Oil and gas woes continue to impact industrial equipment supplier
Industrial equipment supplier Northbridge has warned shareholders the slow recovery in the oil and gas sector is likely to impact the group’s performance for another 18 months.
The sombre tone was sounded in the Stoke-on-Trent group’s latest set of interim results, which show losses narrowing for the first six months compared with the same period last year.
In its results statement, the company said: “The recovery in the Oil & Gas industry remains challenging and its recovery is unlikely to be linear, and therefore our expectations for the second half reflect this, and are likely to show only modest improvements over the next 18 months.”
Group losses before tax were reduced to £2.4m (H1 2016: £2.7m), while there was better news on revenues, which increased slightly to £12m (H1 2016:
“Despite the prolonged downturn in Oil & Gas, other parts of the business will begin to pick up some of the slack and in 2018 we have high hopes of growing our North American business, our balancing services for the UK power grid and the JV in Malaysia,” it added.
Oil tool revenues and gross profit was £2.6m and £0.1m respectively (H1 2016: £2.2m and £0.2m).
The group said its situation had been made worse by the weakening of sterling at the end of the first half of 2016.
Eric Hook, chief executive of Northbridge, said: “Northbridge has seen some modest revenue improvements in our oil tool rental market, and those other areas of the business where we do have some direct influence are also performing well. However, the prolonged downturn in the oil and gas market continues to hold back some of our other rental revenues, in particular larger loadbank projects outside Europe which have been largely absent during the middle of 2017.
“We look forward to the commencement of trading on October 1 of our oil tools joint venture with our Malaysian partners, Olio Resources. The JV will service the oil tool rental market in Malaysia, Myanmar, Brunei, Indonesia, Cambodia, Laos, Thailand and Singapore and initial order levels are encouraging. Taking this together with some of our other new initiatives we remain positive for the longer-term prospects for our business.”
Northbridge hires and sells specialist industrial equipment. Its has offices or agents in the UK, USA, Dubai, Belgium, Germany, France, Australia, New Zealand, Singapore, China, Brazil and South Korea. Its global customer base includes utility companies, the oil and gas sector, shipping, banking, mining, construction and the public sector. The product range includes loadbanks, transformers and oil tools.
