Dutch marine contractor Van Oord has reported a EUR 62 million net loss for the Fiscal Year 2021 due to large loss provisions taken on three projects in the business units Netherlands and Offshore wind: the Afsluitdijk project in the Netherlands, the Saint-Brieuc project in France, and the Greater Changhua project in Taiwan.
At the Saint-Brieuc project in France, Van Oord encountered unexpected deviating ground conditions and operational delays. With the project restart beginning in 2022, Saint-Brieuc is expected to be completed one year later than previously anticipated.
The Greater Changhua project in Taiwan was seriously hampered by COVID-19, Van Oord said, adding that the company took all the necessary measures to safeguard the well-being of its crew, ensure that crew changes on vessels went smoothly, and avoid supply chain problems.
According to Van Oord, the provisions for the losses on the projects were recognised and discussions on compensation with clients are ongoing.
On the other hand, Van Oord ended the year with an optimistic outlook for its markets reflected in a record-high order book of EUR 4.4 billion, compared to a EUR 3.6 billion order book reported in 2020, mainly driven by the Offshore Wind business unit.
The largest projects awarded to Van Oord through its Offshore Wind division in 2021 included Sofia EPCI (UK) and Baltic Hub T&I in Offshore Wind.
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”Driven by COVID-19, market conditions and operational challenges. These resulted in a net loss recognising a substantial provision on three specific complex projects. At the same time, we ended this year with a record-high order book and a positive outlook for all our markets. Even in this period of turmoil, we are investing in our future, by attracting talent around the globe. And we are investing in the right kind of sustainable equipment to support our growth ambition. Last but not least, we are a learning organisation – deriving lessons from challenges endured.”
The company’s revenue in 2021 stood at EUR 1.517 billion, a 9.5 per cent decrease compared to a EUR 1.677 billion revenue recorded in 2020.
The activity level in Offshore Wind was lower than in 2020 and revenue fell to EUR 347 million, a 45 per cent drop compared to EUR 632 million reported in 2020.
The outlook for offshore wind remains promising, Van Oord said. The company’s tender activities are at an all-time high, prompting a revision of forecast figures for 2025 and 2030 upwards.
In addition to projects in the traditional offshore region of North-West Europe, Van Oord also tendered for projects in the United States, Taiwan, and Japan in 2021.
”We are optimistic about the longer-term outlook in our markets. We expect revenue to increase and margins to improve substantially in 2022. Profitability will also depend on the settlement of larger claim positions during the year. We expect our order book to further develop positively, reflecting the outlook of our markets. To prepare for growth, we launched a recruitment campaign in 2021, that will be continued in 2022,” Pieter Van Oord said.