business unit was formally wound up in the second half of the year, and Navion's holdings in the Navion Munin and Berge Hugin production ships were sold to the Bluewater group. Navion took delivery in mid-September of multipurpose shuttle tanker Navion Odin from Spain's Izar shipbuilding group. This vessel started working as a crude oil carrier for Statoil at 1 January.

    Navion says the West Navion drill ship demonstrated during 2001 that it can operate efficiently in deep water and under difficult weather conditions. Operated by Smedvig of Stavanger, this vessel had a high level of utilisation until an accident in November when a helicopter overturned on the helideck.In a subsequent drilling contract off Canada, damage to the derrick and recently-discovered cracks in risers have put the ship out of commission since early January.

    The company says the outlook for its business activities in 2002 is generally positive. Earnings for the shuttle tankers are expected to be good.

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