Company Report: Harland and Wolff Ltd
Harland and Wolff Group (H&W) is a wholly-owned subsidiary of the Fred Olsen Energy Group. The most recent report from H&W emphasises that it has been operating in testing market conditions as it continues to offer a number of specialisms related to shipbuilding, heavy engineering, ship repair, and floating production and drilling vessels for the offshore oil and gas industry.
The trading results in 2016 reported a dramatic deterioration when compared to previous years. Turnover was 88% lower than in 2015 and the modest profits in earlier years have been followed by both an operating loss of over £6m and a pre-tax loss of over £7m.
The losses in 2016 have been described as unacceptable.
A review of the year shows that work load was much diminished and the poor trading results were a consequence.
Work in 2016 included the repair and maintenance of HMS Caroline, along with services to 24 vessels, including contracts with Stena line ferries.
Despite the lack of profitable work in 2016, the company review of the prospects for the current year, 2017, is more reassuring. It says that by mid-year the group has secured 60% of the workload for 2017 required to be able to return to profitability. Sales efforts continue to attract additional contracts during the remaining months.
The annual report makes particular mention of the continuing work for the SRTT 2000 tidal device for the Scotrenewables project, which is now under test in a special facility in Orkney. A contract has also been won from Lamprell Energy to assemble 24 jackets for an offshore wind farm in East Anglia.
H&W continues to be the pensions provider for eligible former employees. Although the group employs an average of 135 people, it is still the pensions manager for 2,633 former employees. The group contributed £2.1m in 2016 and 2017 to help to offset the actuarial deficit in the pensions funds. The deficit at the end of 2016 was £38m, nearly £7m higher than a year earlier.
When the statement of comprehensive income is adjusted to include the remeasurement of the net defined pensions liability, the annual loss in 2016 was just over £13m.
Average employment in the group was 135 people, down from 208 a year earlier.
Employment in the group has reached 545 employees having increased from 483 people four years ago.