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19 Dec 2018 | 07:51

Gulf Marine Services' touts dour outlook amid contract delays as volatile oil prices bite

Gulf Marine Services' full-year results were expected to be broadly in line with the guidance, but the company said performance was unlikely to improve next year amid ongoing underutilisation of the its vessels owing to a number of factors including oversupply of vessels across the industry.

'Whilst the board believes that day rates will recover over time, the Board is of the view that these factors will continue to impact day rates in 2019 and the anticipated recovery in day rates will be slow to materialise in the next twelve months,' the company said. A recovery in day rates in the industry continued to be deferred due to a number of factors including current oversupply of vessels across the industry against tender demand, exacerbated by extended contract award delays, and volatile oil prices, the company added.

The company said it expected to be in breach of certain banking covenants at the end of 2018, as the delay in signing recently awarded contracts would defer the mobilisation of these contracts into 2019.

The group's said it was currently considering a number of ways of addressing the its long-term capital structure to service its scheduled increased debt repayments from 2020 onwards as the timing of recovery in day rates beyond 2019 remained uncertain.

The company said it expected the calendar day utilisation of its overall core fleet to improve to approximately 70% in 2018 from 58%.

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