Farstad Shipping suffers $148m in impairment losses during 2015

Farstad Shipping suffers $148m in impairment losses during 2015

Offshore shipping company Farstad Shipping says it will undertake NOK1,279m ($148m) in impairment losses during its fiscal year 2015.

Of these losses, some NOK1,094m ($127m) in impairments will be posted in Farstad’s 4Q 2015 financial results.

The Oslo-listed company said the book losses relate to vessels and other fixed assets and are “based on the development in brokers’ market values of the fleet, the prevailing market prospects as well as the uncertainty related to the vessels’ future earnings”.

The company currently operates a fleet of 59 vessels, comprising platform supply vessels (PSV), subsea support vessels and anchor handling tug support (AHTS) ships. It has one subsea support newbuilding being built at Vard Vung Tau for delivery in the fourth quarter this year.

Fartstad has begun selling off its older vessels to release liquidity, but each transaction has suffered heavy book losses.

In January, the company’s Australian subsidiary P/R International Offshore Services sold its PSV Lady Grace at a NOK49m ($5.61m) loss on its book value. The same month, Farstad Supply sold its 25-year-old PSV Far Scandia at an NOK8m loss ($0.91m) on its book value.

May 2015 saw the sale of Farstad Marine’s PSV Far Superior for a book loss of around NOK15m ($2m). Farstad also took a $0.53m loss in March 2015, when it sold its 1991-built AHTS vessel Far Sky.

The Norwegian has also laid up seven of its vessels in recent months. A number of staff have been laid off and the company has closed its office in Aberdeen, Scotland.

Farstad will publish its quarterly result for 4Q 2015 and its preliminary annual accounts for 2015 on February 29.

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.

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