Norway based services firm Subsea 7 said Wednesday that it will reduce its capacity by 12 vessels, up one vessel from its previously announced plan.
CEO Jean Cahuzac said the company will cut 2,500 positions, as previously announced, and also reduce its capacity by 12 vessels.
The cuts are expected to be complete by early 2016.
At the end of 2014, the company’s fleet consisted of 39 vessels with another five under construction.
The cuts are expected to deliver annualized savings of $400 million in employe related costs and about $150 million savings related to vessel costs.
The company has not disclosed the names of the vessels that will be trimmed from its fleet.
Subsea 7 booked a second quarter revenue of $1.35 billion, down $553 million from the same quarter last year.
Net income dropped to $88 million, down from $266 million in the second quarter of 2014.
The company’s net operating income fell to $168 million from $351 million in the prior year quarter.
Earnings per share slid to $0.29 from $0.82 per share during the same quarter last year.
The company said the revenue fall reflects “the difficult industry conditions and declining workload.”
Subsea 7 also took a $100 million charge in the second quarter for its cost reduction program, out of an estimated total charge of $140 million.
The company’s net debt fell to $151 million from $288 million at the end of the first quarter, thanks to $297 million net cash generated from operating activities in the second quarter, including a decrease in net operating assets.
Global vessel utilization increased to 82 percent in the second quarter from 68 percent as the offshore phase of several projects progressed significantly and activity in the North Sea increased due to seasonally better weather.
The company’s board of directors also authorized a 24 month extension to the $200 million share repurchase program initiated in July 2014, Subsea 7 added.