Emergency support vessel operator North Star expects a tightening of the market in the North Sea to deliver profits.
And it also hailed new business in renewable energy markets as a chance to secure “a bright future in challenging times”.
The Aberdeen company has just lodged annual results at Companies House.
It said they showed “continued business resilience” during a “milestone” year.
We’ve seen the costs of our activities in the North Sea soar, particularly in relation to fuel and crew travel, in addition to inflationary pressures across the board.”
North Star was catapulted into the UK offshore wind market last year after securing four long-term charters, worth a total of £360 million, for its new hybrid-powered renewables fleet.
The firm now describes the package as one of the most successful service operation vessel (SOV) deals in the world last year.
It elevated the company to become the North Sea’s leading SOV operator in terms of number of contracts secured within a six-month window, North Star said.
The firm also said it had “fortified” its balance sheet with a £127m bank loan to build new SOVs, with the first ship expected to be delivered during the first quarter of 2023.
North Star added it had “locked in” a “substantial number” of new emergency response and rescue vessel (ERRV) contracts.
And a spokeswoman for the firm highlighted its ongoing work with UK North Sea operators, underpinned by “client relationships that span over 40 years of reliable operation”.
Vital emergency support
North Star operates a fleet of 41 ERRVs and platform supply vessels (PSVs) supporting 50 offshore installations in the UK North Sea.
ERRVs provide vital emergency support on standby, 24/7, 365-days a year.
North Star said there was a negative impact to profit margins from “fluctuations” in the PSV market last year.
The company’s results show pre-tax losses of £7.4m in 2021, on turnover of £96.4m.
This was after a change of accounting period, with losses of £14.8m on turnover of £57.4m recorded for the eight months to December 31 2020.
North Star said its figures highlighted “challenges the offshore vessels market has been faced with since 2015, with rates yet to fully recover from the 2014 downturn in oil and gas activity.”
The cost of operating safely and reliably has also risen sharply over the past two years, the firm added.
‘Whirlwind’ year
Chief executive Matthew Gordon said: “Last year was a whirlwind for the business.
“We secured four monumental SOV contracts, turbocharging our strategic growth plans into the UK’s offshore wind market.
“This has been critical to protecting the longevity of our business, transitioning our organisational excellence in offshore infrastructure support.
“At the same time, we’ve seen the costs of our activities in the North Sea soar, particularly in relation to fuel and crew travel, in addition to inflationary pressures across the board.
“These cost pressures create challenges to North Star in the short term, however, we are seeing the market for ERRVs getting tight, which will allow us to achieve rates that will, ultimately, help with profitability.”
He added: “With the equity backing of our new owners, leading global private markets firm Partners Group, we are in a robust financial position to realise our European offshore wind ambitions, while maintaining our strong position in the ERRV market.
North Star employs about 1,300 crew and onshore workers in Aberdeen and Lowestoft.
Swiss-based private equity firm acquired the business earlier this year, from Basalt Infrastructure Partners, for an undisclosed sum.
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