Marine engineering group James Fisher and Sons has seen half-year profit in its offshore oil division tumble by 55 per cent.
The company said revenue in that arm dropped to £36.1 million in the first six months of the year, from £55.6m, as customers reacted to the lower oil price environment.
It said its Norwegian operations were particularly badly affected by the price slump.
Operating margins in offshore oil were slashed from 21.5 per cent to 14.7 per cent which resulted in underlying operating profit falling from £11.9m to £5.3m.
However James Fisher signalled it has limited exposure to the exploration end of the market and believes it is well placed to benefit from spending on maintenance and repair work.
It said: “Such expenditure cannot be delayed indefinitely and is not dependent on a recovery in the oil price.”
Overall group revenue was down from £216.1m to £213.1m with underlying pre-tax profits at £17.8m, lower than the £21.9m booked in the same period of the previous year.
The marine support division saw a six per cent rise in revenue to £87.2m with underlying operating profits marginally down to £7.4m.
The specialist technical division, which provides submarine and diving services, saw revenue rise sharply from £51.8m to £63.7m with profits up from £4.5m to £5.6m.
The tankships arm, which transports clean petroleum products, increased profit from £1.9m to £3.3m in spite of a drop in revenue from £26.6m to £26.1m.
Nick Henry, chief executive, said: “We expect to see a stronger second half with good trading continuing in specialist technical and tankships, reinforced by a resumption of growth in marine support.
“We continue to be well positioned on a number of significant contract bids across the group. In offshore oil we have scaled our business to meet current conditions in the oil and gas sector.”
Chairman Charles Fisher said the company “remained alert” to new opportunities that a tougher environment “will surely bring”.
Alex Paterson at Investec kept a buy rating on the stock and said: “[The] results show good underlying progress in three divisions with underlying operating profit rising by 15 per cent, but headline results are impacted by the weakness in its Offshore Oil division.”
The company owns the likes of Divex, RMS Pump Tools, Buchan Technical Services, Scotload, James Fisher Offshore and ScanTech Offshore in Scotland.
In February this year it bought the National Hyperbaric Centre in Aberdeen in a deal worth up to £4.5m.
Since then it has acquired the assets of Aberdeen companies Specialist Subsea Services and X-Subsea from administrators.
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