OEG Energy Group is pleased to provide a full year update for 2023, and outlook for the year ahead.
2023 was a year of strong financial performance and acquisitive growth for the OEG Energy Group, achieving the key milestone of 50% of Group revenues derived from the Renewables division, while continuing to pursue an ambitious growth strategy underpinned by an expanded service offering, robust market drivers and a commitment to innovation.
Commenting on OEG's performance and outlook, John Heiton, Chief Executive Officer said:
"2023 was a transformational year for OEG as we took large strides towards our strategic goal of building a more material business that is diversified across complementary energy markets. Such was the rate of growth of our Renewables business in 2023 that, despite continued growth of our Offshore business through the year, Group revenues are now well balanced across our two divisions of Offshore and Renewables which is a major milestone when one considers OEG had zero exposure to renewables in 2020.
As the offshore energy industry continues its structural transition, OEG is firmly positioned for growth, leveraging our core capabilities in supporting offshore energy projects honed over our 50-year history. The growth has resulted in a step change in our financial profile and the Group has substantial financial firepower to pursue opportunities that will maintain this growth trajectory. OEG will continue to place a significant emphasis on innovation in technology and sustainability, as we seek to position the company as a leader in supporting a responsibly managed global energy transition.
2024 looks set to be another year of strong growth for OEG as it leverages its established profile, expanded service offering, global footprint and strong balance sheet to achieve its near-term target of generating $1 billion in annualised Group revenue in the next few years".
- Strategic focus on maintaining market leading position in the provision of Cargo Carrying Units (CCU) and associated equipment to the whole energy industry through its OEG Offshore division, while expanding its position as a key player in the growing global offshore renewables sector.
- Strong financial performance with FY pro-forma revenues of $434m, a 35% increase over the previous year (2022: $322m).
- Rapid expansion of Renewables business resulting in key strategic milestone of approximately 50%/50% revenue split across OEG Offshore/OEG Renewables and a balanced business with exposure to complementary growth markets.
- OEG Renewables was launched, bringing all subsea, topside, cable handling and marine specialist services under one integrated division to deliver significant value to customers across both construction and operations phases for offshore wind farms on a global basis.
- OEG Renewables made 5 acquisitions in 2023 including subsea cable construction specialists Pelagian, submarine cable installation specialists 23 Degrees Renewables, survey specialists Geosight, subsea specialists Bluestream and topside marine coordination specialists Marine Coordination Services demonstrating our commitment to and resilience through the energy transition.
- Expansion of international footprint with growing activities in the Americas, Europe, Middle East and Asia Pacific, boosted by OEG Renewables acquiring Dutch businesses Bluestream and Marine Coordination Services as noted above, which will form a hub for OEG Renewables in mainland Europe.
- Investment accelerated into its fleet of high specification cryogenic tanks for the carriage of industrial gases, with $10m now invested in the last two years. This brings additional diversification to OEG's revenues through this exposure to the global industrial gas transportation market.
- Strong free cash flow generation combined with $140m of new committed financing ensures liquidity to achieve ambitious growth objectives.
- New management structure established to strengthen OEG's leadership team and its ability to accelerate its ambitious growth plans.
- New brand identity to reflect the rapid expansion and strategic diversification that has been achieved over the last few years to support an evolving market focused on sustainability.
- Continued to grow and develop the team with headcount across the group increasing 10% through the year to over 1,000 at year end 2023.
- Enhanced sustainability disclosure to meet stakeholder expectation, with formal publication of OEG Group's ESG performance including positive impact and decarbonisation agendas.
- Significant progress in de-carbonising OEG's own activities with 23% reduction in emissions from OEG Offshore UK's own operations following investment in more efficient operations and lighting as well as a fleet of electric vehicles in UK and Norway.
Market Leader and Key Player in Offshore Energy Projects
OEG, which in 2023 marked its 50th anniversary since inception, has established itself as both the global market leader in the provision of CCU and associated equipment, and as a key player offering specialist subsea, cable, topside, and marine services to the offshore renewables sector. During the year the company continued to actively pursue its ambitious growth strategy, leveraging its robust financial performance, global footprint, and core capabilities to provide critical solutions to a global offshore energy industry that is in transition.
A key milestone achieved this year was the growth in OEG Renewables revenues to approximately half of the Group's pro-forma revenues of $434m. The renewables division has continued to expand its service offering and has established itself as a key player on major offshore wind projects in the UK, the EU and Taiwan, and is positioned to grow into emerging markets such as South Korea and the USA, markets in which it has received new contract awards to be delivered in 2024 and thereafter. Through organic and acquisitive growth, OEG Renewables has strengthened its service offering and operating footprint, creating new opportunities to offer integrated service solutions to its blue-chip clients.
Focus on Innovation and Sustainability
OEG also underlined its commitment to environmental sustainability with the successful delivery of containerised electric vehicle charging hubs in Norway as well as portable battery temporary power solutions in the UK. Internally OEG continued to progress its own de-carbonisation with a 23% reduction in OEG Offshore UK's own emissions through investment in operations, more efficient lighting and a fleet of electric vehicles in Norway and UK.
OEG's own impact agenda continues to evolve and this year saw the publication of our formal Sustainability Report that details our management of environmental, social and governance matters and initiatives to minimise our negative impacts over time while innovatively supporting our clients with their own sustainability objectives.
Positive Outlook for 2024 underpinned by strong market drivers
Market drivers in the global offshore energy space are expected to remain robust, with installed capacity within offshore wind forecast to grow at ~22% p.a. reaching 344GW operating capacity by 2035. The growth of OEG's Renewables business ensures exposure to the growing offshore wind markets and OEG expects to be actively involved with most of the major global offshore wind projects over the next few years.
In parallel, OEG continues to develop its market leading position in the provision of CCUs and associated equipment to the energy industry, underpinned by strong market drivers in a buoyant offshore market as global policy makers continue to prioritise energy security and oversee continued investment into emerging offshore markets such as Guyana and Namibia where OEG has growing exposures.
While oil and gas will continue to be a critical component of the global energy mix for the foreseeable future, and global demand is forecast to rise by 1.1 million barrels per day(bpd) in 2024, OEG's strategic priority is to position the Group as a global leader in the provision of mission-critical services and solutions supporting the energy transition and maintaining energy security.
Based on the supportive market drivers, the active tendering pipeline and the organic growth expected to be delivered across the Group's expanded global footprint through operational synergies and cross-selling opportunities, OEG expects to deliver revenues in the region of $500 million for FY'24 as it progresses toward its more ambitious annual revenue target of $1 billion.
OEG will continue to grow organically, and through acquisition, expand its service offering and operational footprint in existing and new markets, with a continued emphasis on offshore renewables.