Shipbuilder turned renewable energy giant Harland & Wolff suffered a £3.8m loss in 2013, according to newly-filed results.
Directors have said that the "very unsatisfactory" results were down to escalating project costs, leading to a review of the organisation, its structure and processes.
The group generated an operating loss of £3.8m on a turnover of £32m after two profitable years of trading and a good performance in a number of sectors in 2013.
In its annual report, the company said its flotation tank project with Norwegian firm Kvaerner Verdal AS had incurred "significant cost overruns".
However, the annual report said that the overall financial position of the company remained strong and debt free and that it was taking measures to ensure the losses were "a one-off and will not be repeated".
In recent years, Harland & Wolff Group, which is owned by Norwegian firm Fred Olsen Energy Group, has diversified from shipbuilding into a number of other industries, including off-shore wind-farm fabrication.
Most recently, the firm refurbished the massive Blackford Dolphin oil rig, which left the dock in June after an initial six-week refurbishment project ended up lasting six months.
The delay was caused by "emergent work", the need for which was only discovered once the structure was out of the water.
David McVeigh, sales, marketing and business development manager at Harland & Wolff, said that while the firm is disappointed by the loss, it is continuing to win contracts and reinvest. He said there would be no job losses as a result.
"It was just one of those things unfortunately and we have to move on," he said.
"All our other projects are healthy and in the black. We are continuing to win contracts, we are spending a lot of money on expansion and development so we can keep winning contracts and we are recruiting the best people we can to work on them."
Richard Murphy, a partner at law firm Pinsent Masons – who specialises in energy projects and sits on the Northern Ireland Renewables Industry Group Committee (NIRIG) – said that any diversification project carries risks and added that he believed the poor result at Harland & Wolff was just a blip.
"If we're talking about long-term viability, Harland & Wolff has the biggest dry dock in western Europe – not many firms have their facilities and there are not a lot of competitors in their space," he said. "This is a new area for the firm and they are still feeling their way, but the future looks much more optimistic."
Company report: Harland & Wolff Group PLC
Harland & Wolff Group (H&W) is an integrated but diverse engineering business with a number of specialisms related to marine engineering and design, ship repair, and including off-shore wind-farm fabrication.
The company is a subsidiary of the Norwegian Fred Olsen Energy Group.
Since then it has increased in both 2011 and 2012 although in 2013 it has fallen to £32m from 2012’s higher figure.
The disappointing feature of the most recent financial year is that after two years of profitable trading, 2013 recorded an operating loss of just over £3m. The pre-tax loss when translated into the balance sheet resulted in a further reduction in the value of the shareholders equity which, in 2012, had become negative and now, at December 2013 is negative at over £1.6m.
In an unusually forthright statement the directors in the strategic report say that the results for the year, which reflect cost overruns on specific projects, are very unsatisfactory. As a result of this the company is reviewing its organisation, structure and processes to ensure that this has been a one-off.
In 2013 the group provided services to 23 vessels, including some short duration emergency repairs and a number of normal maintenance repair contracts. This included docking contracts from Irish Sea operators, Stena and P&O.
A significant part of the workload related to offshore renewable engineering for the energy market including, at the end of 2013, the contract to refurbish the Blackford Dolphin mobile offshore drilling unit (which has recently been delivered back to its owners).
Looking ahead in 2014, the report says that there was a reasonable level of activity for the first half of the year and that there is considerable competitive bidding activity for new work in the second half and beyond.
Employment in the group increased, on average, to 211 people. In addition the company employed a considerable number people on a temporary basis.
H&W Group maintains a defined benefit pension fund with assets of over £124m.
This pension scheme has over 3,000 members who are either pensioners or deferred members (usually former employees).
After adjustment for tax liabilities, the pension scheme recorded a (tax adjusted net) actuarial deficit of over £20m at the end of 2013.