Trading Update

RNS Number : 2945R

Gulf Marine Services PLC

29 June 2020

 

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29 June 2020

Gulf Marine Services PLC

("GMS" or the "Company")

Trading Update

Year-to-date performance remains ahead of the Business Plan, with May actuals now recorded.  The order book has multi-year visibility.  Total GMS fleet utilisation now stands at 82% for FY 2020, and 85% for 2H2020. With a further 53% of the fleet contracted for 2021 and 37% contracted for 2022, the business is well positioned to maintain current utilization levels through 2021. Markets in the Middle East are active, with NOC and EPC customers continuing to tender for vessels, albeit with schedules often changing. Renewable energy activity also continues, with steady work for the vessel located in North West Europe.

No further COVID-19 cases have been reported either onshore or offshore. 

GMS Evolution, a unique E-Class vessel fitted with GMS cantilever technology, is mobilizing for operations with a Middle East NOC client. The cantilever system will be in use for the first time, enabling safer and more efficient well operations.

Progress on cost reduction has raised the target for annualized costs savings to $16.5m (previously $13m), reflecting further reduction in headcount, improved supply chain efficiencies and a smaller facilities footprint.  This figure does not include savings to be realized from the recently signed Agreement with Zakher Marine International, where work has started, and the first contract tender is already underway.

As part of the ongoing cost reduction drive, GMS will relocate from the Musaffah base in 4Q2020, home since 1982, splitting the yard facility and offices.  This move will reduce the combined office & yard costs by 40% annually from 4Q2020 onwards.  The office will remain in Abu Dhabi.

The agreement with lenders, announced on June 10^th, stabilises the balance sheet, and positions the company for the intended equity capital raise as it works to reduce net debt levels to its medium-term target of around 3.0x EBITDA. The necessary preparatory work has commenced with the intention of approaching the market later in the year.

The Board reconfirms the previous 2020 guidance of $57-62 million EBITDA.

Enquiries:

GMS Tim Summers, Executive Chairman Stephen Kersley, Chief Financial Officer Tony Hunter, Company Secretary		[phone]
Brunswick (PR Adviser to GMS) Patrick Handley - UK Will Medvei - UK Jade Mamarbachi - UAE		[phone]  [phone]

ABOUT GMS

GMS, a company listed on the London Stock Exchange, was founded in Abu Dhabi in 1977 and has become a world-leading provider of advanced self-propelled self-elevating support vessels (SESVs).  The fleet serves the oil, gas and renewable energy industries from its offices in the United Arab Emirates, Saudi Arabia and the United Kingdom.  The Group's assets are capable of serving clients' requirements across the globe, including those in the Middle East, South East Asia, West Africa, North America, the Gulf of Mexico and Europe.

The GMS fleet of 13 SESVs is amongst the youngest in the industry, with an average age of eight years. The vessels support GMS's 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 categorised by size - K-Class (Small), S-Class (Mid) and E-Class (Large) - with these capable of operating in water depths of 45m to 80m depending on leg length.  The vessels are four-legged 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 (for up to 300 people) that can be adapted to the requirements of the Group's clients.

The Company's Legal Entity Identifier is 213800IGS2QE89SAJF77.

 

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