Harland & Wolff sails back into dire straits

Harland & Wolff has given its strongest warning to date that the historic Belfast shipyard, which built the RMS Titanic, could be doomed unless new orders are secured by the first quarter of next year.

In its latest financial report Harland & Wolff warns that the uncertainty over orders may mean that the shipyard could no longer be run as a "going concern".

The yard's parent company, Norwegian shipping firm, Fred Olsen Energy, has indicated that it will maintain its current level of financial support to Harland's.

However without future orders, the shipyard's management has warned that its "operational existence" is under threat.

The latest results show Harland's recorded a pre-tax loss of £3.6 million sterling (€5.8 million) for the first six months of this year, compared to a loss of £9.6 million for the corresponding period last year.

Harland's turnover slumped to £12.6 million in the first half of 2001 compared to £92 million during the first six months of 2000.

Founded in 1861, Harland & Wolff has dominated the city of Belfast, both physically and economically, for more than a century.

The shipyard was famed for White Star Line's Titanic and Olympic liners in the early 1900s and in its heyday it employed around 35,000 people. Today fewer than 600 people work in the shipyard in Queen's Island in east Belfast.

Although the yard's two large industrial cranes, known locally as Samson and Goliath, still dominate the Belfast skyline, Harland & Wolff's contribution to the Northern Ireland economy has dwindled.

In its latest report the yard warns that further jobs cuts will be necessary unless it secures orders by the end of the first quarter of next year. The shipyard's order book consists of an £80 million Ministry of Defence contract for two ro-ro ferries. Once this order is completed in March the shipyard will fall silent.

Sir David Fell, Harland's chairman, says potential orders are in the pipeline but cannot be guaranteed at this stage. "One of these opportunities, for a new- building order, has reached the conditional contract stage, but there remain significant elements regarding financing that require resolution. There is therefore no certainty that a firm order will result," Sir David said.

"Failure to secure a major contract in the near future will necessitate a review of the group operations, together with its employment levels," he warned. He said a radical review would be undertaken to assess the yard's future potential.

An option the yard may consider is a new rights issue to finance future development.