![COLUMN | Is DOF sacking seafarers, and is Cadeler missing its targets? [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2025-11-24%2F9bpmatty%2FUntitled.jpeg?w=480&auto=format%2Ccompress&fit=max)
We have two Scandinavian mysteries that go to the heart of the European offshore cluster and its challenges.
In one case, we see a major Norwegian subsea company seemingly following our Budget Bingo of callous cost-cutting amongst sea staff, but declining to comment to us on what exactly is happening, despite several queries. In another, we measure the wind turbine and foundation installation vessel market leader against the optimistic forecasts it made when it announced a major merger in 2023.
Just over two years ago, Danish wind company Cadeler announced that it was merging in an all-stock deal with Emanuele Laureo’s wind turbine installation vessel (WTIV) play Eneti to form the world’s largest company in the segment.
S. Lauro had turned his dour and boring Scorpio Bulkers into this renewable energy flip with impeccably bad timing. Scorpio Bulkers sold off all of its fleet of 49 bulkers from September 2020 to March 2021, taking a write-down of US$500 million in the process, as the ships sold for much less than their book value in a lacklustre dry market.
S. Lauro then renamed the company Eneti and invested in some second hand WTIVs via the acquisition of Seajacks, and ordered two newbuilds in Korea. Game on!
Unfortunately, within a year, bulk was back in vogue and bulk vessel values had soared, just after Scorpio had exited. Then, well before the delivery of the two newbuild WTIVs in 2024, Eneti announced that it would be merging with Cadeler. Both the Seajacks purchase and the Cadeler merger provided a big pay-out for Mr Lauro and his top team, with each transaction triggering a bonus, so it wasn’t all bad news in the boardroom.
Since the merger, Cadeler has focused on delivering its pipeline of newbuild WTIVs, including the two former Eneti vessels from Korea, and six more of its own, as well as buying a secondhand wind turbine maintenance vessel from China earlier this year. The company now operates seven WTIVs in service, being three legacy vessels and recent four newbuilds, having already taken delivery of three newbuilds in 2025.
There is one remaining 2025 newbuild (Wind Mover) on track for delivery from China before year end. Two more units are currently undergoing upgrades; Wind Ally is having mission equipment mobilised by Huisman in Xiamen in China, and will begin the transit to Europe later this year, whilst the secondhand purchase Wind Keeper is being upgraded at Fayard in Denmark ahead of a new maintenance contract next year.
Two more newbuild WTIVs will be delivered to the company in the second half of next year and in the first half of 2027, these being Wind Ace and Wind Apex.
With its fleet of 12 WTIVs, Cadeler is bigger than second placed DEME, which owns a fleet of eight units, and third placed Van Oord and Seaway 7, which operate four WTIVs apiece.
Last week, Cadeler published its third quarter results, which were impressive. Our headline read “Cadeler delivers strong Q3 performance with high utilisation, improved earnings and continued fleet expansion.”
With so many new vessels coming into service and going on charter, the company delivered positive headline numbers, with revenue for the three months to September 30 surging to an impressive €154 million (US$177 million), nearly double the levels of the same quarter in 2024, and quarterly profits after tax hit €64.6 million (US$74.4 million), up from €27.2 million in the prior year quarter in 2024 (US$31.9 million at current exchange rates).
This time, there were no one-off cancellation fees from clients paying Cadeler not to turn up. In the second quarter, the company received over US$100 million from Ørsted, which has cancelled the Hornsea Four project in the UK sector of the North Sea, not a positive sign as we highlighted, despite the large one-off gain.
Cadeler’s debt continued to grow to €1.455 billion (US$1.675 billion) on September 30, with just under US$1 billion of additional debt forecast to be incurred as the three remaining newbuilds are delivered. Our biggest concern for Cadeler is not today’s performance, or even next year’s, but what happens from 2027 and beyond when the number of new wind farms being developed looks softer than anticipated, especially in the USA.
Bear in mind that the company generated €286 million (US$329 million) in cash flow from operations in the first nine months of the year, including the €100 million (US$120 million) cancellation fee, but spent €931 million (US$1.07 billion) on investment in its newbuilds and upgrades to its existing fleet.
