Offshore oil and gas and renewables supplier Royal IHC has reported a £42.4m operating loss in its latest set of accounts, which the firm says reflect a "disappointing" year.
The company was forced to downsize with the loss of 79 jobs as well as more contingent workers as turnover plummeted from £123m to £49.1m in 2020 - set out in documents only just filed at Companies House.
The engineering outfit, which is owned by the Dutch shipbuilding company IHC Merwede and also builds products for the telecoms market, said it anticipated losses of up to £25.8m on one project alone, owing to what it called contractual and technical issues.
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And it was also revealed the firm was leaving its long standing Stocksfield headquarters- which it said had been largely unused since January 2021 - pending negotiations with its landlords about an early exit via a break clause in the lease.
Royal IHC said it was realigning its strategy to "create a healthy organisation" that would employ roughly 160 full time staff.
Writing in the accounts, director Anton Paul Marie van der Harten said: "Throughout the organisation, the focus will remain on increasing efficiency, decreasing costs and improving the balance between revenues and risks, by enforcing stricter contract and project management and the new order acceptance process.
"IHC will strengthen where necessary, as the workforce is an important enabler to realise our goals, but will also 'right size' the organisation to reduce complexity and improve execution efficiency.
"We are convinced that with the support of our stakeholders and proposition that IHC holds the keys to success - specialist domain knowledge, adherence to the highest quality, and the craftsmanship of our workforce. The profitability and future outlook depend on the winning of new orders and the 'on specification', 'on budget' and 'in time' realisation of projects."
Some success had come in the shape of new contracts for a cable plough upgrade and cable lay spreads and a subsea trenching vehicle which has already been delivered to a Mexican customer. And despite the losses Royal IHC said it would continue to invest in research and development.
The firm urged caution on its future prospects, however, saying it was reliant on contributions from its parent company in Holland and acknowledged that there can be no certainty the support will continue.
Mr van der Harten said: "The Covid pandemic has caused global disruption, with significant negative consequences for human health and economic activity. This has increased unprecedented levels of uncertainty in the UK and beyond and makes it challenging to firmly predict its long term effects on Royal IHC limited.
"A range of measures have been introduced by the company to minimise the impacts of the pandemic, however in the short term, the company is exposed to risks and uncertainties that impact the financial outlook of the group as a whole, most notably relating to the successful completion of large contracts in 2022."
