Nine months into 2010, TTS Group ASA reported an operating profit before depreciation of NOK 16.8 million, compared to a loss of NOK 16.9 million in the same period last year. The third quarter saw a negative operation result of NOK 5.9 million, owing to extraordinary depreciation and cost overruns on ongoing projects.
- Two of our three divisions are meeting expected results, but we are not satisfied with the operation and results of the Energy division. We will effectuate further cost-cutting measures in this division, says Johannes D. Neteland, President and CEO of TTS Group ASA.
The TTS Group’s total turnover after nine months, was NOK 2 326 million, a 20 percent decrease compared to the same period last year. The group reported a pre-tax loss of NOK 91.1 million, compared to a loss of NOK 209 million nine months into 2009.
The net result was a loss of NOK 110.1 million, compared to a loss of NOK 179.9 million the year before. TTS’ order backlog at the end of the third quarter was NOK 3 539 million, compared to NOK 4 510 million at the start of the year. The order intake so far this year was NOK 1 823 million, which is NOK 474 million more than at the end of the first nine years of 2009.
Marine division
The Marine division supplies design and engineering of equipment for cargo handling and cargo access on vessels. Turnover at the end of the third quarter was NOK 1 624 million, a decrease of 4 percent compared to the first nine months of 2009. The division reported an operating profit before depreciation of NOK 112.5 million, compared to NOK 83.9 million in the same period last year.
The Marine division’s order backlog at the end of September was NOK 3 092 million, a decrease of NOK 707 million since the start of the year. These figures include 50 percent of the order backlog in the joint ventures TTS Hua Hai Ships Equipment Co Ltd. and TTS Bohai Machinery Co Ltd. in China.
The level of activity in the division was somewhat lower in the third quarter than in the first half year, however, profit margin was improved by an increased market share related to the service and after sales market.
Port and Logistics division
The Port and Logistics division supplies production lines and systems for cargo handling in shipyards and other industries, and loading and handling systems for ports. Turnover in the first nine months of 2010 was NOK 231 million, an increase of 7 percent compared to the same period last year. The division’s operating profit before depreciation was NOK 18.8 million, compared to NOK 7.6 million after the first nine months of 2009.
The division reports a high level of activity, both in the market for port equipment and for equipment to the shipyard industry and earnings are satisfactory.
The Port and Logistics division’s order backlog at the end of Q3 was NOK 116 million, a decrease of NOK 169 million since the start of the year. An improvement of order intake is expected in the fourth quarter.
Energy division
The Energy division supplies offshore cranes and winches, drilling equipment for offshore rigs and complete drilling packages for land-based drilling. Turnover for the third quarter of 2010 was NOK 471 million, a decrease of 54 percent compared to the same period in 2009. The division noted an operating loss of NOK 110.4 million, compared to a loss of NOK 107 million after nine months in 2009.
At the end of the quarter, the order backlog of the Energy division was NOK 331 million, a decrease of NOK 139 million since the start of the year.
In the quarterly accounts, TTS has taken extraordinary depreciation amounting to NOK 13 million. The accounts have been charged with project related cost overruns at the amount of NOK 14 million.
The activity in the market for products and services supplied by the Energy division has been increasing throughout the autumn. The market outlook is still considered highly uncertain. On this basis, TTS is implementing further cost adjustment measures.
Capital situation
The equity ratio in TTS has been reduced to 23.5 percent in the third quarter, owing to extraordinary depreciation, as well as a downward adjustment of deferred tax. Based on the stipulation under the terms and condition of the company’s loan, of an equity ratio of a minimum of 25 percent, the company’s main bankers have agreed a waiver of this stipulation, securing the continued financing of activities. Efforts to reduce capital biding within the group, if further prioritised.
About TTS Group ASA
TTS Group ASA is an international group that develops and supplies handling equipment for ships, ports and offshore oil and gas installations. Operations are organised into the business areas Marine, Energy and Port and Logistics. TTS is among the world’s leading suppliers within its market segments.
At the start of 2010, the TTS Group had 1 135 permanent employees (not including associated companies), with a primary emphasis on engineering skills. The group has operative units in 15 countries: Norway, Sweden, Finland, Germany, the Czech Republic, Italy, Greece, China, USA, Canada, Mexico, Brazil, South Korea, Vietnam and Singapore.
TTS Group ASA’s head office is located in Bergen, Norway, and the company is listed on the Oslo Stock Exchange. Johannes D. Neteland (52) has been President and CEO of TTS since 1998.
Contact:
Johannes D. Neteland, President & CEO
Tel.: +47 918 46 906
Arild Apelthun, CFO
Tel.: +47 918 19 265