HARLAND & Wolff, the Belfast shipyard, has recorded sharply improved financial results, with pretax profits of £3 million, compared to a loss of £6.78 million in 1995. However the company says that it still needs to improve profit margins, which it hopes to achieve through establishing the company's position as a major player in the market for floating production and drilling technology.

Turnover rose last year to £118.1 million, from £82.1 million the previous year. Operating profit, before a £1.2 million loss arising from the sale of Trassey Shipping, was £2.1 million, compared to an operating loss of £9.9 million in 199.

While this result represents a major improvement on recent years, the level of profitability is still not satisfactory when compared to turnover," according to a company statement.

The company points to the major changes already achieved in its operations, which has seen its core business transformed from building standard ships to once-off highly engineered offshore products. " The results should be viewed against the background of this total transformation," according to the company.

Ship repair activity over the year was dominated by the initial contract to undertake the dry-docking and tank cleaning - and subsequently the further repair - of the all-tanker Sea Empress which ran aground off Milford Haven in early 1996.

The company noted that the market for floating production vessels is expected to continue to grow strongly. To meet this demand, the company has undertaken research and development projects in this area.

The benefits of this work have already started to emerge, it says, pointing to a contract won last month to upgrade a semi-submersible drilling rig. Significant opportunities exist for the company to develop into a centre of excellence for the provision of both floating production and drilling technology, according to the statement. Such a hub of excellence will benefit the local community, it adds, by increasing the skills base and providing more employment.