Norwegian owner Ocean Yield expects to record impiarments of $130m in total for an FPSO and an offshore construction vessel as the offshore industry continues to suffer due to the Covid-19 pandemic.
According to Ocean Yield, the Covid-19 pandemic and a lower oil price has led to an expected delay in the recovery within the oil service segment. For the FPSO Dhirubhai-1, employment opportunities are currently under evaluation, but there is risk both with respect to the timeline of these projects and the sales price that can be achieved.
Ocean Yield expects to record impairments in its third quarter consolidated financial statements, estimated at $95m for the FPSO and $35m for the offshore construction and cable-lay vessel Connector.
The impairments will reduce the company’s depreciation expenses in 2021 by about $12.7m.
“Ocean Yield has a strong cash position, headroom to bank covenants and a large portfolio of modern vessels on long-term charters generating a stable cash flow. The current dividend level enables further investments without requiring new equity,” Ocean Yield said in a release.
