Sinopacific will deliver all the newbuildings in 2017, Sinopacific said on
Sinopacific will deliver all the newbuildings in 2017, Sinopacific said on
By MarEx 2015-07-17 01:37:52
Wärtsilä’s Ship Power business, now renamed Marine Solutions, is cutting 600 jobs to realign its organization, operations and resources in response to the sluggish global marine market situation.
Of 600 jobs cut, 160 will be in Finland. A portion of the job cuts will be realized through retirements.
In taking these measures, Wärtsilä seeks annual savings in the region of EUR 40 million ($45 million). The effect of the savings will materialize gradually beginning from the third quarter of 2015, and will take full effect by the end of 2016. The non-recurring costs related to the restructuring measures will be approximately EUR 25-30 million.
“The marine industry has been slow in recovering from the global economic crisis and new shipbuilding contracting is weak,” says Jaakko Eskola, President, Marine Solutions, Senior Executive Vice President, Wärtsilä Corporation.
“At the same time, the offshore oil and gas industry has been adversely affected by lower oil prices. In addition, there are risks related to vessel owners negotiating extensions to existing delivery contracts. The combined impact of these developments has created a challenging market situation for the entire marine sector.
“These unfortunate capacity adjustments have to be made in this current environment of low demand in order for us to maintain our competitive position in the global market. Despite streamlining the organization, our commitment to our customers remains absolutely solid.”
These realignment plans are aimed at adjusting Wärtsilä’s Marine Solutions business to be able to efficiently respond to the needs of its various customer segments. The effect of these adjustments will be specified when the consultation processes are initiated in the affected countries according to local practices and legislation.
Currently, Wärtsilä Marine Solutions employs 7,217 people globally.
The company has just released its interim January to June interim report, announcing the following results:
SECOND QUARTER HIGHLIGHTS
– Order intake increased two percent to EUR 1,159 million
– Net sales increased 10 percent to EUR 1,230 million
– Book-to-bill 0.94
– EBITA EUR 144 million, or 11.7 percent of net sales (EUR 138 million or 12.4 percent)
– Operating result before non-recurring items EUR 137 million, or 11.1 percent of net sales (EUR 132 million or 11.8 percent)
– Earnings per share 0.54 euro
– Cash flow from operating activities EUR 47 million
– Acquisition of L-3 Marine Systems International finalised
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2015
– Order intake increased eight percent to EUR 2,443 million
– Net sales increased five percent to EUR 2,218 million
– Book-to-bill 1.10
– EBITA EUR 250 million, or 11.3 percent of net sales (EUR 243 million or 11.5 percent)
– Operating result before non-recurring items EUR 237 million, or 10.7 percent of net sales (EUR 230 million or 10.9 percent)
– Earnings per share 0.97 euro
– Cash flow from operating activities EUR 84 million
– Order book at the end of the period increased 20 percent to EUR 5,325 million
Wärtsilä expects its net sales for 2015 to grow by 5-10 percent and its operational profitability (EBIT percent before non-recurring items) to be 12.0-12.5 percent. The guidance includes the impact of the L-3 Marine Systems International (MSI) acquisition. MSI is expected to contribute approximately EUR 250 million to net sales and EUR nine million to the operating result during 2015. Excluding purchase price allocation amortization, MSI’s operating result is estimated to reach EUR 16 million.
Previously Wärtsilä expected its net sales to grow by 0-10 percent and its operational profitability (EBIT percent before non-recurring items) to be 12.0-12.5 percent, excluding the impact of the MSI acquisition.
Björn Rosengren, president and CEO said: “Environmental awareness and changing energy needs are increasingly steering investments in the markets in which we operate. The industry dynamics are changing, and we have fine-tuned our strategy accordingly. We seek growth by offering innovative and energy efficient lifecycle solutions, as well as by leveraging our leading position in gas based technology.
“As we enter new market segments, such as Oil & Gas and LNG terminals, and acquire companies that bring new products to our portfolio, the scope of our offering becomes more than simply powering ships or building power plants. Therefore, we have decided to rename our Ship Power and Power Plants businesses Marine Solutions and Energy Solutions.
