The boss of energy service company Hydrasun said yesterday he was seeing signs of a long-awaited improvement in fortunes for the beleaguered oil and gas sector.
Chief executive Bob Drummond, who has been at the helm at Hydrasun since leading a management buy-in of the business in 2002, added: “I have not called the bottom of the market yet … but I am beginning to feel just a tiny bit more confident that there is a turning point happening.”
Mr Drummond said the order book at Aberdeen based Hydrasun was up for the first time in several months, with sales worth £15million, while a strong pipeline of opportunities could rake in another £88million.
Inbound bookings have exceeded £1million in each of the past three months and Mr Drummond expects another rise in the order book value in January.
“I am not saying it is a trend just yet but we are seeing very encouraging signs,” he said, adding: “There seems to be a settling down of budgetary planning cycles.”
The cautious optimism comes on the back of better oil prices and emerging signs of a willingness among oil and gas operators to invest again.
Mr Drummond, who has seen a few turns of the cycle in his career, was speaking after results from Companies House showed Hydrasun Group Holdings suffered a widening of losses and 30% slump in turnover during the year to the end of March.
The company was forced to cut its workforce by nearly one-fifth in response to the savage oil and gas downturn.
But Hydrasun, which specialises in integrated fluid transfer control equipment and services for the energy, original equipment manufacturer, marine, renewables and defence industries, continued to increase its global footprint and invest in research and development.
Pre-tax losses totalled £24.6million, compared with losses of £8.4million a year earlier. Turnover in the latest period was £77.7million, down from £110.4million previously.
The firm’s global workforce – spread across operations in the UK, the Netherlands, the Caspian region, the Middle East and the US – shrank to 525 people, from 633 in 2014/15. Further job cuts since the year-end have reduced the total to 425, including 260 in Aberdeen.
Group-wide restructuring in 2015/16 saw two overseas subsidiaries shut but also investment in a new facility in Glasgow.
Summing up the year in the accounts, Mr Drummond said this helped give the firm a platform for “further progress and development” after a challenging year.
Cost-cutting and other efficiencies meant earnings before interest, tax, depreciation and amortisation as a proportion of sales were in line with previous years, while cash flows remained strong, he added.
Mr Drummond cited the Caspian region, the Middle East, Norway, west Africa and Gulf of Mexico as areas where progress was achieved in exports worth nearly a third of total turnover.
North Sea operations maintained their “strong market position” and regional branches in the central belt and north-east England did “reasonably well”, given market conditions, he added.