Cosalt plc Annual report & financial statements 2008

Business review
Cosalt Offshore predominantly operates in the subsea,
engineering and management sectors as well as the offshore
platform operators. Our current client base includes Exxon
Mobil, Shell, Talisman Oil, Wood Group Engineering, Amec,
Petrofac, PSN, Subsea 7, Technip, Acergy and Halliburton.
Since its inception in the summer of 2008, the division has,
with notable success, worked hard to expand the product and
service offering across our geographical footprint. We plan to
build on the strong relationships with our existing clients and,
through a pan-North Sea approach, expand the scope of those
contracts in providing clients with services across their entire
North Sea asset base.
Significant contract wins in 2008 include Perenco, Aker
Solutions, Taqa Britani, Wood Group, Exxon Mobil and Prosafe.
Future tenders are due in 2009 and Cosalt Offshore believes
strongly that with our strong current geographic footprint and
service offering we are uniquely placed to further increase our
market share.
In 2009 we expect to see a continued focus on expanding our
product and service offering with the addition of complimentary
products and services that fit the criterion of safety critical and
operationally critical third party verification which, in all cases,
will be driven by regulation.
We have already seen evidence from existing clients that the
industry is moving towards a market characterised by fewer
contracted partners providing an ever expanding range of
complementary products and services, across an expanded
geographic footprint together with providing a commonality
of safety, quality and service.
With this trend in mind, we see significant growth potential in
expanding our current contracts beyond their current locations,
and we have already widened our scope for Exxon Mobil,
Energy Cranes, Subsea 7, PSN and Vallourec & Mannesman
to cover more than one geographical area.
In a sector where product safety and service quality is
paramount, Cosalt Offshore has invested heavily, thereby
adding to our resources and reforming our technical support
business into a department called Cosalt Compliance.
Cosalt Compliance was created from existing expanding
technical support functions and developing new elements
of service provision to satisfy the need for both internal and
external legislative and technical expertise.
The department provides the Cosalt Organisation with quality
assurance, health, safety and environmental management,
competence assurance and technical support in the form of
procedures and work instructions.
Cosalt Offshore
Calum Melville
Managing Director Cosalt Offshore
External functions include the provision of integrity
management services directly to clients, including compliance
auditing, document development and review, examination/
inspection/maintenance strategy development. In essence,
Cosalt Compliance offers comprehensive lifting operations
integrity management as standard.
The growth in our product and service offering in 2009 will
come from a combination of organic growth and selective
acquisitions. Cosalt Offshore believes that 2009 will provide
some attractive opportunities at realistic multiples across all
the geographic areas we currently and intend to operate within.
We believe that a sustained low crude oil price will lead to
a restructuring of the industry as our clients and the industry
in general continue to look at reducing their supplier base
and enter into longer-term contracts with partners who
cover a wider geographic footprint providing a wide range
of complementary services.
The division also plans to expand its geographic foot print
beyond Europe into the Gulf of Mexico to take advantage of
an increasing market supported by a number of our significant
clients that already have significant operations in the region.
In summary, although we expect market conditions to be
tougher in 2009, Cosalt Offshore firmly believes that the
strategy set out and implemented in 2008 will continue
to provide significant opportunity for revenue and margin
improvement.
Far left
Testing an offshore
cargo unit
Left
Servicing of portable
lifting equipment in
Cosalt’s Aberdeen facility
Cosalt plc Annual report & financial statements 2008
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