Weak offshore market sees impairments affect BoskalisCompany News // February 20, 2017
Dutch dredging, marine and offshore contractor Boskalis says that, due to what it called "the strongly deteriorated market conditions in the offshore energy sector and the resulting outlook" it will report a non-cash impairment charge of Euros 840 million in its annual results 2016.
Boskalis said the charge is almost entirely related to the services part of Boskalis' offshore oil and gas activities, with more than Euros 365 million related to an impairment of vessels, more than Euros 380 million relating to goodwill and approximately Euros 90 million to Smit Lamnalco.
"In some of our service-related offshore energy market segments there is a structural imbalance between supply and demand," said Boskalis, "particularly in the heavy marine transport segment. This has put utilization rates and margins under pressure, resulting in a non-cash impairment of both the value of the vessels that operate at the lower end of the market and the goodwill."
Boskalis said its financial position "continues to be strong" even after the impairment. At the end of 2016 Boskalis was debt free with more than Euros900 million in cash on its balance sheet. The solvency ratio at year-end exceeded 55 per cent and Boskalis comfortably meets the covenants agreed with its debt providers.