Falling oil prices took a large bite out of profits and turnover at Global Energy Group during the year to March 31, the energy service firm said yesterday.
Aberdeen and Inverness-based Global said after-tax profits nearly halved to £14.1milion, from 25.9million a year earlier, while turnover slumped by 20% to £376million.
Pre-tax profits plummeted to £21.9million in the latest period, compared with £39.5million previously.
Chief executive Iain MacGregor said the company had been forced to let people go in some operations due to the downturn, but workers had been taken on in other parts of the group.
He added: “Like many companies in the north and east of Scotland, we are affected by spending decisions linked to the oil price.
“This has halted our growth strategy and forced the organisation to adjust its strategy.
“We are, however, very fortunate to have an entrepreneurial culture that enables the business to react fast to such circumstances and we are able to offer up a number of innovations that the market is more willing to embrace in this climate.”
Global employed 4,154 people on average during the year to March 31, which was down from 5,102 in the previous 12 months.
Mr MacGregor said headcount reductions were mostly among contractors and the impact of the downturn on jobs would carry over into the 2015/16 accounts.
Global was likely to face a depressed oil and gas market for some time but it was working hard to build its business in other markets, such as offshore renewables, nuclear and water, he added.
The group, which currently employs more than 3,500 people globally, sells a range of services associated with the operation, maintenance and construction of critical energy assets.
These include assets used for drilling, producing and processing oil and gas reserves, as well as renewable power such as nuclear, hydro, offshore wind and tidal developments.
Global – owned by Highland businessman Roy MacGregor and his family – also supports non-energy infrastructure including utilities and onshore mining.
Much of the hit to sales in 2014/15 came after a downturn in drilling rig inspection repair and maintenance work in the group’s marine and logistics business.
But Global said it was able to “successfully diversify the offering”, thanks to increased revenue from logistics and operations support for non-drilling assets such as subsea construction vessels and renewable-energy projects.
Global said its process and equipment business continued to grow despite market conditions, adding: “This reflected a robust diversification policy that covers non-oil and gas infrastructure and a strong balance of opex/capec (operational/capital expenditure) activities.
“The declining oil price also proved to be a catalyst for offshore asset owners to challenge conventional methods of repairing their ageing infrastructure.”
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