The North Sea services arm of waste management giant Augean has defied the oil and gas downturn to register a huge increase in profits.
Alternative Investment Market-listed Augean said group pre-tax profits surged by 29% to £3.1million in the first half of the year. Revenue was up by 27% at £31.3million.
Augean North Sea Services (ANSS), which operates in the oil and gas market, primarily from four sites in Aberdeen but also from Lerwick in Shetland, accounted for more than a quarter of the total revenue.
ANSS earnings before interest, taxation, depreciation and amortisation nearly trebled to £1.4million, from £500,000 a year earlier, with revenue growing by 39% to £8.1million.
Operating profits at the subsidiary rocketed by 246% to £1million.
ANSS specialises in drilling waste management, which includes hiring out offshore engineers and equipment to customers, as well as onshore and marine industrial services and water treatment.
The business has been wholly owned by Augean since March, when the Yorkshire-based group bought a 19% stake from Scomi Oiltools for just over £1million.
Augean chief executive Stewart Davies said yesterday the growth at ANSS was driven by a strategy of diversification into new work and the “criticality of the services we supply”.
The firm is eyeing opportunities in a decommissioning market which seems poised for takeoff as operators call an early end to production from some fields.
“What we are doing now is broadening the scope of our services,” Mr Davies said, adding the company was also looking at areas including boat cleaning and naturally occurring radioactive material and platform waste management.”
He said he was “very pleased” with the first half performance of ANSS, which employs about 100 people, amid a worsening of market conditions in the oil and gas sector.
Reporting continued “momentum” across the group during the first six months of 2015, Augean said ANSS had exceeded management expectations.
It added: “Given the ongoing turbulence in the oil and gas sector, management continues to monitor events closely and ensure that costs are tightly controlled.”
But the company said it was also continuing to invest in ANSS in order to “allow the business to pursue its growth strategy and take advantage of the opportunities that are emerging in the current environment”.
The first half performance, new contracts and work in the pipeline mean previous management expectations for ANSS will be exceeded for the 2015 financial year, the group added.
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