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Interim Results

GMS net profits tumble in tough environment

19 September 2017 07:32

Gulf Marine Services' net profits fell to $0.7m in the six months to thje end of June - down from $27.8m last time.

Revenue for the first half of 2017 was $58.5m - down from $110.4m - and adjusted net profit fell to $9.4m from $41.9m.

Adjusted earnings before interest, tax, depreciation and amortisation fell to $34.5m from $70.7m with an adjusted EBITDA margin of 59% (2016 H1: 64%) achieved.

Chief executive Duncan Anderson said: 'While the market environment continues to be tough, we are encouraged by the demand for the Group's fleet in Europe and parts of the Middle East, with the Large Class and Mid-Size Class vessels achieving utilisation above 70% in the first half of 2017.

'Having implemented our cost reduction programme, our focus is now on increasing vessel utilisation in 2018 and beyond, while recognising the timing of new contract awards is driven by our clients' own operational requirements.

'During the period, we were pleased to secure three significant long-term charters in the oil, gas and renewable energy sectors.

'We have also broadened our range of well intervention services, with our new cantilever capability attracting good levels of interest from potential clients. 'I am confident that we have the right business model and strategy in place to grow successfully.

'GMS is delivering a relatively resilient performance, at a time when the global SESV sector is experiencing significant market turbulence, and this is largely because we own and operate a young and highly flexible fleet.

'We believe demand will increasingly move away from older tonnage with clients preferring modern technologically-advanced vessels that can add more value to their operations through meaningful cost efficiencies.

'In this competitive environment, our state-of-the-art fleet is well placed to sustain and improve GMS' industry-leading position and will enable us to capitalise on further contract opportunities as the market recovers.

'We have taken a number of measures to manage and improve the Group's gearing position, including the decision not to pay an interim dividend.

'The Board recognises shareholder priorities and dividend payments will be resumed as soon as reasonable financial prudence allows.

'Now that our new build programme is complete, our strong operational cash flows will allow us to progressively reduce our gearing.'

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