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23 Jan 2019 | 13:56

Gulf Marine Services granted loan covenant tweak; warns of tough 2019

Support-vessel supplier Gulf Marine Services said its lenders had agreed to amend its financial covenant schedule, though it still did not expect a recovery in its trading performance in 2019.

The company said it now expected to be in full compliance with all of its covenants when they are tested against its audited 2018 financial results.

Gulf Marine Services had previously announced the award of three long-term contracts in the Middle East and North Africa region, each with a charter period of five years.

The first of the vessels had now commenced operations and the company was finalising the start dates for the remaining two.

Another client had exercised an option to extend the charter of a mid-size class vessel by six months, while a small-class vessel had started a four-month charter and large-class vessel had just won a five-month charter.

Gulf Marine Services said its backlog, including options, would increase to more than $260m, from $121m at the end of August, once all the new charters had commenced.

However, as previously announced, it said it did not expect a recovery in its trading performance in 2019, despite continuing improving levels of utilisation.

'The improving pipeline of opportunities for our fleet provides confidence that the market is starting to recover, albeit that it is more difficult to predict when this improved demand will be reflected in increased charter rates,' chief executive Duncan Anderson said.

'We welcome our banks' cooperation in managing our 2018 covenant obligations and continue to progress ways of addressing the group's long term capital structure.'

At 1:56pm: (LON:GMS) Gulf Marine Services PLC share price was +0.93p at 18.03p

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