Sif’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell 34% in the first quarter of 2020, compared with last year, impacted by the outbreak of Covid-19 and a lower level of productivity.
EBITDA per tonne was €77 in Q1 2020, compared with €98 a tonne in the same period of 2019, the company said in its first quarter results.
Sif said the start up of new projects – foundations for the Akita and Saint-Nazaire offshore wind farms – had had low output in the first three months of 2020.
The impact of Covid-19 also affected progress, particularly in March.
Sif’s contribution – revenue minus cost of raw materials, subcontracted work, logistics and other external project-related charges – was €20.8m in the first quarter, up 11% on the €18.8m posted in the same period of 2019.
Production in the period mainly consisted of work for the Borssele 1-4 offshore wind farms off the Netherlands and Triton Knoll off the east coast of England.
Contribution margins may vary quarter-to-quarter and depend upon progress and completion of projects, Sif said.
The company said that with 135 kilotons scheduled for production in the remainder of 2020, this year’s EBITDA is now expected to be equal to the EBITDA the company realised in 2019.
Production output with 170Ktons will be lower than the 185Ktons initially guided, it added.
The output level means some of the company’s production capacity will not be fully used this year.
For 2021 and beyond, the order book is filling up with recently awarded contracts for Siemens Gamesa and an undisclosed deal, in addition to the earlier booked Hollandse Kust Zuid projects.
The total order book for 2021 and beyond currently stands at 230Ktons, Sif said.
Sif chief executive Fred van Beers said: “In the first quarter of 2020 we delivered monopiles and transition pieces to the Triton Knoll and Borssele 1, 2, 3, 4 and 5 projects.
“In parallel, we started production for Akita-Noshiro and Saint Nazaire, both scheduled for completion in 2020.
“The throughput of 35Kton reflects both the effects the set-up activities for these projects and the impact the Covid-19 outbreak had on our production process during the last month of the quarter.
“The first reflex to this outbreak was a relatively high absence because of people cautiously staying home for illness or returning to their homeland, in combination with an active precautionary policy initiated by Sif-management.
“Over the course of April, the absence rate normalised and our Covid-19 policy is now working well.
“We have seen no delays at the supply and acceptance side of the business and cash flow has proven very steady.”
However, he added that the company is “constantly adjusting to the new reality due to and as an effect of Covid-19, which comes with challenges” for its employees.