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Solstad Offshore expects to sell 25 vessels within 2021

Norwegian offshore company Solstad Offshore released its second quarter report this week along with an update on its fleet clean-up. The CEO expects to dispose of the last 25 by the end of 2021. 

Photo: Solstad Offshore

Lars Peder Solstad, chief executive of Norwegian family-owned shipping company Solstad Offshore, presented the second quarter report Wednesday morning and gave further insight into the fleet clean-up that the offshore company embarked on in the beginning of the year.

A total of 37 vessels were to be sold, and by the end of the second quarter, Solstad had completed sales of 10 vessels, with another two sold since the quarter closed for a total of 12 vessels.

This leaves 25 vessels, which the CEO expects to exit the Solstad-fleet by the end of the year.

"(We expect, -ed) to have sold the majority within the next six months, and the remaining not long thereafter. That is the target," says Lars Peder Solstad.

Directly after the presentation of the quarterly result on Wednesday morning, Solstad Offshore announced another vessel sale. The vessel Nor Tigerfirsh has been sold, with delivery to its new owner taking place the same day, August 25, according to a press release.

The fleet clean-up is one of the elements in the rescue plan which Solstad Offshore landed last year and which helped to shave off a third of the debt in the company.

ShippingWatch has reported that Solstad isn't alone in reviewing its fleet. The same goes for competitors Bourbon and Tidewater. Tidewater stated earlier this year that it had disposed of 56 ships in 2020.

Laid-up vessels should remain in lay-up

Earlier today, ShippingWatch reported that hundreds of vessels stood in the way of an upturn in the offshore supply vessel (OSV) market. Scores of vessels must be scrapped before rates can recover and in order for the market to experience an upturn.

This is the consensus among analysts, including Market Analyst at Fearnley Offshore Supply Jesper Skjong and Head of Offshore Research at Clarksons Erik Tønne.

"We expect the scrapping volumes to increase going forward due to the tremendous number of aging units still cold-stacked, hopefully even exceeding the numbers  seen in 2018 and '19," Skjong told ShippingWatch.

During the quarterly presentation, ShippingWatch asked Lars Peder Solstad about the scrapping efforts in the OSV market and his thoughts on the matter.

"It depends very much on which segment we're talking about. If you look at the lay-up fleet around the world, I think the majority of these vessels will never get onto the market anyway. It is good to get them permanently out of the market. That will be a benefit, but to put a number on it is difficult. But we will scrap vessels, and we hope others will do so as well," the CEO says to ShippingWatch.

Lars Peder Solstad, CEO i Solstad Offshore | Photo: Solstad Offshore ASA
Lars Peder Solstad, CEO i Solstad Offshore | Photo: Solstad Offshore ASA

Optimistic for black figures in future results

While this second quarter ended in a smaller deficit compared to the year before, there were nonetheless red figures on the bottom line for the Norwegians.

The quarterly results showed a deficit of NOK 269.9 million, whereas the deficit in the second quarter of 2020 amounted to NOK 804.8 million.

In light of this development, things are moving in the right direction for the family business.

At the Norwegian headquarters in Skudeneshavn, the chief executive is optimistic about seeing the figures turn from red to black in the coming financial statements.

"There is a positive market development and that gives us hope and we see that the optimism is increasing and that we expect to have better numbers going forward than previously and also at a point that will give a positive bottom line," Lars Peder Solstad concludes.

Hundreds of vessels stand in the way of upturn in OSV market

Solstad books another deficit despite better contracts

Solstad reduces deficit and is cautiously optimistic about 2021

Solstad CEO embarks on large-scale fleet clean-up 

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