Bibby Line Group’s profits and revenue hit by low oil and gas prices
LIVERPOOL-based mini-conglomerate Bibby Line Group has seen revenue dip 15% to £1.45bn and profits plummeted to £29.5m in the year to December 31 2015 (2014: £44m).
The company has suffered from challenging market conditions, particularly in the offshore oil and gas sector.
However, the group finished the year with significant cash balances and net assets of £298m (2014: £280m).
The diversified group, which has a wide portfolio of interests spanning retail, shipping, marine services, logistics and financial services, said that historic lows in shipping rates and oil prices, food price deflation, and continued low interest rates all contributed to reduced turnover and operating profits.
At the end of 2015, the group sold its Australian Financial Services business, and in early 2016 it sold its ship management business. Both transactions realised good value for the group and strengthened the balance sheet to allow it to invest in the current portfolio of businesses with confidence.
The trading performance of Bibby Offshore, which provides sub-sea services to the oil and gas industry, reflects the difficult market conditions and contrasts with the record results of 2014.
Revenue decreased by 37% to £241m (2014: £384m) as fleet utilisation and rates fell, resulting in reduced operating profits of £19.6m (2014: £62.0m).
Throughout 2015 the focus was on right-sizing the business including a reduction of 20% in land-based headcount.
Bibby Offshore continued to win contracts with new and existing customers, although overall the pipeline of new business reduced. The business is now concentrating on its core North Sea DSV markets and expansion in the US Gulf of Mexico.
Bibby Line Group managing director Sir Michael Bibby said: “Low oil prices, reductions in key global trade flows, and low interest rates have combined to create challenging operating conditions.
“As a business we have responded to these challenges and have again focused on developing unique products and services, productivity improvements and reviewing where we can consolidate the market segments we operate in.
“Looking ahead, we’re in a strong position. We have the appropriate financing in place to handle unexpected events whilst taking up exceptional investment opportunities to deliver an even better business as the next upturn approaches.”
Paul Drechsler, chairman of Bibby Line Group, said: “Throughout 2015 we saw challenges in many parts of our sectors and geographies. However, the macro-economic pressures have not altered our strategy for achieving diversified growth and long term shareholder value.
“The year ahead seems set to be at least as challenging as a result of global and economic uncertainties, compounded by risks and unknowns associated with the EU Referendum, which will impact supply, demand and pricing in many of our businesses.
“The group will continue to execute its strategy, accelerating pace where necessary and capitalising on the opportunities that will inevitably arise in such circumstances.”
Bibby Line Group employs more than 6,000 people.
