Norwegian offshore vessel operator Reach Subsea is unhappy with its performance in 2019 in an overtonnaged market.
The company produced a net loss of NOK 24.81m ($2.65m) for the fourth quarter, against a loss of NOK 6.78m in 2018. Revenue fell to NOK 108m from NOK 191m.
Reach charters in seven ships to host its 10 remote operated vehicles (ROVs).
"The board and management is not pleased with last year’s setback in utilisation and profits," the company said.
Having three ROVs idle in the period "goes a long way in explaining the lower utilisation and negative impact" on profitability, it added.
Reach said the subsea industry is still characterised by oversupply of tonnage and equipment, resulting in a market with tough competition and pressured rate levels.
However, tendering and contracting activity has started off stronger in 2020 compared with previous years.
"Also, we are seeing signs that demand from other regions is pulling subsea vessels out of the North Sea region," the company added.
The three idle ROVs are expected to have substantially higher activity levels this year.
Foundation laid in 2020
The company has 400 days of project work in place for 2020, and is in the final stages of concluding contracts representing an estimated 300 additional days, both alone and together with its cooperation partner MMT Sweden.
"Thus, the foundation for current year visibility is at unprecedented levels, with the execution phase on these project days building up towards the latter half of 1Q 2020," Reach said.
The annual loss was up at NOK 35.7m, from a loss of NOK 9.65m in 2018.
The order backlog stands at NOK 120m.
Depreciation for the fourth quarter was NOK 50.1m, compared to NOK 71.7m the year before.
Total assets were NOK 168m, down from NOK 253m in 2018.
Reach said: "The liquidity reserve is lower than in previous quarters, which requires an active follow-up and management of our working capital."
The company has no major debt maturities or capital expenditure commitments for 2020 and beyond.
