Sif’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased in the third quarter of 2019 compared with the same period last year.
The company recorded an EBITDA of €14.6m compared with €13m in the same period in 2018.
In the third quarter 2019 the company secured a contract to supply 84 monopiles for the 800MW Vineyard Wind offshore wind project, off the coast of Massachusetts. Since the contract award the project has been delayed for an “undefined period of time”, according to Sif, due to the extended environmental review by the US Bureau of Ocean Energy Management.
Sif also secured a contract zones 2-4 of Hollandse Kust Zuid offshore wind farm in The Netherlands. Including the post-quarter three win of zone 1 of Hollandse Kust Zuid, the company will supply 140 monopiles for the wind farm.
The company also signed a deal with DEME to provide a marshalling service on Maasvlakte 2 and a lease of an additional 20 hectares.
Sif CEO Fred van Beers said: “The outcome of 2020 remains uncertain with limited clarity on timing of the Vineyard project.
“We are still in talks with the client on different scenarios ranging from full delay of the project to manufacture of part of the order in 2020. Further news on timing is not expected before December 2019 but with the passing of time it becomes less likely that Vineyard will lead to production in 2020.
“For 2021 we already booked 108 Kton following the recent addition of the fourth part of Hollandse Kust Zuid in The Netherlands. With increasing ambitions of various countries and high tender activity, we expect good utilisation from 2021 onwards.”
Van Beer also acknowledged “improved pricing levels also applied to the projects at hand at the start of the third quarter”.
“However, both the pressure on this quarter’s production capacity as a consequence of the delayed Borssele 3 and 4 project and production issues, caused planning problems and a less efficient production,” he added.
According to van Beer, “with multiple projects at hand and tight delivery schedules, production lines repeatedly required conversion. This resulted in production of 46 Kton at much higher than pre-calculated manhours and overtime.”
This impacted this quarter’s contribution margin and Sif anticipates that in the final quarter of 2019 an equal utilisation with production anticipated at 47 Kton and contribution margins at 2019 second quarter levels, at least, is expected.