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Solstad suffered a drop in earnings in the second quarter. Large write-offs meant that the company lost more than DKK 800 million.
Kjell Inge Røkke and John Fredriksen are the main owners of Solstad Offshore through their systems.
Lise Åserud / Håkon Mosvold Larsen NTB scanpix
Published:,
Crisis-hit offshore shipping company Solstad had an after-tax loss of NOK 804.8 million in the second quarter, after large write-offs during the period, accounts show Monday.
This is a deficit deterioration of 342.5 million in the corresponding period last year.
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Therefore, supply and drilling companies affected by the crisis “never” go bankrupt.
Impairment of 960 million
The company notes that market weakness and falling market prices for the company’s securities have led to the need to evaluate the fleet.
The result is that Solstad records the values at NOK 960 million. At the end of the quarter, the company had a negative equity of NOK 7 billion.
At the top of the accounts, operating income fell to NOK 1.33 billion from NOK 1.37 billion in the corresponding period last year.
Due to the write-down, the operating profit was drastically reduced, to minus NOK 996.5 million from negative NOK 26 million.
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Land rescue package
Solstad has been experiencing financial difficulties for several years due to the high level of indebtedness and the difficult offshore market. After negotiations with creditors dragged on, the company launched a rescue package in May.
The deal means that NOK 10.9 billion of the company’s just over NOK 33 billion of debt will be converted into shares.
Among other things, it also means that the remainder of the company’s mortgage-backed debt will be placed in a new loan with a four-year maturity. A portion of NOK 900 million of this loan will be repaid, as far as possible, with money from the ships to be sold or scrapped, while the remainder of this portion will be converted into shares.
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Crisis stroke
The crown crisis has made an already difficult situation even more difficult for oil suppliers, after oil prices fell sharply and oil companies adjusted their budgets.
Solstad writes that a gradually better market was expected in early 2020, based on high and stable oil prices and the budgets of oil companies.
Then came the eruption of the crown.
“Therefore, most oil companies announced reassessments of planned activity in 2020, leading to a significant and immediate reduction in activity,” writes Solstad.
The shipping company further writes that it is unclear how the oil and gas markets will develop in the future, but that activity as a whole will likely be less than previously assumed.
The quarterly report to Solstad
