German-based heavy-lift carrier SAL is facing “drastic structural reform” according to parent company “K” Line, in its 2016 annual report.
“K” Line said that while SAL is implementing cost cuts and efficient fleet allocation to try to improve earnings, a study on more severe reforms has already started.
SAL’s operating revenue and profit declined as severe market conditions continued, particularly with regards to offshore projects, “K” Line said. When contracts requiring large vessel transport and other work concluded by the second quarter, financial results further deteriorated.
SAL operates a fleet of about 16 vessels according to its website. The carrier sold an owned 19-year-old vessel in the second half of 2015 and a vessel chartered under short-term contract was redelivered.
“K” Line said several large projects scheduled to start in 2016 will boost demand for project-related transportation, and it found signs the market is bottoming out.
The parent company sees opportunities for the medium- to long-term for SAL’s two large vessels with 2,000-ton crane capacity, the Svenjaand the Lone, for profitable energy resource-related transportation and other offshore work. It will also seek better utilization of its small and medium-sized vessels through infrastructure-related projects as well as conventional transport.
“K” Line initially entered into joint venture with SAL in 2007 until “K” Line became the sole shareholder in 2011.