Supported by growth in service volumes and increased power plant deliveries, Wärtsilä’s second quarter net sales grew by 10 percent to EUR 1,230 million. I am especially pleased with the development of the Services business; the second quarter saw growth in both order intake and sales, and the market outlook remains positive. Profitability was 11.1 percent for the second quarter and 10.7 percent for the first half.
“In Energy Solutions, delayed decision-making in certain projects affected our order intake. However, our solid project pipeline gives me confidence in improved activity during the second half of the year. The marine markets continue to suffer from weak vessel demand caused primarily by overcapacity, depressed freight rates, and low oil prices.
“Marine Solutions’ order intake was on a good level despite the challenging market conditions. Still, we must ensure our future competitiveness in a low demand environment. Consequently, we have today announced plans to realign our Marine Solutions organization.
Our guidance has been updated to reflect the acquisition of L-3 Marine Systems International, which was finalized at the end of May. We now expect net sales growth of 5-10 percent and profitability to be 12.0-12.5 percent.”
By Reuters 2015-07-16 19:49:39
As Rio Tinto and BHP Billiton ship more iron ore than ever to China, the Australia mining giants face a fightback from Brazil’s Vale for market share that threatens to drive already weak prices even lower.
The Australian companies are set to report bumper iron ore production, with Rio Tinto on Thursday unveiling a nine percent rise in second quarter output. BHP is also expected to post a solid production gain on July 22, as the miners race to keep up exports to boost profits, with lower prices eating into margins.
They now face stiffer competition from Vale, which is also working its mines harder, after the world’s biggest producer won approval for its giant Valemax ships to unload in China, cutting down on freight costs.
With a capacity of 400,000 tons each, the 34 Valemaxes are the world’s biggest bulk carriers and twice the size of vessels used by Rio and BHP, but a ban on entering Chinese ports had severely curbed the cost efficiencies of the larger ships.
“BHP and Rio have been looking to raise volumes in this environment to maximize every ton,” said Morgans Financial analyst James Wilson.
“With Vale’s new ships plying the waters and the price where it is, it will be full-steam ahead over the next quarter, with more ore than ever coming out.”
Until recently, Rio and BHP have focused on displacing Chinese iron ore miners to capture market share as tumbling costs forced many of them to shut.
In the first five months of the year, Chinese imports of the steel-making ingredient from Australia were 242 million tons or 63.9 percent of total imports, up from the 58.7 percent market share Australia held in all of 2014.
Brazil has actually surrendered market share in recent years, with Chinese imports of 71 million tons in the first five months, or 18.7 percent of the total. This is level with 2014 but down from 22 percent in 2012.
But since late last year, Vale has been rebuilding its ties with China.
It has agreed to sell then lease back at least eight of its Valemax ships to Chinese firms and gained clearance for the vessels to dock at Chinese ports, ending a three-year ban and helping it to overcome higher freight charges by saving $4-$6 a ton, according to industry estimates.
The Brazilian miner also sealed a $16.4 billion expansion program in June with about $4 billion of Chinese financial backing that will allow the miner to produce an extra 90 million tons of high-quality, low-cost ore for shipment to China.
More immediately, Vale is replacing 25 million tons of higher-cost iron ore production with new, cheaper tons, while maintaining its 2015 target of 340 million tons, and has lowered its break-even price.
“It seemed to take many by surprise during the recent fracas over iron ore pricing that China was negotiating directly with Brazilian iron ore giant Vale to build alternative supply,” said Jose Blanco, chairman of the Australia-Latin America Business Council.
Vale plans to lift capacity by 36 percent to 450 million tons by 2018, easily eclipsing the additional combined tons BHP and Rio aim to put into the market as their expansions start to wind down.
“China apparently hopes to seek balance and increasing competition between its two biggest suppliers, and any costs cut by Vale which has higher logistics costs will help lower the cost curve for the whole sector,” said Xia Junyan, an analyst with Everbright Futures in Shanghai.
Iron ore has staged only a modest recovery to stand at $50.10 a ton after tumbling to a decade low near $44 last week, a price at which only the big low-cost majors can make money.
Australian miners are still producing at full tilt.
