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Pipeline technology specialist STATS (UK) Ltd generated revenues of £39.1 million and EBITDA earnings of £5.6 million according to its annual accounts as at 31 December 2019.
Despite the impact of the Covid-19 pandemic and the fall in the price of oil, STATS said it was confident its 2020 performance and activity levels would be broadly consistent with those of 2019.
While revenues dropped by 10%, down from £43.4 million, the accounts noted that the largest ever contract completed by STATS, for a major Abu Dhabi client, had made a significant contribution to its 2018 results.
Based in Kintore, near Aberdeen, STATS principal activity is the provision of pressurised pipeline isolation, hot tapping and plugging services to the global oil, gas and petrochemical industries.
The company’s success in recent years of internationalising its business continued, with 85% of revenues derived from projects executed outside of the UK, a rise of 5% on 2018.
Milestone achievements in 2019 included increasing its market presence in the US where revenues grew by 176% on the previous year, completing a major isolation campaign in Malaysia, and progress on long term contracts in the Norwegian North Sea and Nigeria.
Diversification away from a rental-only model of the company’s patented isolation tools to include product sales had found particular success in Canada and the Middle East, while there was strong demand for the group’s Type Approved mechanical pipe connectors in the UK oil and gas sector.
Relocating to larger facilities in Canada had allowed the ramping up of the in-house design and manufacture of pipeline fittings to North American clients, while a move to larger premises in the United Arab Emirates and the opening of a new operational site in Oman had strengthened STATS presence in the Middle East. In addition, a Memorandum of Understanding with Sakhalin Energy Investment Company and INTRA was signed in 2019 for a long-term frame agreement covering isolation works in Russia.
STATS Group Chief Executive Officer, Leigh Howarth, said: “As Covid-19 evolved into a global pandemic during the early part of 2020, this had an impact on our trading performance. Not surprisingly, several significant contracts which had been a long time in planning were postponed by our clients until later this year or 2021, but on the positive side there is healthy programme of work ahead of us.
“The response from our staff across all our global locations in dealing with the changed environment was outstanding. The introduction of new working practices has allowed us to continue delivering our services and, encouragingly, secure new work. As a result, and notwithstanding the impact of Covid-19 and the resulting lower demand for oil and the subsequent drop in price, we are optimistic that activity levels in 2020 will be broadly consistent with those of 2019.”
The group’s pre-tax profits for 2019 were £0.2 million compared to £2.5 million in 2018, while EBITDA earnings decreased from £7.6 million in 2018 to £5.6 million. Investment continues in to research and development activities relating to STATS’s proprietary technology products and to secure patents and trademarks where appropriate.