US-based OSV owner SEACOR Marine Holdings has initiated cost reduction initiatives, reducing its workforce, closing facilities and reorganising its management structure amid mounting losses
In reporting SEACOR Marine’s Q2 results, company chief executive John Gellert said, “Activity levels in the US Gulf of Mexico remain tepid as customer demand is highly sensitive to oil and gas prices.” Mr Gellert added, “the pace of the recovery is slower than we had hoped, leading us to implement our aggressive cost-cutting initiative.”
SEACOR Marine will consolidate or close certain facilities in the US Gulf, Europe and the Middle East. It will realise annualised recurring administrative and general savings of at least US$8M once the cost-cutting measures are completed in Q2 2020. It will take a one-time restructuring charge in Q3 2019.
For Q2 2019, SEACOR Marine had a net loss of US$28.4M (US$1.21 per basic and diluted share), and operating loss was US$16.5M. Year-on-year for the same period, SEACOR Marine had a net loss of US$25.0M (US$1.19 per basic and diluted share) and operating loss was US$21.0M.
If there were silver linings for the company in Q2 2019, they were the improvements it showed in vessel utilisation and average day rate as compared with the same period last year. OSV fleet utilisation edged up to 64% from 58%, and average day rate was US$9,913 as compared with US$9,742 a year earlier.
Offshore renewables also showed levels of increased activity. Mr Gellert said SEACOR Marine’s “investments in wind energy support are paying off and continue to develop attractive growth opportunities.” It secured a 30-month contract for one of its liftboats in Europe and saw increased activity for its crew transfer vessels in Europe. There was also new tendering activity in the US in connection with US east coast offshore windfarm developments.