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United States

Sif outlook 'good' despite falling profits

NETHERLANDS: Postponed projects and mechanical issues meant foundation specialist Sif Group's production levels and operating profit (Ebitda) fell year-on-year.

Sif Group will build 77 monopile foundations for the 731.5MW Borssele III & IV wind farm
Sif Group will build 77 monopile foundations for the 731.5MW Borssele III & IV wind farm

Its production levels fell from 57,000 tonnes in the first quarter of 2017 to 52,000 tonnes a year later, while Ebitda fell 42.6% from €17.6 million to €10.1 million over the same period.

The group blamed a "lower level of work in the order book" and "various mechanical issues" for the fall in production levels, in its financial report for Q1 2018.

Jan Bruggenthijs, Sif Group's outgoing CEO, did not specify the nature of the mechanical issue, but added the company’s machines have now been repaired and are once again operational.

He also stated that "several large wind projects, primarily in France, the Netherlands and Belgium" being postponed meant a "lower degree of capacity utilisation" for the group. Bruggenthijs did not specify which projects these were.

He added Sif Group would mainly carry out "maintenance activities" during Q2 and production would increase from July 2018.

In Q1 2018, Bruggenthijs announced he would stand down as CEO for personal reasons.

Sif Group was also awarded the contract to supply monopile foundations for the Borssele III & IV wind farm off the coast of the Netherlands.

It delivered monopiles and transition pieces for the Hohe See and Albatros projects in German waters, and the Norther site off the Belgian coast as well.

Offshore wind accounted for 82% of Sif Group’s production in Q1 2018, while offshore oil and gas made up the remaining 18%.

The company has a total order book for 2018 for approximately 185,000 tonnes, the company stated. It has 60,000 tonnes of signed contracts for 2019 and a further 100,000 tonnes in projects for which Sif is in "exclusive negotiations", it added.

Sif Group described the outlook for 2019 and beyond as "good" in its Q1 2018 financial results.

However, the company also stated that it has drawn up contingency plans "for a phasing out of temporary personnel", but did not state why or when such plans might be enacted, or how many employees might be affected.

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