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Solstad Offshore revenue in 2020 is expected to be negatively affected by the COVID-19 pandemic and sharp decline in the oil price

  • The Company’s revenue in 2020 is expected to be negatively affected by the COVID-19 pandemic and sharp decline in the oil price.
  • On May 8th, 2020, Solstad signed a Restructuring Implementation Agreement with a vast majority of its creditors for a financial restructuring of the Group.  Following implementation and effective date, this agreement will significantly improve the company’s overall ability to handle the uncertain markets ahead.
  • Revenues for the first quarter of 2020 was MNOK 1,203 vs MNOK 1,146 in 2019, while EBITDA (adjusted) for the first quarter was MNOK 284 vs MNOK 223 in 2019
  • The quarter was significantly impacted by non-cash currency losses and termination of financial leases on four vessels.

Compared to the Company’s financial reporting for the fourth quarter of 2019, the Company’s consolidated result for 2019 changed from NOK -2,877 million
to NOK -3,129 million, and the Group’s consolidated equity is decreased by NOK 252 million. The decreased result and equity are mainly due to additional impairments of the Company’s vessels defined as sales candidates.

As per year-end, the Company’s consolidated equity was negative by NOK 3,835 million.
As communicated to the market on 8 May 2020, Solstad signed a Restructuring Implementation Agreement for a financial restructuring of the Company with a vast majority of the Company’s key stakeholders. This includes all secured finance providers, except for three financial providers in the subsidiary’s Solship Invest 3AS and Farstad ShippingAS. The final solution is subject to approval by creditors and shareholders.

If successful, this could remedy the Company’s negative equity situation and provide ground for a long-term financial platform for the Company. The Annual Report’s going concern assumption depends on the outcome of the Company’s restructuring efforts, and the Audit Report includes an emphasis of matter in respect of going concern in relation to the ongoing restructuring process. Reference is made to theAnnual Report for further information.

Souce: Solstad Offshore