Bankruptcies and cancellations have influenced the results of TTS during the first 9 months of the year. TTS Group (former TTS Marine) accumulated an operating loss before depreciation following nine months’ trading of MNOK 16.9. This is MNOK 183.6 less than for the same period last year. The consequences of the financial crisis have been considerable for our enterprise. The market is still weak, but there are clear indicators that the demand for our product and services is on the increase, states CEO Johannes D. Neteland.
TTS’s addition to the order backlog during 3rd Quarter was approx. MNOK 430, which was an improvement of approx. MNOK 50 on 2nd Quarter. For the 4th Quarter, we anticipate a certain improvement, and 3rd November we entered into three contracts for marine equipment valued at MNOK 58, destined for conversion of several ships.
Earnings before depreciation (EBITDA) singularly for the 3rd Quarter was negative at MNOK 10.6. TTS has previously advised that additional appropriations relating to the bankruptcy of the yard in Wadan, Germany, and increase of development cost for drilling packages and large offshore cranes will overall reduce the results by MNOK 40.
The order backlog of TTS at the end of September was MNOK 5,467, which is a decrease of MNOK 2,692 since the beginning of the year. We are in the process of focusing our activities in three business areas: Marine, Energy and Port and Logistics. The intention is to increase the degree of interfacing and secure more efficient operation of the Group. In the immediate future the uncertainties and challenges are highest in the energy sector. On this basis we have implemented a full evaluation of our business units and organisations in Bergen and Kristiansand, with the intention of adjusting the manning levels and operating costs to reflect the anticipated level of activities in this sector during 2010, informs Mr. Neteland.
TTS’ turnover during the first nine months of the year was MNOK 2,916, against MNOK 2,947 for the same period last year. Earnings before depreciation (EBITDA) was negative at MNOK 16.9, compared with a positive amount of MNOK 166.7 during the first nine months of 2008. Pre-tax profit at the end of September was negative at MNOK 208.9, against a positive result of MNOK 103.0 at the same point in time last year.
Dry Cargo Handling Division
Through its activities in the Dry Cargo Handling division, TTS is a global leading supplier of cargo handling systems for ships; side loading systems, Ro-Ro equipment, hatch covers and special equipment for yachts and cruise ships.
The Dry Cargo Handling division’s turnover during the first nine months of the year was MNOK 929, a decrease of one percent compared to the same period in 2008. Operating profit before depreciation was MNOK 28.7, compared to MNOK 66.2 at the end of the first nine months last year. The lowering of margins is associated with increased appropriations relating to the bankruptcy of the Wadan shipyard in Germany.
At the end of September, the Dry Cargo Handling division reported an order backlog of MNOK 2,474, a decrease of MNOK 677 since the start of the year. These figures include 50 percent of the order backlog of the joint venture companies TTS Hua Hai Ships Equipment Co Ltd. and TTS Keyon Co Ltd. in China.
Marine Cranes Division
TTS’ Marine Cranes division develops and supplies marine cranes, and is the world’s leading supplier of hose handling cranes. The division is furthermore a major supplier of provision cranes and cargo cranes. For the offshore sector, the division delivers cranes and other handling equipment for vessels and installations related to drilling and production of oil and gas.
The Marine Cranes division reported a turnover in the first nine months of MNOK 769, a 4 percent decrease compared to the same period last year. Operating profit before depreciation was MNOK 3.2, compared to MNOK 35.9 at the end of the same period last year. The decline in profit is a result of increased development costs relating to large offshore cranes.
At the end of September, the order backlog of the Marine Cranes division was MNOK 1.377, a decrease of MNOK 993 since the start of the year. The decrease of the order backlog is the result of a considerable number of cancellations, in particular of bulk handling cargo cranes.
Port and Material Handling Division
The Port and Material Handling division supplies production lines and systems for cargo handling in shipyards and other industries, in addition to cargo and transport systems for ports.
After the first nine months, the division reported a turnover of MNOK 216, a 9 percent decrease compared to the same period last year. Operating profit before depreciation was MNOK 7.5, compared to MNOK 16.5 million at the end of September of 2008. Operations have yielded weaker results than anticipated, primarily due to postponement of several large projects.
At the end September, the order backlog of the Port and Material Handling division was MNOK 221, a decrease of MNOK 105 since the start of the year.
Deck Machinery Division
The Deck Machinery division supplies various types of winches and other deck machinery to the maritime and offshore industries.
For the first nine months, the Deck Machinery division reported a turnover of MNOK 279, a decrease of 2 percent compared to the same period in 2008. Operating profit before depreciation was MNOK 10.4, compared to MNOK 25.2 at the end of September last year. The turnover and result are lower than for 2008 due to re-scheduling of several deliveries.
At the end of September, the order backlog of the Deck Machinery division was MNOK 871, a decrease of MNOK 31 since the start of 2009.
Drilling Equipment Division
The Drilling Equipment division supplies drilling equipment to offshore rigs and complete drilling rigs for onshore use.
In the first nine months of 2009 turnover amounted to MNOK 707, an increase of 1 percent compared to the same period of 2008. Earnings before depreciation were negative at MNOK 62.2, against a positive result of MNOK 33.4 during the first nine months last year. The decline in profit is related to an appropriation for loss relating to the bankruptcy of Ability Drilling and to increased development costs for drilling packages for jack-up rigs.
At the end of September, the order backlog of the Drilling Equipment division was MNOK 523, a decrease of MNOK 887 since the start of the year. The decrease is mainly due to cancelled orders for Ability Drilling.
New Chairman of the Board and new name
At TTS’ extraordinary general assembly Wednesday 4th November, Trym Skeie (41) was elected new Chairman of the Board succeeding the late Birge Skeie. Trym Skeie holds a degree in Economics from NHH, and is partner and board member of Skagerak Venture Capital. He has considerable experience of board membership from industry and various IT enterprises. The rest of the Board of TTS remains unchanged.
At the extraordinary general assembly it was decided to change the corporate name from TTS Marine ASA to TTS Group ASA, reflecting the extended scope of the business structure of the company.
The general assembly elected KPMG AS as auditor.
About TTS Group ASA
TTS Group ASA (former TTS Marine 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 following divisions: Marine, Energy and Port and Logistics. The TTS Group is among the world’s leading suppliers within their market segments.
The TTS Group has around 1 250 employees (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, Brasil, 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 (51) has been President and CEO of TTS since 1998.