Two North East subsea engineering firms have posted losses amid findings of wider industry uncertainty about future project timelines.
Modus Subsea Services and Subsea Innovation, both based in Darlington, reported operating losses in the year to the end of September 2022. In the case of Modus, it said £1.3m operating losses came amid a strategic decision to sell its fleet of submersible, remotely operate vehicles (ROVs) and concentrate on becoming a market leader in underwater drone technology.
The firm said that amid continued low prices in the ROV services market, and a speeding up of the global energy transition spurred by the war in Ukraine, it had turned its attention to 'underwater intervention drone' tech which had been working on for some time. Describing the move as a transformation programme. Modus said the work had stripped more than 500 revenue earning days out of the company but had left it in a stronger position and able to secure an important contract with an energy major.
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Director Ashley Shepperd said that more drone systems would be delivered this year thanks in part of a strategic alliance with Kawasaki. He said the work would help drive Modus' growth in the sizeable pipeline inspection market.
Meanwhile, Subsea Innovation, a subsidiary of underwater cable protection specialist Tekmar Group, swung to a loss of £183,000 during the year, having posted operating profits of £1.38m in the 18 months to the end of September 2021. Turnover was down from £9.9m in the 18 month period to £4.5m last year.
The accounts came before Tekmar Group secured the backing of US-based private equity firm SCF Partners, having sought a buyer amid losses. SCF's involvement includes the £18m of convertible loan notes made available to the group, which has said it wants to invest and grow its business, including Subsea Innovation, in the North East.
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The two reports come at the same time as a snapshot survey of the 海角视频's £8bn underwater industry which suggests that supply chain firms have the capabilities to support the global energy transition but confidence is being held back by a lack of clarity about projects. The Global Underwater Hub, a trade body for the industry, said questioning of its member companies found that market opportunities across the world are expected to increase in the short and medium term, with stronger growth expected to come from international markets compared to the 海角视频.
But respondents said project visibility was the biggest barrier, with the vast majority fearing that most projects will not keep to proposed timelines and therefore impacting supply chain planning.
Steve Fernie, strategic programme manager at GUH, who led the survey, said: "There is confidence across the underwater sectors, yet it is very aware of the challenges it faces which would impact the speed of project development and delivery. As the global drive to net-zero continues, there are huge opportunities for the 海角视频’s world-class underwater supply chain, which for decades has been in demand overseas. Creating project surety is critical in order for the underwater supply chain to support the timely development of multiple projects and deliver 2050 net-zero ambitions.”