The UK arm of US helicopter giant Bristow has reported a narrowing of annual losses but it continues to rely heavily on goodwill from its parent.
Accounts lodged at Companies House show Bristow Aviation Holdings (BAH), which comprises North Sea oil and gas operations, as well as search and rescue services, including those supplied on behalf of the Maritime and Coastguard Agency, and ad-hoc helicopter and fixed wing flights, made pre-tax losses of £227.4 million during the year to March 31 2021.
But this was a substantial improvement on losses totalling £486.5m in 2019-20.
The heavy cost of Covid
Turnover plunged to £680.2m in the latest period, from £835.8m previously, as the Covid-19 pandemic considerably disrupted activities during the year under review.
BAH, which also has international interests in locations including Nigeria, Australia and the Caribbean, said lower infection rates and the roll-out of vaccinations was helping drive economic recovery.
However, it added: “The return to a normal business and economic environment, as well as the capital spending decisions of oil and gas producers, will, ultimately, depend on infection rates and the pace of deployment of the vaccine.”
And it warned there may be further woe for businesses like it that rely on a healthy oil and gas industry.
BAH said: “Although oil and gas prices have recovered from their 2020 lows, if Opec+ is unable to agree on production limits in the future, it could cause prices to decrease.”
The biggest share of BAH’s revenue is linked to oil and gas production.
BAH’s 2019-20 losses were inflated by the impact of disposals. The company booked a £26.2m loss that year from the sale of Eastern Airways.
Total debt up by 23.5%
As of March 21 2021, BAH had net liabilities totalling £1.68 billion – up by 23.5% from £1.36bn the year before.
Most of the company’s debt is to its Houston-based parent, Bristow Group Inc or its other subsidiaries.
BAH said the total debt was mainly a loan and accrued interest to a group subsidiary based in Panama.
It added it expected to have enough cash – through its parent – to cover any repayments as they fall due, regardless of any “possible downsides” to trading activity, including as a result of the Covid-19 pandemic.
BAH admitted this forecast was based on Bristow Group Inc not seeking repayments of any sums currently due to the group – a total of £117.6m – within a year, and the parent providing additional financial support if required.
But it added: “Bristow Group Inc has indicated its intention to make available such funds… and that it does not intend to seek repayment of the amounts due at the balance sheet date, for the period covered by the forecasts.”
BAH qualified this statement by saying that “as with any group placing reliance on such financial support” this continued backing could not be guaranteed.
Business as usual?
However, it said the directors had no reason to believe this support would not continue.
And inquiries into the financial performance and position of Bristow Group Inc – the world’s largest helicopter operator – had not identified any concerns, the firm added.
BAH and its parent declined to comment directly on financial matters.
A statement from Alan Corbett, the group’s senior vice-president for Europe, Africa, Middle East, and Asia, said: “We are committed to providing safe and efficient service throughout the North Sea, as we have for more than 70 years, while working hard with our clients and partners in the supply chain to help the sector meet the challenges of the energy transition.”
A spokesman for Bristow said headcount across the group’s UK operations totalled 963 during 2020-21, but he was unable to say how many of these were based in Aberdeen.