Scottish oil and gas drilling giant KCA Deutag has reported a “relatively strong” financial performance, compared to many industry peers, despite some UK North Sea customers shutting down platform activities.
In accounts for 2015, the Aberdeen-based company said it had focused on service delivery and cost cutting amid limited opportunities for growth.
KCA added its platform services arm – the world’s largest operator in the market – delivered “excellent operational performance” in an increasingly challenging North Sea trading climate.
The division “performed steadily” but suffered a reduction in revenue and earnings before interest, taxes, depreciation and amortisation (ebitda) .
“We did experience some clients shutting down platform activities, particularly in the UK and Angola,” KCA said, adding: “We have reduced our headcount in those markets.”
KCA currently employs about 8,000 people globally, which is down from a peak of around 9,000 before oil prices crashed.
Relocation news from the firm early last year coincided with plans to axe up to 230 Aberdeen jobs as it grappled with a slowdown in North Sea drilling.
The group’s 2015 figures showed a slump in revenue to £1.2billion, from £1.5billion a year earlier.
But it narrowed pre-tax losses to £79.5million, compared with just over £100million previously.
Chief executive Norrie McKay said yesterday the company had enjoyed a “satisfactory start” to 2016, delivering ebitda totalling £52million in the first quarter alone.
He added: “In March, we were also pleased to be re-awarded the drilling contract for seven of Statoil’s platforms on the Norwegian continental shelf through a contract extension to October 2018, and last month we successfully completed the disposal of our jack-up drilling unit, the Ben Rinnes.
“Market conditions remain challenging across each of our business units and we continue to expect that 2016 will be a difficult year, but KCA Deutag is continuing to focus on navigating its way through the downturn.”
In the accounts, chairman Bob Ellis said: “We believe that the fundamentals of our business remain strong in the long term.
“We continue to focus on our core strengths and manage our cost base and cash flows in a prudent manner to ensure that the group is well-positioned to adapt to the current conditions.”
KCA Deutag currently has its headquarters at Altens, Aberdeen, but it will soon be moving to the City South development at Portlethen, about five miles south of Europe’s energy capital.
The company is controlled by Pamplona Capital Management, which co-invested with US-based First Reserve in the £906million buyout of the business – then called Abbot Group – in March 2008.
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