Dutch offshore transport company Boskalis has decided to exit the loss making low end transport market and take some of its vessels out of service, the company said in its first half financial report.
Boskalis’s operating results in the first half of this year decreased to EUR47m ($53.5m) compared to the same period last year and the company attributed the decline to a sharp drop in the results of the offshore energy division where the transport activities at the low end of the market in particular worsened further and are now heavily loss-making.
“This segment is rapidly becoming a commodity transport market, often not oil and gas-related, that is structurally confronted with Asian overcapacity. In addition, the commodity activities do not fit within Boskalis’ strategy aimed at a position higher up in the transport & installation market. These developments have prompted Boskalis deciding to terminate these activities,” the company said in the report.
Boskalis has decided to take its closed-stern heavy transport vessels out of service, which will result in a structural improvement in the operating result of more than EUR25m on an annual basis.
“We have reviewed our position there and have decided to fully exit this loss-making market segment that offers no prospects for improvement. With the lower end of the transport fleet we are slipping down further in the market and we are unable to add sufficient value. This is in contrast to the upper end of the fleet where we are distinctive, especially in combination with our other vessels and activities – fully in line with our strategy,” said Peter Berdowski, CEO of Boskalis.