TIDMGMS
RNS Number : 9360M
Gulf Marine Services PLC
02 August 2017
Gulf Marine Services PLC
('Gulf Marine Services', 'GMS', 'the Company' or 'the
Group')
TRADING UPDATE
Gulf Marine Services (LSE: GMS), the leading provider of
advanced self-propelled self-elevating support vessels (SESVs)
serving the offshore oil, gas and renewable energy sectors,
provides the following trading update for the period 16 May 2017 to
1 August 2017.
Overall the Group is continuing to see good levels of tender
activity and is progressing a number of opportunities, but is
encountering some delays in contract awards and commencement
dates.
Discussions with a client regarding two new contracts for SESVs
in the MENA region are well advanced and the Group is anticipating
that these will be finalised shortly. The contracts, which are
currently expected to commence at the end of Q1 2018, are for a
Large Class vessel with a charter period of eight months (including
options) and a Mid-Size Class vessel with a charter period of eight
months (including options).
A contract extension has been confirmed for one of the Group's
Mid-Size Class vessels currently operating in the MENA region, the
extension period is for five months (including options) to the end
of 2017. A contract extension to the end of Q1 2018 has also been
agreed for a Small Class vessel in the MENA region. As scheduled, a
Large Class vessel has commenced a previously announced 18-month
charter (including options) in Europe.
A Large Class vessel, operating in Europe, will complete a
two-year firm charter period at the end of Q3 2017. Two additional
12-month extension options are unlikely to be exercised by the
client. This vessel will be utilised on a previously announced
long-term contract for a renewable energy client in Europe
commencing in Q2 2018.
Financial Position
The Group's operational update on 16 May 2017 noted that the
actual timing of contract awards is dependent on its clients'
operational requirements. As certain potential contract awards and
commencement dates have been delayed, the Group is now expecting
2017 EBITDA to be US$ 58.0 million - 68.0 million, (equivalent to
an EBITDA margin above 50%), with this guidance subject to the
precise timing of contract awards. The Group continues to generate
positive operating cash flows, with net debt anticipated to be US$
360.0 million - 370.0 million at the end of 2017. Net income in
2017 is expected to be US$ 1.0 million - US$ 10.0 million.
The Group is in constructive dialogue with its banking syndicate
on appropriate covenant amendments following the deferment of
potential contract awards and the Board remains confident of the
banks' continued support. A further announcement will be made once
negotiations have been finalised.
Duncan Anderson, Chief Executive Officer of GMS, said:
"Demand for our Large Class and Mid-Size Class vessels is good,
with the strategic reshaping of our fleet through our new build
programme investment in these larger vessels proving prescient.
While we are seeing good levels of tender activity in Europe and
parts of the Middle East, these are taking longer to convert into
contracts than has been typically the norm. The precise timing of
contract awards is inevitably subject to our clients' own
operational requirements, and in the current environment can be
delayed as a consequence of a protracted tender evaluation and
award process.
"Discussions are progressing with a number of clients about our
cantilever innovation, reinforcing our view that the cantilever has
the potential to deliver significant cost efficiencies in a broader
range of work scopes for our SESVs.
"GMS has an exceptional fleet of advanced SESVs and our
flexibility makes us very attractive for clients seeking safe and
highly cost-effective offshore support solutions. We are confident
we have the right business model and strategy in place to ensure we
are in the best possible position to secure new contracts as the
market environment improves."
This announcement contains inside information.
John Brown
Company Secretary (responsible for arranging the release of this
announcement)
Gulf Marine Services PLC
2 August 2017
Enquiries
For further information please contact:
Gulf Marine Services
PLC Brunswick
Duncan Anderson Patrick Handley -
John Brown UK
Tel: +971 (2) 5028888 Will Medvei - UK
Anne Toomey Tel: +44 (0) 20 7404
Tel: +44 (0) 1296 5959
622736 Jade Mamarbachi -
UAE
Tel: +971 (0) 50 600
3829
Notes to Editors:
Gulf Marine Services PLC ('GMS', 'the Company' or 'the Group'),
a company listed on the London Stock Exchange, was founded in Abu
Dhabi in 1977 and has become the leading provider of advanced
self-propelled self-elevating support vessels (SESVs) in the world.
