Hydrasun’s boss has said the “unity of effort” shown by the firm’s employees and people in the wider oil and gas industry made 2020 a hard but “strangely rewarding” year.
Chief executive Bob Drummond said staff had pulled together during a tough period for the Aberdeen-headquartered supplier of fluid transfer, power and control solutions to the energy sector.
Mr Drummond also paid tribute to fellow Oil and Gas UK board members for their work on the North Sea Transition Deal application.
He believes such an agreement would be a “major catalyst for putting some momentum” into the energy transition.
The UK Government recently pledged to agree a deal in the first half of 2021. It is expected to stimulate investment in low carbon technologies such as carbon capture and storage, and hydrogen, which traditional oil sector players aim to help develop.
The Forties pipeline shutdown will deliver another “shot in the arm” if it goes ahead in May-June, a year later than expected due to the pandemic, Mr Drummond said.
Pipeline owners Ineos need to shut down the system for about 35 days to carry out improvements as part of a £500 million investment announced in 2018.
Many companies whose platforms export via the pipeline will try to synchronise their own maintenance shutdowns during that period, creating a “proper run of work” for the supply chain, Mr Drummond said.
He described the shutdown as a “good psychological reference point” and “morale booster” for the oilfield service sector, assuming it doesn’t get derailed by the latest uptick in Covid-19 infections.
Hydrasun has reported strong growth for the year to March 31 2020. Pre-tax profits rose 56% year-on-year to £6.68m on revenue that was 12% higher at £81m, accounts filed with Companies House show.
Earnings before interest, tax, depreciation and amortisation (ebitda) rocketed by 47% to £9m.
The firm was buoyed by increased demand for its core products – integrity assurance and reliability services, hydraulic services, umbilicals and subsea connectors – and stronger international sales, which now represent 40% of turnover.
Mr Drummond said the slump in offshore activity caused by the pandemic and last year’s crude price rout would lower 2020-21 revenue by 10% and ebitda by 25%. The decline would be worse but for Hydrasun’s “resilience”, he added.
The firm’s investment in a £2.5m machine for making larger subsea umbilicals – activated about a year ago – has also resulted in some lucrative contract wins, partly offsetting the impact of the pandemic.
Mr Drummond said he regretted having to make 37 people redundant, including 33 in the north-east, despite making use of the UK Government’s furlough scheme.
The company, which also has UK bases in Aviemore, Glasgow and Stockton-on-Tees, as well as operations in mainland Europe, North America, the Middle East and Africa, now has a global headcount of 405, of whom 231 are in the Granite City.
Accounts for Hydrasun’s London-registered parent, Hydrasun Group Holdings (HGH), showed a narrowing of pre-tax losses to £21.1m in 2019-20, from £26.6m the previous year.