Australian port shipping data shows a year-on-year 32 percent rise in shipments to China in the June quarter from Port Hedland, which handles a fifth of the world’s seaborne iron ore.
“From our perspective, it’s all about return on investors’ capital,” said Neil Boyd-Clark, managing director of Arnhem Investment Management, which owns Rio and BHP shares.
“For these companies that can get that return through increasing production, it makes sense,” he said.
Rio has vowed to lift output 16 percent to 350 million tons this year. BHP expects its production to rise 2 percent to 250 million tons.
RBC Capital mining analyst Chris Drew expects an 11 percent rise in BHP’s quarterly output versus a year ago.
“They are saying ‘margins are down, so let’s just push it out’,” said Morgans’ Wilson.
By MarEx 2015-07-16 19:38:17
Oregon’s Senator Jeff Merkley has announced the Stop Arctic Ocean Drilling Act of 2015, a major piece of legislation to stop offshore Arctic drilling. The legislation would prevent any new or renewed leases for the exploration, development, or production of oil, natural gas or any other mineral in the Arctic planning area.
“A spill in the Arctic would be an environmental catastrophe of extraordinary proportions – and such a spill is inevitable if drilling proceeds,” said Merkley. “The ecosystem in the Arctic is too fragile and the ability to respond to a spill in this region is nonexistent. Drilling in the Arctic Ocean is the height of irresponsibility. We need to put it off limits, permanently.”
The Department of Interior estimates that there is a 75 percent chance of a large oil spill exceeding 42,000 gallons of oil should drilling leases in the Arctic be developed, says Merkley. To date, there has not been a successful oil and gas operation in the Arctic Ocean. The Arctic region is home to one of the world’s most delicate ecosystems, extreme and treacherous conditions, and severely limited capacity to respond to an oil spill or accident.
In 2010, when BP’s Deepwater Horizon exploded and began to sink, the nearest Coast Guard station was approximately 132 air miles away in New Orleans. In contrast, current proposals by Shell Oil Company to drill in the Chukchi Sea are over 900 air miles from the nearest Coast Guard station in Kodiak and over 1,200 miles from the nearest deep-water port in Dutch Harbor. The Gulf has one of the most comprehensive search and rescue infrastructures in North America, yet Deepwater Horizon dumped an estimated 4.9 million barrels (210 million gallons) of oil into the Gulf over 87 days.
The Arctic is home to endangered species such as bowhead whales, polar bears and ringed seals, as well as invaluable and fragile ecosystems that are critical to fisheries, migratory birds, indigenous populations and subsistence hunters. Opening development on a new fossil fuel reservoir in the Arctic not only puts the natural resources, ecosystems, and the dependent communities at risk, it also contradicts the President’s Climate Action Plan to limit greenhouse gas emissions and reduce climate change, says Merkley.
In June, Merkley led a group of Senators in authoring a letter to President Obama urging the Administration to rescind Shell Oil Company’s conditional Exploration Permit in the Chukchi Sea. Merkley wrote that new lease sales in the Chukchi Sea and Arctic Ocean are an unnecessary risk that threatens local communities, fragile ecosystems and efforts at climate change mitigation.
Friends of the Earth Climate Campaigner Marissa Knodel issued the following response: “President Obama should take a lesson in climate leadership from Senator Merkley. The “Stop Arctic Ocean Drilling Act” is exactly what we need to avoid the worst impacts of climate disruption and to protect the people and wildlife that call the Arctic Ocean home.
“As the bill states, the Arctic Ocean should be managed in the best interests of the American people, which includes keeping fossil fuels in the ground. To best serve those interests and stay true to his climate legacy, President Obama must keep the Arctic Ocean off limits to Big Oil’s toxic greed.”
Shell has tried to pre-empt some of the environmental concerns about oil spills with information and a video about their spill response capabilities. Shell says its onsite oil spill response assets would be deployed within an hour. This response capability has been inspected by the U.S. Bureau of Safety and Environmental Enforcement.
Additionally, Ben van Beurden, CEO of Royal Dutch Shell, acknowledge the need to address climate change, but see the move away from oil and gas as a gradual transition.
