Oslo-listed OSV player Subsea 7 is enjoying its highest vessel utilisation since 2014.

Its 31 active ships enjoyed 89% employment in the third quarter, compared to 78% in the same period a year ago. This was also 9% up on the second quarter.

The owner had two vessels stacked and one under construction going into the period, although one of the laid-up ships was reactivated in July.

Utilisation was high in all three operational business units, reflecting key offshore phases on the West Nile Delta Phase Two, Hasbah and Borkum II projects, in addition to increased IRM activity.

CEO Jean Cahuzac said: "Our total vessel utilisation was the highest it has been since 2014 with several large projects executing offshore installation campaigns using our key enabling vessels supplemented by vessels from the wider fleet."

Net profit was $76m in the quarter, down from $111m in 2017.

Revenue grew to $1.08bn from $1.06bn, but costs rose more quickly.

The adjusted EBITDA of $217m and margin of 20% reflected the higher vessel use and increased demand for life-of-field services worldwide.

The order backlog was $5.1bn at the end of the period.

Recovery on the way

Tendering and awards activity showed continued recovery for the oil and gas market and market growth for renewables, it said.

But it added pricing on new awards remains under pressure, particularly for short-cycle projects.

The majority of new awards in 2018 have been for projects that deliver incremental production for existing developments, it said.

Offshore activity is expected to be significantly lower in the fourth quarter reflecting the more difficult weather conditions in the North Sea during the winter months, it forecast.

Looking ahead to 2019, several large greenfield project awards to market are anticipated, which will improve utilisation of key vessels and drive margin improvement in the medium-term.

Given the positive momentum in tendering activity, 2019 is forecast to be the low point in cyclical profitability for Subsea 7, with a recovery expected in utilisation and financial performance from 2020.