(Commonwealth) _ James Fisher, in its recent update on Thursday, affirmed that its underlying trading remained resilient throughout the second half of the year, aligning well with market expectations despite ongoing challenges in certain areas.
The statement from the London-listed firm indicates that the performance of its divisions remained steady throughout both halves of the reporting period. This consistency was primarily driven by favorable conditions observed in the energy market, which positively impacted the overall performance across multiple business segments. However, despite the general positivity, ongoing challenges persisted within the North Sea inspection, repair, and maintenance (IRM) sectors, as well as in decommissioning activities. The firm’s ability to maintain consistent performance across divisions suggests effective management and adaptation to market conditions. Despite facing hurdles in specific sectors, the firm’s overall resilience reflects its capacity to navigate challenges while capitalizing on favorable market conditions. This balanced approach underscores the firm’s stability and strategic positioning within the industry, despite localized difficulties in certain operational areas.
Despite facing challenges in the defense division, particularly in meeting revenue projections from large project orders due to prolonged procurement timelines, there’s a positive outlook for enhanced performance in the upcoming year, 2023. This optimism stems from the implementation of efficiency measures within the division and the presence of a robust pipeline of projects. These strategic initiatives are expected to drive growth and profitability moving forward, positioning the defense division for success. On the other hand, the maritime transport division reported solid performance during the reporting period. Tankships within this division achieved high utilization rates and maintained stable day rates, indicating efficiency and profitability within this segment. Additionally, fendercare operations in Brazil saw increased activity, further contributing to the division’s overall positive performance. These achievements underscore the strength and resilience of the maritime transport division within James Fisher, positioning it as a key contributor to the company’s success.
The company highlighted further progress in its transformation efforts during the latter half of the year, with strategic actions taken to streamline the portfolio and enhance financial performance. This included the cessation of operations at Subtech Europe in December due to sustained losses attributed to heightened competition and seasonal fluctuations in North Sea operations. Despite facing ongoing restructuring, refinancing, and expenses related to business closures, James Fisher foresees that non-underlying cash costs will maintain a similar level to those reported in the first half of the year. This indicates the company’s commitment to managing and controlling these costs effectively, despite the challenges posed by these activities. In regards to its financial position, the group has reported a reduction in borrowings during the latter half of the year. Specifically, the pre-IFRS 16 net debt decreased to £140 million as of December 31 from £147 million on June 30. This reduction in debt signifies progress in the company’s efforts to strengthen its financial position and improve liquidity. It reflects prudent financial management and may indicate positive developments in the company’s overall financial health and stability.Jean Vernet, the Chief Executive Officer (CEO) of James Fisher, conveyed a sense of optimism regarding the advancements observed across the company’s three divisions. He highlighted the ongoing implementation of operational enhancements and underscored the establishment of foundational elements crucial for the company’s recovery. Vernet reaffirmed the company’s dedication to continuous efforts aimed at simplifying its portfolio, a strategic initiative intended to fortify the company’s financial position and enhance its overall performance. Additionally, he emphasized James Fisher’s commitment to investing in capabilities that will serve as a solid platform for sustainable growth in the future. James Fisher’s update reflects a mix of challenges and opportunities, with a focus on resilience, operational efficiency, and strategic initiatives aimed at driving future growth and performance improvement.
