Prosafe CEO Jesper K. Andresen has given up on 2020.

This is clear from comments in relation to the strained company's interim report for the second quarter and first half of the year, which shows a deficit of USD 897 million for the first half of the year, compared to a loss of USD 26.1 million for the same period the year before.

The loss is attributed to, among other elements, two large-scale impairments of a little more than USD 1 billion the company booked on its assets during the period.

"2020 is a lost year as the Covid-19 pandemic and weak market conditions have resulted in an unprecedented low fleet utilization, low earnings and increased uncertainty about the outlook," says Andresen in the report.

This comes at a time when Prosafe is already in a challenging financial situation and has for a long time been negotiation with creditors to settle a rescue plan for the company. Meanwhile, the company's debt referral agreement expired in early August.

"The process with the lenders remains constructive and progressing. Meanwhile, the company is taking every step to protect liquidity while vigorously pursuing any commercial opportunity."

Customers will postpone contracts

For the second quarter, Prosafe, which leases accommodation rigs to the offshore sector, reports a deficit of USD 41.9 million, down from a profit of USD 2.1 million in the second quarter 2019.

Revenue came to USD 4.5 million in the second quarter and USD 29.5 million for the first six months of the year.

Fleet utilization went down significantly in the first half of the year and came to 20 percent, compared to 67 percent in the same period last year. The weak market has made oil companies put numerous projects on hold or cancel them entirely, and this has put pressure on the oil sector supply chain, as contracts have been canceled or are renegotiated to make it through the period.

Prosafe is in talks with customers concerning postponement of current and coming contracts. Some of these will continue, though Prosafe has demanded a sum to be paid for cancellation of a contract worth USD 2 million.

Furthermore, Prosafe had to postpone launch of a 162-day contract in Great Britain for vessel Safe Caledonia. Originally, work was slated to begin in April, but the contract with oil major Total has been postponed by a year.

The company's vessels Safe Scandinavia, Safe Boreas and Regalia have also been idle in the quarter. Prosafe will send the latter to be scrapped.

(This article was provided by our sister media, ShippingWatch)

English Edit: Daniel Logan Berg-Munch

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