Davie Yards releases third quarter resultsYard News // November 20, 2008
Davie Yards in Canada has released its financial and operating results for the nine month period ended September 30th 2008.
Revenue for the third quarter ending September 30th was US$28.7 million and net income was US$3.3 million. Revenue for the nine months was US$51.4 million and net losses were recorded at US$51.5 million.
"The result of the agreements announced September 23rd 2008, made with the company's clients for a US$60 million price increase on the contracts for the five ships, and the rest of the financing plan, will enable the company to post profits on the contracts as well as improve working capital and equity," said Davie.
The company has in addition secured a loan from Investissement Quebec of C$10 million through their PASI programme.
"Despite a setback in contracting activities for new ships in all segments due to the economic turbulence and financial crises, the fundamentals in the offshore oil market remain positive, and the market outlook for complex offshore vessels and rigs for deep water operations is still strong," said Davie.
"The last quarter was as expected regarding production output, revenues and operational costs. We had a net gain of US$11 million on currency exchange, giving a net positive result for the quarter", said Steinar Kulen, the CEO of Davie.
"The identification of the operational issues has been addressed and an improvement plan is being implemented. We have managed to obtain short term financing to keep the operation going, with support from our largest shareholder as well as our suppliers. The financing plan is well under way".
As reported previously, the company is operating under a going concern uncertainty. The company has incurred losses from operations and cash outflow from operations together with provisions for future anticipated losses, and has a negative working capital as at September 30th 2008.
The ability of the company to continue as a going concern is dependent upon finalising the financing process, which were started in August 2008.