It remains a company that is highly indebted, and it will only get more indebted in 2026. If the wind market deteriorates, the book values of its assets may not be as solid as the current debt to equity ratio indicates.
“One of the key lessons of mergers is that company managements need to be held to account for their forecasts,” we wrote when we covered the merger of Cadeler and Eneti.
So, let’s do it. How is Cadeler doing against the promises it made investors in 2023 when the deal was announced?
You can track the performance in the financial presentation and results filing for the most recent quarter here and you can view the company’s forecasts of the synergies and cost savings from the merger in the investor presentation of June 16, 2023.
There are three key elements to consider. Firstly, utilisation: how much are the WTIVs being chartered?
Cadeler’s target was that it would achieve 85 per cent utilisation and day rates of up to €320,000 (US$370,000) per day charter hire for all ten vessels, which it expected to operate in 2026, a revenue figure it expected to boost with commercial synergies between the two companies.
For the third quarter of this year, the company’s utilisation hit 91.5 per cent. Looks like a big win there, then.
However, the summer season is peak utilisation for WTIVs in Northern Europe, just as it is for other offshore construction and subsea vessels, when the weather is at its best, so a more reliable indicator is utilisation for the first nine months of the year. Here, Cadeler’s January to September utilisation was 76 per cent, nine percentage points off the target. Whoops!
"I fear that this is optimistic," we wrote in 2023. "Cadeler itself has only achieved above 80 per cent utilisation in just one of the last five years for its existing two high-specification vessels."
On the revenue side, Cadeler resolutely refuses to publish transparent revenue per WTIV per day, unlike the offshore drilling companies. However, we can take the €154 million of revenue from seven units in service at 91.5 per cent utilisation over 92 days in the quarter, to give a daily revenue rate of €261,000 (US$300,000) per vessel per working day, about 20 per cent below the target.
Regarding costs, the company’s CFO boasted to analysts that, “cost of sales [is] under control, €38,000 (US$44,000) approximately for the quarter, a little bit up as compared to last year, but also two vessels in operations in the US with a little bit of higher operating expenses per day.”
I doubt those higher costs will be a problem going forward because the wind market there has been crippled by presidential edict and by 2027, there will be no new offshore wind developments there.
In 2023, Cadeler had forecast that its WTIVs would cost €35,000 (US$40,000) per day to operate in 2026. By the third quarter of 2025, they were already costing €38,398 (US$44,180) per day in operating expenses (crew, insurance and technical costs), up from €35,927 (US$41,337) in the year ago quarter.
Win for us, as we had already noted thirty months ago that, “looking at Cadeler's operating costs stated in its annual report, these are already above €35,000 per day in 2022. But somehow, Mr Gleerup expects that bigger, more complex vessels will cost less to operate than the company's existing WTIVs of similar but lower specification.
Wind is booming, but costs rise – rather than fall – in booming markets.”
So, the jury’s out on Cadeler. Its short-term results are impressive, but the huge capital outlay for its newbuild programme exposes it to volatility in windfarm construction – volatility that its more diversified competitors, DEME, Van Oord, Boskalis, Seaway 7, and Jan de Nul do not face as much.
The exit of Maersk from the WTIV business, with the untimely cancellation of its newbuild order at Seatrium in Singapore, is positive for Cadeler, but that newbuild WTIV is 99 per cent complete, and will be brought into service by someone at some point in future.
I still believe that in the first protected wind downturn, Cadeler will be bought by one of its big Low Countries competitors (I had predicted Maersk would buy it eventually, but this now seems unlikely).
So far, so good. Enjoy the ride whilst you can.
When we published our Budget Bingo piece two weeks back, we had not expected that companies were using it as a manual for cost cutting, rather than as light relief in tedious meetings.
We were then contacted by seafarers reporting that Norway’s DOF has launched a retrenchment campaign amongst former Maersk Supply Service (MSS) crew contracted out of Denmark. These layoffs are partially due to vessels leaving Northern Europe for nationally crewed markets elsewhere, and due to efforts to streamline bridge crewing levels on certain vessels, apparently.
Before we begin the story, we should give DOF the full chance to share its side of the story. We emailed the company with a detailed list of questions on Wednesday and were advised by return message that the media communications would respond to our enquiry. We followed up again on Friday advising that we would run the story today and again asking how the company intended to respond.