The fleet serves the oil, gas and renewable energy industries from
its offices in the United Arab Emirates, Saudi Arabia, Malaysia and
the United Kingdom. The Group's assets are capable of serving
clients' requirements across the globe, including the Middle East,
South East Asia, West Africa and Europe.
The GMS SESV fleet of 14 vessels is amongst the youngest in the
industry, with an average age of eight years. The vessels support
GMS' clients in a broad range of offshore oil and gas platform
refurbishment and maintenance activities, well intervention work
and offshore wind turbine maintenance work (which are opex-led
activities), as well as offshore oil and gas platform installation
and decommissioning and offshore wind turbine installation (which
are capex-led activities).
The SESVs are four-legged vessels and are self-propelled, which
means they do not require tugs or similar support vessels for moves
between locations in the field; this makes them significantly more
cost-effective and time-efficient than conventional offshore
support vessels without self-propulsion. They have a large deck
space, crane capacity and accommodation facilities that can be
adapted to the requirements of the Group's clients. A well workover
cantilever system that has been developed for the Large Class
vessels will be available to clients for the first time in 2017.
Developed in partnership with leading Norwegian designer Dwellop
A.S., the innovative cantilever allows GMS to significantly
increase the level and type of well intervention activities that
can be carried out from these vessels to include operations that
have traditionally been performed by more expensive non-propelled
drilling rigs.
The fleet is categorised by size into Large Class vessels
(operating in water depth of up to 80m, with crane capacity of up
to 400 tonnes and accommodation for up to 300 people), Mid-Size
Class vessels (operating in water depth up to 55m, with crane
capacity of up to 150 tonnes and accommodation for up to 300
people) and Small Class vessels (operating in water depth of up to
45m, with crane capacity of up to 45 tonnes and accommodation for
up to 300 people).
Demand for GMS' vessels is predominantly driven by their premium
and cost-effective capabilities, underpinned by the need to
maintain ageing oil and gas infrastructure and the increasing use
of enhanced oil recovery techniques to offset declining production
profiles.
Gulf Marine Services PLC's Legal Entity Identifier is
213800IGS2QE89SAJF77
www.gmsuae.com
Disclaimer
The content of the Gulf Marine Services PLC website should not
be considered to form a part of or be incorporated into this
announcement.
Cautionary Statement
This announcement includes statements that are forward-looking
in nature. All statements other than statements of historical fact
are capable of interpretation as forward-looking statements. These
statements may generally, but not always, be identified by the use
of words such as 'will', 'should', 'could', 'estimate', 'goals',
'outlook', 'probably', 'project', 'risks', 'schedule', 'seek',
'target', 'expects', 'is expected to', 'aims', 'may', 'objective',
'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we
see' or similar expressions. By their nature these forward-looking
statements involve numerous assumptions, risks and uncertainties,
both general and specific, as they relate to events and depend on
circumstances that might occur in the future.
Accordingly, the actual results, operations, performance or
achievements of the Company and its subsidiaries may be materially
different from any future results, operations, performance or
achievements expressed or implied by such forward-looking
statements, due to known and unknown risks, uncertainties and other
factors. Neither Gulf Marine Services PLC nor any of its
subsidiaries undertake any obligation to publicly update or revise
any forward-looking statement as a result of new information,
future events or other information. No part of this announcement
constitutes, or shall be taken to constitute, an invitation or
inducement to invest the Company or any other entity, and must not
be relied upon in any way in connection with any investment
decision. All written and oral forward-looking statements
attributable to the Company or to persons acting on the Company's
behalf are expressly qualified in their entirety by the cautionary
statements referred to above.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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