Early July 2019 Sif and Vineyard Wind announced the manufacturing by Sif of 84 monopiles for Vineyard Wind's offshore wind project in Massachusetts USA.
The installation of the monopiles is subject to a schedule that includes seasonal restrictions on pile driving activity as a protective measure for the highly endangered North Atlantic Right Whales. Sif's ability and confidence to meet this schedule was an important consideration in being selected by Vineyard Wind. Sif scheduled the production of these monopiles for the first half of 2020.
The requirement of an additional Environmental Impact Study (EIS) by the Bureau of Ocean Energy Management (BOEM) is now delaying the project beyond the timeframe initially assumed by Vineyard Wind. This unexpected requirement again is a good example of the volatility of the offshore wind market. Sif and Vineyard Wind are investigating the impact and possible mitigation of the delays caused hereby. It however has become inevitable that delays will be suffered which will impact Sif's production planning for 2020. If and how this will have an impact is not yet clear as this depends on how Vineyard Wind decides to proceed. At this time, it is Vineyard Wind's priority to get clarity on the impact for the total Vineyard Wind project. Vineyard Wind has indicated that they need some time to assess, which could take approximately four to six weeks.
Sif has allowed for a delay of a few months in their planning and included decision moments on the planning in their contract with Vineyard Wind. Sif is studying the consequences of mitigation options beyond the contractually agreed delay decision moments. Once clarity on their expected new schedule is received from Vineyard Wind within the next four to six weeks, the impact on Sif's production planning and schedule can be assessed in more detail. Only at that time it will be clear if there is a financial impact beyond the provisions in the contract and what mitigating actions Sif is able to take.
Sif is a leading manufacturer of large steel tubulars, which are used as foundation components for the offshore wind and offshore oil & gas markets. The Company manufactures customized tubular components for offshore foundations, predominantly in the greater North Sea region. Sif combines a highly automated and flexible production facility with technology leadership in rolling and welding of heavy steel plates, which is based on over 70 years of experience and innovative in-house developed techniques and processes. Sif primarily produces monopiles, transition pieces and piles that are used to anchor jacket foundations in the seabed for offshore wind turbines. It furthermore produces legs, pile sleeves and piles of the larger jackets for oil & gas and tubular structures for various uses such as jetties. Sif is listed on Euronext Amsterdam. www.sif-group.com
Some of the statements contained in this release that are not historical facts are statements of future projections and other forward-looking statements based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements. Historical results are no guarantee for future performance. Forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of Sif's business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology such as "believes", "may", "will", "should", "would be", "expects" or "anticipates" or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans, or intentions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed, or expected. Sif does not intend, and does not assume any obligation, to update any industry information or forward- looking statements set forth in this release to reflect subsequent events or circumstances. The content of this trading update is for information purposes only and not intended as investment advise, or offer or solicitations for the purchase or sale in any financial instrument. Sif does not warrant or guarantee the completeness, accuracy, or fitness for any particular purposes in respect of the information included in this release.