Cargotec Proceeds with MacGregor Sale as Offshore Wind Dispute Gets Resolved
MacGregor has settled the dispute with a monopile installation vessel customer as its parent company Cargotec goes forward with the sale of the business.
As announced on April 30, 2024 in Cargotec’s interim report January–March 2024, MacGregor has had a dispute related to one and only monopile installation vessel project.
MacGregor and the customer have now settled this dispute, which will have an approximately $27 million (€25 million) negative impact on MacGregor’s second quarter 2024 operating profit.
The costs will be reported as items affecting comparability as the costs are related to a one of its kind pilot project and the product is no longer in MacGregor’s sales portfolio.
According to Cargotec, MacGregor’s core businesses, merchant and services, are performing well, while its offshore business’ performance, however, has been overall unsatisfactory.
While the traditional offshore solutions business has performed well and it has been profitable, projects related to two new offshore wind solutions have caused losses due to their pilot nature and technical challenges, Cargotec said.
MacGregor has therefore now decided to stop offering the monopile installation solution and it is no longer in MacGregor’s sales portfolio. Another offshore wind solution, containing advanced technologies for the servicing of offshore wind turbines, is still a part of MacGregor offering.
There are approximately ten of these smaller loss-making offshore pilot projects to be finalised mainly in 2024. MacGregor will not commit to any new pilot projects until all technical challenges are solved.
These actions are the final stage of the restructuring program to turn around the offshore business.
Offshore wind projects represent less than half of MacGregor’s offshore equipment related order book, which amounted to $94.3 million (€87 million) at the end of the first quarter 2024.
Cargotec’s Board of Directors decided on November 14, 2022, that MacGregor will not be part of Cargotec’s portfolio in the future. However, from a value creation perspective, the timing for divesting the business was not ideal.
Since that, MacGregor’s performance and market conditions have improved, according to the company, and with the above-described dispute now being settled, Cargotec has decided to proceed with the sale process of MacGregor.
“It is an important milestone for us to reach a settlement with the customer related to the monopile installation vessel project. Our solution is technically advanced but we were unable to reach agreement between the companies on the way forward in the lengthy project. Having the dispute resolved means that we are in an even stronger position than before to further build on our profitability journey,” said Leif Byström, President, MacGregor.