Van Beurden recently stated his position: “What the global energy system is experiencing – what it needs to undergo – is a transition from the traditional model based on oil and coal to a progressively cleaner, less carbon-intensive model. And that new configuration needs to be characterized by a greater share of natural gas and renewables – and a key role for carbon capture and storage…
“While we can probably all agree that an energy transition is happening, some sectors will be harder to decarbonize than others. In the case of oil’s role in transport, for example, that process will take decades.”
The bill is co-sponsored by Sen. Martin Heinrich (D-NM), Sen. Ed Markey (D-MA), Sen. Sheldon Whitehouse (D-RI), Sen. Bernie Sanders (I-VT), and Sen. Al Franken (D-MN).
A PDF of the bill is available here.
By Reuters 2015-07-16 19:10:23
Singapore state investor Temasek Holdings has put shipping company Neptune Orient Lines Ltd, which has a market value of $1.7 billion, up for sale, people familiar with the matter told Reuters.
Temasek has hired a bank to seek buyers for the business which made a net loss in five of the past six years, the sources said, as the fund with $197 billion under management seeks to boost its performance by shedding underperforming companies.
The sale of the business was widely expected, especially after Neptune, nearly 67 percent-owned by Temasek, sold its logistics business to Japanese freight carrier Kintetsu World Express Inc for $1.2 billion.
Last week, Temasek said the value of its portfolio had jumped by almost a fifth, helped by surging China bank stocks.
A Neptune Orient spokeswoman declined to comment.
Temasek Holdings was not immediately available for comment outside office hours.
The sources declined to be identified as the sale process is confidential.
The Wall Street Journal first reported the planned sale.
By MarEx 2015-07-16 18:54:52
The U.S. National Oceanic and Atmospheric Administration (NOAA) has invited public comment on the recently released draft 2015 edition of the U.S. Arctic Nautical Charting plan. The plan, a major effort to improve Arctic chart coverage that is inadequate for modern needs, was originally released in 2011.
Comments are due by midnight, October 1, 2015.
“Maritime challenges are increasing in the Arctic. As multi-year sea ice continues to disappear at a rapid rate, vessel traffic in the Arctic is on the rise,” said Rear Admiral Gerd Glang, director of NOAA’s Office of Coast Survey. “Given the lack of emergency response infrastructure in remote Arctic waters, nautical charts are even more important to protect lives and fragile coastal areas.”
For the first time, the U.S. Arctic Nautical Charting Plan provides information about existing, recently added, and proposed new electronic navigational chart coverage in U.S. Arctic waters. Additionally, it provides information about progress on publishing new Arctic charts and specifications for eleven proposed new charts.
The proposed new charts outlined in the plan will complement existing chart coverage. Seven of the charts will fill gaps in medium-scale chart coverage from the Alaska Peninsula to Cape Lisburne at the edge of the North Slope. Other larger scale charts will provide for safer passage though the Etolin and Bering Straits and for entry into harbors such as Barrow, the northernmost town in the United States.
“It is heartening that NOAA is taking a proactive step towards improving the level of coverage and accuracy of their Arctic chart suite,” says Captain Duke Snider, polar navigator and CEO of Martech Polar Consulting. “Though areas frequented by historical traffic in both American and Canadian Arctic waters are reasonably charted for the most part, increased traffic outside of those “historical” routes is now and will in the future demand filling in the gaps that exist today.”
More information is available here.
By MarEx 2015-07-16 17:42:32
Hyundai Heavy Industries and technology company Accenture are collaborating to design a connected smart ship as part of the shipbuilder’s plan to expand into maritime services provision.
The new project is designed to enable shipowners to better manage their fleets and achieve potential operational savings through the application of digital technologies.
Using a network of sensors that will be built into new vessels, shipowners will be able to capture a range of ship voyage information including location, weather, and ocean current data, as well as onboard equipment and cargo status data. By applying real-time analytics to new and historical fleet data and using data visualization technology to present the insights, shipowners will be able to monitor their vessel’s status and condition in real-time to make data-driven decisions that support more efficient operations.
Services are expected to include real-time alerts and warnings, predictive maintenance and more efficient scheduling.
