Det Norske Veritas (DNV) cancelled 77 ship certificates last year because the ships no longer met its quality requirements. “There is currently an extra focus on quality in order to improve safety at sea,” says director Tor Svensen, the newly appointed head of DNV’s maritime operations.
Last year, DNV’s revenues amounted to NOK 5,741 million, compared to NOK 5,813 million the year before. The NOK 72 million reduction is due to the strong Norwegian krone and the correspondingly weak US dollar. The exchange-rate effect reduced the revenues by around NOK 360 million.
DNV’s operating profit came to NOK 335 million in 2002, compared to NOK 590 million the previous year. The profit after tax amounted to NOK 137 million, as against NOK 314 million in 2001.
“Exchange-rate effects, increased provisions for pensions and the slowdown in the global economy are key factors that have affected DNV’s results. We are relatively satisfied with the operating profit, taking into account the major negative effects of the exchange-rate factors. With an equity of NOK 2,654 million, representing an equity ratio of 59.4 per cent, we are well equipped to carry on the foundation’s work of improving quality and safety,” says CEO Miklos Konkoly-Thege.
Bigger share of the world fleet
At the end of 2002, DNV classed 16 per cent of the world fleet – a larger share than ever before. Of the total number of ships on order worldwide, 20.6 per cent are to be built to DNV class. “It’s gratifying that this growth has come during a period when DNV has been particularly active in the work of improving safety at sea. Quality is becoming an increasingly important competition factor in international shipping,” says Tor Svensen.
Svensen continues, “For the past two and a half years, we’ve had a special programme for following up ships with poor quality standards. A close dialogue with the shipping companies has shown that around half of these ships have been improved, while the remainder have been removed from our class because the owner has not complied with our upgrading requirements. Our goal is to remove as few ships as possible from DNV class. We would rather that shipping companies invest in quality measures to improve the ships.
“Global port-state-detention statistics show that DNV-classed ships have the lowest rate of detentions. This proves that our customers focus on quality and that our follow-up activities work.”
Growth in environmental certification
The certification of quality and environmental management systems accounts for around a quarter of DNV’s total revenues. Quality-system certification in accordance with ISO 9001 is still growing in Asia and parts of Europe, while growth is abating in the USA and parts of Europe. On a worldwide basis, DNV has a market share of approximately 7 per cent.
”The demand for environmental certification (ISO 14000) is still rising strongly. Last year DNV saw growth of 26 per cent in this area.. We’re very pleased to have developed the world’s largest environmental certification body, which has a 10 per cent share of the international market,” says Miklos Konkoly-Thege.
“An important growth area for DNV in the future will be the development of methods to verify and certify greenhouse-gas emissions to the atmosphere. We’ve carried out several projects for the UN and World Bank, among others, as well as for a number of national authorities and multinational companies. Independent verification of the emission quotas creates the trust necessary for the trade in quotas to be a success. This area has a huge potential for DNV,” says Konkoly-Thege.
Increased commitment to advisory services
Risk assessments and advisory services in connection with handling uncertainties are another important area for DNV. This area includes, for example, developing methods for providing decision-making support to companies that are to evaluate major development projects containing uncertainties.
The transport of oil and gas is an important technological area of commitment for DNV. More and more of the production will take place from fields in deep waters. “We are now focusing strongly on helping oil companies to resolve technological and safety challenges linked to production in deep waters,” says Konkoly-Thege.
“Our focus on pipelines is just as exciting. DNV is involved in most of the major international pipeline projects. The Pipeline Rules developed by DNV are now established as an international standard. These contribute to safer pipeline networks and allow for a greater degree of reliability throughout the pipeline’s lifetime.”
”In the oil and gas sector, DNV has extensive operations in the North Sea, Gulf of Mexico, Brazil, Middle East and Caspian Sea. West Africa is another important area of focus, and we will soon open a new office in Angola to serve this fast emerging market,” says Miklos Konkoly-Thege.
Financial results | 2002 | 2001 | 2000 |
Revenues | 5 741 | 5 813 | 5 351 |
Operating profits | 335 | 590 | 181 |
Financial investments | -76 | -125 | -63 |
Tax | -121 | -151 | -64 |
Net profit after tax | 137 | 314 | 54 |
All numbers in NOK million.
Facts about Det Norske Veritas at the end of 2002 (2001 numbers in parenthesis):
DNV-classed fleet:
5,023 vessels (4,875)
93.1 million grt. (89.7)
16.0 % of world’s merchant fleet. (15.7)
DNV-classed rigs:
146 offshore installations (145), including mobile rigs, jack-ups, floating production vessels and drilling units. About 30% of the world’s total tonnage.
Certification:
ISO 9001: No. 35 970 (32 350)
ISO 14001: No. 4 009 ( 3 040)
Employees:
5,606 employees (5,436)
Date: 2003-02-24
