Sif books strong 9-mo EBITDA despite project delays

Image by Twitter, @SifGroupbv

November 7 (Renewables Now) - Dutch steel tubulars manufacturer Sif Holding NV (AMS:SIFG) closed the first nine months of 2019 with a 12.3% year-on-year increase to EUR 14.6 million (USD 16.2m) in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).

Contribution, which Sif calculates as revenues minus cost of raw materials, subcontracted work, logistics and other project-related charges, was up 16.8% pulling in EUR 66.6 million.

Sif increased production between January and September to 140 Kton with 95% of orders coming from the offshore wind industry, it said in its latest financial report.

Other key financial figures are presented in the table below:

In EUR million (unless otherwise stated): 9-mo 2019 Y/Y change Q3 2019 Q3 2018
Contribution 66.6 16.8% 21.1 11.4
Adjusted EBITDA (loss) 14.6 12.3% 1.8 (1.1)
Production (in Kton) 140.0 40% 46.0 19.0
Order book as of Nov 7 2019 (in Kton): For the remainder 2019 For 2020 For 2021 and beyond
-- contracted 47 165 108
-- exclusive negotiation 0 80 0
-- total for the year 47 245 108

While satisfied with tender activity and order intake during the third quarter, the company said the delay of the Borssele III and IV offshore wind projects put a significant strain on its production lines affecting its work on other projects. To manage multiple projects and meet the deadlines, Sif said it had to boost its workforce and pay for additional shifts and overtime.

The third-quarter production output of 46 Kton is an increase in year-on-year terms, however, quarter-on-quarter, it came down from 52 Kton, which coupled with other production line-related factors left a negative impact on the contribution margin.

Sif booked its order of 84 monopiles, or 103 Kton, for the US Vineyard offshore wind farm for next year. However, with that project being delayed as well, the company believes it is less likely it will start production for Vineyard in 2020.

Sif says it has been holding talks with the client and working on different scenarios that may include manufacturing a part of the order next year or delaying the project indefinitely.

While the 2020 horizon is unclear, Sif is optimistic about 2021 having booked a 108-Kton order for the zone 4 of the Hollandse Kust Zuid offshore wind farm in Dutch waters.

(EUR 1.0 = USD 1.108)

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Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.

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