A South Bank engineering firm has revealed the extent of the losses suffered after walking away from a major project on the Humber.
Engie Fabricom called a “force majeure” on the build-out of the now-stalled Tricoya plant at Saltend at the height of the Covid pandemic. It saw it take a £25.3 million hit “a significant loss being taken for foreseeable losses” on the first-of-its-type wonder construction materials operation.
The company, which has just rebranded to EFAB, having published its accounts for 2020, saw revenues fall 56 per cent from £46.6million to £20.5 million, with a loss of £24.7 million. It followed a £20 million loss in 2019, which followed a £6 million deficit in 2018. Staff numbers had increased from 320 to 413.
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There have been two huge cash injections to bail the business out by its parent company, the French global energy firm Eqans, itself formerly the Engie Group. It has also closed its Europarc head office in Grimsby, moving back to Immingham where it was based when acquired, where it has a huge modular manufacturing and construction facility by the port.
Eric De Ribaucourt, director and author of the results’ accompanying strategic report, told how the board had taken significant steps to reduce overhead impacts on the results of 2021 thereby protecting the profitability of the company in the latest financial year and beyond.
Mr De Ribaucourt said: “The company experienced challenging market conditions widely faced within the oil and gas sector in part due to the impact of Covid and the effect this had on the sector as a whole. As a result of this, the company saw a decline in the year in its turnover and its underlying profitability.
“An ongoing EPC (engineering, procurement and construction) project which had been significantly affected due to the impact of Covid was terminated during June 2021. As a result of the decision to terminate the contract a further loss of £25.4 million has had to be recognised to recognise any additional losses afforded to this contract completion. Following a review of the contract and the potential future uncertainty of Covid a board decision was taken that no further EPC contracts will be executed.
“The directors have taken additional steps to mitigate risks and focus on its core competencies within industries it has served for many years.”
As recently reported, Accsys, the lead company behind Tricoya, has now bought its joint venture partners out and put the completion on hold as costs escalated and raw material feedstock prices increased. A minimum six-month stop was implemented, having taken the project in-house following Engie Fabricom’s decision.
Under the EFAB name, the business has now been restructured into three new entities, each with a “distinct focus” having started life as South Humberside Fabrication Services in the Seventies. Employees are to be transferred across, with contracts with clients replaced.
Operations in Middlesbrough also remain as it sets itself out as a leading modular construction, engineering and project management specialist.
Simon Rafferty, chief executive, said: “As EFAB we will use our extensive history of providing a range of engineering and modular construction solutions combined with highly skilled teams’ passion to collaborate with customers to find efficient and effective solutions that help their business succeed and address the challenges linked to the energy, industrial and digital transition.”
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