Here’s DOF’s response in full:
[sic]
[sic]
[sic]
So that is a nada, non, nul, nil, nicht response, complete silence, and a completely missed opportunity to share the company’s side of the story.
This leaves us vulnerable to claims that we are being misled by manipulative crewmembers or the victims of a coordinated scam. Based on the information we have received and the cross-checking we have done, we hope this is not the case, and the company certainly did not deny the claims we made to them.
Thanks, DOF.
Since acquiring MSS in 2024 in a US$1.12 billion deal, DOF has been selling off former MSS anchor handlers (including the two of the “T” class 180 tonners Skandi Tender and Skandi Trader to Seacontractors of the Netherlands in September for around US$14.5 million apiece) and the 2002-built Skandi Handler.
DOF says that this is part of a process of up-scaling the fleet, and the company has also allegedly attempted to sell a few other ships, including the subsea vessel Skandi Forza and cable laying vessel Skandi Connector, but have not yet found a willing buyer.
MSS had already been on a painful process of shrinkage even before the take-over. The year 2023 saw the company shed six vessels, including a number of laid-up anchor handlers in the North Sea. The company also laid off 130 staff, mainly in the UK and Australia, with CEO Christian Ingerslev telling staff, "Maersk Supply Service has been on a transformational journey since 2016.”
Interestingly, MSS’s former parent, A.P. Møller Holding, received US$577 million in cash for the business from DOF but also received new shares in DOF and two board seats. These 58.88 million newly issued DOF shares meant that A.P. Møller Holding ended up owning 25 per cent of the combined company, and has been the biggest single shareholder in DOF.
The news that several vessels have been sold or are being repositioned to local crew content markets in Australia and Brazil caused the former MSS crew pool, in the words of our source, “to get somewhat uneasy, but we were repeatedly and forcefully told that there was a sea of opportunity within the DOF fleet and there were more than enough positions for everyone. Too many to fill, in fact.”
We note that DOF has announced contract awards for Skandi Lifter for a four-year Petrobras charter and Skandi Inventor is due to leave Europe for Australia against a one year charter after a drydocking in Frederikshavn.
So, crew were anxious but not overly concerned.
“That was until October 16th, where we were told that, actually, surprise! A mass redundancy process would begin and be completed by month end.”
Our source alleges that around 230 crew have now been informed that they will be terminated. DOF has not commented on the numbers or the ranks or the nationalities involved, despite me asking these obvious questions.
I was wondering why no one-off lump sum charge for the crew restructuring was mentioned in the latest DOF results. The company announced US$107 million of net profit on the back of US$465 million of revenues in the third quarter.
Our source continued:
“It is, however, the subsequent unwillingness to actually let them go that has left a sour taste in the mouths of everyone affected. The statutory redundancy notice period under Danish law varies by length of service, between three and six months, with some having an additional three months based on age and service.
"I think it was everyone’s understanding that you would be placed on gardening leave and this time could be used to find a new position. Would you really fire someone and then want them continue sailing your ships around, moving rigs and representing the company?
"Apparently, if you are DOF then, yes, absolutely!”
So, by continuing to employ the seafarers it has fired, DOF need not incur a one-off redundancy charge, because their notice period is washed through the vessel operating expenses as they will continue to work, until they don’t work for the company anymore.
"If I was a reputable charterer, I would be extremely concerned about letting the red boats anywhere near my asset at least until the current process is completed," one source commented. "DOF remain resolute in their will to force these dismissed, somewhat dejected and possibly demoralised people of unknown mental state to continue sailing their vessels.”
We can’t comment on this, but we don’t deny the logic expressed there.
"On some vessels around 80 per cent of the crew have been informed that they will be made redundant," one source said. "DOF have made no attempt whatsoever to integrate the former MSS employees into the wider crew pool."
Perhaps DOF could address this point?
Another stated “unavoidable reason” for the redundancies is that DOF says that it is “aligning” the manning of four US$100 million former MSS I-class subsea vessels with DOF’s crewing standard standards on its equivalent subsea ships.
"Read that as replacing international crew with cheaper labour," one source observed. "In short, legacy DOF appear to have engineered the present situation to provide a context to dismiss legacy Maersk Supply crew, to enable their cheaper fleet crewing model.