The connected smart ship will be developed using a combination of Hyundai Heavy Industries’ shipbuilding and manufacturing expertise, and Accenture’s digital and shipping industry experience. As shipowners seek innovative new ways to reduce vessel operating expenses, this collaboration will deliver a range of real-time services to improve the efficiency of their ships, while simultaneously strengthening Hyundai Heavy Industries’ competitiveness.
“Businesses can gain a competitive advantage by embracing the connectivity wave underpinning the Internet of Things and integrating digital services into their products to keep pace with the next wave of innovation,” said Eric Schaeffer, senior managing director, Accenture.
“Our collaboration with Hyundai Heavy Industries utilizes our digital technology and deep industry experience to enable a traditional “products” company to adapt its business model, taking advantage of digital technologies like analytics. Hyundai Heavy Industries’ willingness to create value for its customers through adopting elements of the Internet of Things is a great step on its digital transformation journey.”
“Through this collaboration with Accenture, our ambition is to lead innovation in ship operations, shipping and the port logistics sector,” said Moon-kyoon Yoon, Chief Operating Officer of the Shipbuilding Division of Hyundai Heavy Industries.
The connected smart ship uses Hyundai Heavy Industries’ on-ship platform and the Accenture Connected Platforms as a Service (CPaaS). Services to be offered to Hyundai Heavy Industries’ customers through this collaboration include administrative and user management services and device management services. These help ensure all connected devices can be monitored and maintained remotely.
With real-time data collection and exchange across vessels, ports, cargo and land logistics, Hyundai Heavy Industries would be able to create additional services and revenue streams to customers across the lifecycle of ships and journeys, removing barriers between different elements of a ship’s operation. The collaboration is part of Hyundai Heavy Industries’ plans to expand its business, moving from manufacturing to services.
By MarEx 2015-07-16 17:10:15
In 2005, Bourbon became the first offshore operator to adopt an inverted bow vessel, the Bourbon Orca.
In 2006, the Bourbon Orca joined the Bourbon fleet, the very first inverted-bow AHTS designed by the Norwegian ship designer Ulstein. The main feature of this vessel: a slender hull water line and a smoother volume distribution in the foreship, particularly suited to the navigational conditions in the North Sea. The payoff: better handling and reduced pitching in rough seas.
“While a traditional bow vessel rises on the waves and then drops violently onto the surface of the water, an X-BOW vessel, less subject to the vertical motions induced by the waves, continues on course more smoothly, while maintaining its speed. And because it uses less fuel to get through the waves, it also helps to save energy,” says Tore Ulstein, Deputy CEO and Chief Market & Innovation Officer in Ulstein Group.
This type of vessel also offers more comfortable working conditions for the crew. “Less shaking, it also means less vibration, less noise and less splashing,” says Arnkjell Brandal, who was the first officer to command the vessel, until May, 2015. This seafarer, used to traditional bows, tells us of his first impressions on board. “It was like a shock, paradoxically. This vessel was nothing like what I had experienced before. But I soon felt the difference, especially in traction situations: fluidity, strength and stability!”
The Bourbon X-BOW story started in 2004, when Ulstein was working with Bourbon and several industry players on a project to improve the safety of anchor handling operations.
“Trond Myklebust, who at the time was Marketing Director of Bourbon Offshore Norway, challenged us: to rethink the design of parts of the vessel, including the bow,” explains Ulstein. For the Norwegian designer and shipbuilder, all the ingredients required to design tomorrow’s offshore vessel were assembled: the encouragement of a customer who is a leader in its market, a constant search for innovation, and a strong partnership with leading players. “Bourbon asked us to dare… and together we did it.”
The advantages of the X-BOW design were revealed late in 2004 and the start of 2005, when tested in a towing tank. As Ulstein explains: “We conducted these tests with scale models, but in real situations, with waves from different directions to analyze the vessel’s behavior. The very positive results encouraged us in this direction.”
In April 2005, Bourbon would go on to acquire its first X-BOW vessel.The Bourbon fleet now has one AHTS and six PSVs with the design.
The Bourbon Orca
The Bourbon Rainbow and the Bourbon Calm
The Bourbon Rainbow, the Bourbon Calm and the Bourbon Clear
The Bourbon Orca in operation