Falling oil prices have again hit energy sector services company Global Energy Group’s profits and turnover.
Yesterday the Inverness and Aberdeen-based group said its figures demonstrated a “strong performance in this challenging market,” despite a drop in pre-tax profits of more than £11million to £3.1million in the year to the end of March.
The company’s turnover fell to £292million, compared with £376 million the previous year.
Global said its earnings before tax, depreciation and amortization (EBITDA) after adjusting for one-off restructuring costs, were £23.7million this year, compared with £37.6 million in 2015.
The group’s workforce reduced by 1,000 to around 3,500 during the year.
It is the second year running that Global, which owns Nigg Energy Park on the Cromarty Firth, has seen profits and turnover fall as low oil prices affected its key markets.
Announcing its annual results, Global said it manages its risks by “diversifying across a number of highly-regulated end markets, which includes a number of sub-segments of the oil and gas industry.”
In a statement, the company added: “Sustaining revenues at £292million reflects a robust diversification policy that covers non-oil and gas infrastructure and a strong balance of operating expenditure/capital expenditure activities.
“The declining oil price also proved to be a catalyst for offshore asset owners to challenge conventional methods of maintaining their ageing infrastructure.”
Global said it had experienced a “positive response to its innovative and high performance methods of delivering critical repairs and maintenance,” that enabled it’s Process and Equipment business to maintain its revenue base despite declining spend in the sector.
Group chairman, Roy MacGregor, said: “Like many companies in the north and east of Scotland, we are affected by spending decisions linked to the oil price.
“We were able to successfully downsize the business during the year and achieved a profit despite restructuring costs.
“Cash generated during the period was allocated to the further geographic and market diversification of the group.
“This included growth in the Australian LNG, Middle East marine and UK chemical sectors and the UK renewable energy markets.”
He added: “We have mixed feelings about the immediate future where we have growth targets in some markets, but expect CAPEX-linked business in the UK oil and gas market to be difficult.”
Last week Mr MacGregor said Global was considering legal action against the Port of Cromarty Firth trust port over a new pricing structure he says will “penalise” the company by increasing fees for rigs and vessels using Nigg Energy park by 25%.
The new rates regime, which Mr MacGregor claimed was not in the interest of stakeholder companies using the Cromarty Firth, is due to come into effect on January 1.
The Global Energy Group sells a range of services associated with the operation, maintenance and construction of assets across energy industry sectors, including oil and gas, nuclear, hydro, offshore wind and tidal.
The group also supports non-energy infrastructure, including water and utilities and onshore mining.
Recommended for you
