Sif recorded a 77% drop in earnings before interest, tax depreciation and amortisation (EBITDA) last year, according to its 2018 financial results.
The Dutch fabricator made €13.3m in EBITDA in 2018, compared with €57m in the previous year.
Contribution in 2018 was €74.3m, 45% less than in 2017, which brought the 2018 contribution per kiloton (Kton) to €539 compared with €585/Kton for 2017.
The company defines contribution as “revenue minus cost of sale”. Cost of sale includes the costs of raw materials, subcontracted work and other external charges, logistics and other project-related expenses.
Total production was 138 Kton last year, compared with 232 Kton in 2017, said Sif.
To offset the impact of under-utilisation of its factories Sif agreed with clients to move production for the 752MW Borssele 3&4 Dutch offshore wind farm forward to 2018, having initially been scheduled for 2019,
Following this move, steel production and transport delays due to drought and low water levels in the Moselle and Rhine rivers, caused Sif to delay execution of projects and shift part of the Borssele 3&4 project back into 2019.
The company also chose to subcontract another project to avoid liquidated damages from late delivery already in 2017, which also impacted contribution.
The impacts are reflected in revenues and contribution numbers, said Sif, with “offshore wind accounting for 69% of the total contribution and for 83% of revenue”.
Revenue in 2018 was €235.1m, 28% lower than in 2017.
Sif said it “took advantage of the relatively low manufacturing activity to gear up for changing market conditions and preparing for higher utilisation of its factories as well as to meet new industry standards”.
The new standards are in relation to surface coatings and on the use of steel, mainly less wall thickness combined with larger diameters to bring down the lowest cost of energy (LCoE) of offshore wind across the supply chain.
“We have seen high tender activity in 2018 that resulted in the current 365 Kton orderbook for the 2019-2021 period with still a few 2020 and 2021 projects due for (final) award somewhere during the next half year,” Sif said.
To prepare Sif has reinforced its labour force and also carried out maintenance on machinery during 2018.
“Together with the planned investments, Sif is well positioned for the projects anticipated in the period 2019-2027,” the company said.