Titanic manufacturer Harland & Wolff in ‘several negotiations’ for renewables contracts worth up to £200m
- Several clients are looking to build renewables infrastructure at its yards
- These contracts are expected to be ‘key’ in boosting revenues in the years ahead
- H&W also going ahead with its plans to increase the UK’s gas storage capacity
Titanic manufacturer Harland & Wolff has said it is in ‘several negotiations’ with clients looking to build renewables infrastructure at its yards.
The contracts, worth between £30million and £200million, are ‘complex and multi-year’ and are expected to be ‘key’ in boosting revenues in the years ahead as the UK strives towards decarbonisation, the company said on Monday.
Aside from its historic pedigree, Harland & Wolff’s shipyard has been used more recently to build offshore wind turbines, while its giant Samson and Goliath cranes are considered Belfast landmarks.
Samson and Goliath, the twin shipbuilding cranes at Harland & Wollf shipyard in Belfast
‘Project developers have now become conscious of the lack of fabrication capacity across the UK and are making efforts to book capacity’, it said as it unveiled its unaudited annual results.
The marine engineering company, which was bought for £6million by Infrastrata two years ago after collapsing into administration following the bankruptcy of its former Norwegian owner, also confirmed it is going ahead with its plans to increase the UK’s gas storage capacity.
Amid the growing concerns about the UK’s gas supplies, its Islandmagee underground gas storage plant off the coast of Northern Ireland was given the green light earlier this month.
Harland & Wolff now expects to receive a full marine licence within the next two weeks and could eventually hold over 25 per cent of the UK’s storage capacity.
In the future, the facility could instead be used for the storage of hydrogen.
‘As the UK economy progressively transitions from natural gas to hydrogen, large scale hydrogen storage will be critical for the success of this transition,’ it said.
‘The Company believes that lessons have to be learned from the failure to check natural gas price volatility and one of the widely recognised mechanisms to mitigate against such price and supply volatility is to have adequate domestic storage capacity,’ it added.
Harland & Wolff also confirmed it is making ‘good progress’ on work to manufacture eight wind turbine jackets on an offshore wind farm project in Scotland.
It comes as the company increased revenues seven-fold to £10.2million in the year to the end of July, from £1.5million the year before.
But pre-tax losses widened to £16.6million in the year to the end of July, from £10.4million in the previous year, reflecting ‘an increase in the number of personnel and overall overheads’.
Harland & Wolff’s shipyard has been used more recently to build offshore wind turbines
Chief executive John Wood said the company’s earnings before interest, tax, depreciation and amortisation are set to turn positive again next year.
‘In order to establish our credibility within the industry, it has been essential to bring the yards back into full operation only after completing all the necessary upgrades to meet best of class technical and operational standards. I am delighted that we have now achieved that,’ he said.
‘Whilst the increased level of spending in the short-term hurts cashflows, and we are very mindful of that, it is, however, absolutely necessary that we invest in the business now in order to reap its benefits in the months and years to come.
He added: ‘With a footprint of over 250 acres, we are now the largest business dedicated to the marine construction and fabrication industry in the UK.
‘With our investments in people and systems across the Group, we are in our best ever position to bid for and consummate larger long-term contracts as we strive to enhance shareholder value.
‘We estimate that at circa 80 per cent utilisation of the facilities, Harland & Wolff is capable of generating revenues of c£500m per annum. Whilst we have a lot of work to do to get to that level, the business is now starting to move in that direction with momentum being built across all our five markets.’
Harland & Wolff shares rose 1 per cent to 26.77p in morning trading on Monday.