This theory is further supported by their present claim to the crew being made redundant that, "there are no open positions (of any rank) within the DOF fleet."
Ouch.
"None of the above may seem particularly notable," our source continued. "We all remember the dark years and repeated collapses and redundancies following 2014. We are also aware that by and large, the maritime industry runs on day rate labour worldwide and that having a notice period at all is a luxury. We understand that sometimes a company has to make tough choices to balance the books."
This is all true, and might be seen as an unfortunate but regular event in the brutal and ethically challenged world of offshore crewing. At least offshore crews don’t have the horrors of six-month tours like their oppressed peers on containerships, bulkers, and tankers.
Unfortunately, former MSS crew are now learning the same lessons that seafarers employed by Solstad and Swire Pacific Offshore learnt when Tidewater took over the fifty Swire ships and 37 Solstad platform supply vessels in 2022 and 2023.
Loyalty is a one way street for large offshore companies. They will give you Starlink internet access and a sauna on board as readily as they will give you a redundancy notice, even if the company is highly profitable and even if the management team are paying themselves ever larger bonuses.
Unfortunately, it took someone singularly lacking in empathy and sensitivity to then prompt the flurry of correspondence to us.
Enter DOF CEO Mons Aase, smiling broadly and congratulating himself on his stellar leadership and the company’s robust financial position. I will leave our source to tell the story of what happened at the DOF Offshore Leaders conference with the theme of “Unlocking the Future”:
“DOF CEO Mons Aase took the stand at a senior officers’ seminar (helluva choice of timing for that party) in Copenhagen on the afternoon of October 29, fully aware that the majority of the audience is waiting to be fired the following day, and waxed lyrical about the absolutely brilliant financial position that DOF are in. It has been the best year ever, he says, bar none! And the future is brighter than ever. Billions in firm backlog and operating profit will be US$750 million for this financial year [our source is mistaken on this point, it is actually the operating cash flow that is forecast at US$750 million for 2025]. 'Myself, the board and our shareholders are very happy, very happy' [he told the seafarers].
"Such wholesome enthusiasm was little comfort the following morning, October 30, when the emails dropped in to the inboxes of those being made redundant.
"If you’re making such great money Mons, do the safe and decent thing: give those people what they’re due and let them go…”
No awards for timing, finesse. or panache, there. And Mr Aase does not even have the excuse that he is Dutch.
As per our source, the company has provided a helpful set of questions and answers on the process on a closed portal, and our source shared the following gem, which they say appeared there:
“Q: You mention you want to realign I-class vessel manning to match other DOF group SSVs. Can you clarify what that means? Which ranks are affected? Is the plan to replace junior ranks with Filipino crew?
"A: The legacy DOF CSVs operate with a bridge team of five, but they also have some dedicated admin resources on board whereas the I-class currently have standard bridge manning of seven. We intend to align this, but it will be a phased approach to ensure that all roles and responsibilities are clearly mapped. The intention is that the manning composition on all large CSVs will be the same (subject to contract and client requirements). Also note, that any manning composition changes on I-class will be handled in collaboration with senior crew on board following a management of change process.”
Bizarrely, it seems that there is also a voluntary redundancy process being conducted as part of the overall process, but the same terms will apply for voluntary redundancy as for any other redundancy, and will be based on the contract of employment, any relevant collective bargaining agreement and all applicable laws. No extra incentives will be offered by DOF to those who leave early, which kind of defeats the point.
We are sorry to hear that this is happening and look forward to hearing from Mr Aase that our source has misconstrued his ebullient pep talk at the Copenhagen crew conference, or that the situation is not as it has been presented to us.
The whole process leaves a bad taste in the mouth as it has been set out to us. Good luck to those involved, and good luck to anyone hoping crew might be treated better by a company generating US$750 million in cash flow this year.
Treating people with respect and dignity is important when breaking bad news, and based on what we have heard, DOF has flunked the test. Its senior leadership and HR team are not likely to win any awards for good personnel management anytime soon.
Over to you, Mr Aase, to prove us wrong.
Background reading
Cadeler’s full earnings report meeting is transcribed here.
Ian McIntosh’s excellent Frontrunner newsletter has an insightful piece on the transformation of DOF’s business model from vessel owner to contractor here.
