Gulf Marine Services Hires New Chair As Loss Narrows But Outlook Weak
Gulf Marine Services PLC said its 2018 financial performance was “disappointing” although its loss narrowed sharply on reduced expenses and an impairment charge the year before.
Shares in Gulf Marine, which provides support vehicles for the offshore oil, gas and renewable energy sectors, were down 0.4% at 14.94 pence in London on Tuesday.
Gulf Marine also announced the appointment of a new non-executive chair, tapping the current chair of private oil and gas company New Age Ltd, Timothy Summers.
The hire of a new chair follows a turbulent time for the Gulf Marine board, during which shareholders put forward resolutions to appoint new members and to oust previous chair Simon Heale, who resigned before the vote could take place. The resolutions did not pass.
Turning to its results, Gulf Marine’s USD2.7 million loss for 2018 was only a fraction of its USD18.3 million loss in 2017, with its 2017 performance suffering a USD7.3 million impairment charge that did not repeat.
Other factors in Gulf Marine’s improved 2018 performance include a 20% drop in finance expenses to USD31.3 million from USD39.0 million and a 9.2% increase in 2018 revenue to USD123.3 million from USD112.9 million.
Gulf Marine said its dividend payments remain suspended while it works to address its capital structure. At present, the company it attempting to refinance its loans.
The company warned in December that its would be in breach of “certain banking covenants at the end of 2018” with its trading performance unlikely to recover in 2019.
At that time, Gulf Marine said an expected weak 2019 financial performance is to hurt the firm’s deleveraging rate and ability to service its increased debt payments from 2020 onward.
Gulf Marine Chief Executive Duncan Anderson said: “Our financial performance in 2018 was clearly very disappointing, and our expectation is that 2019 will show only limited improvement, if at all. We are working closely with the banking syndicate and are highly focused on addressing 2019 covenant compliance challenges as well as finding solutions for a sustainable longer term capital structure that will allow GMS to retain and enhance its exposure to charter rate upside in a recovering market. We firmly believe that the dramatic benefit of future improvements in charter day rates will enable us to achieve the fleet’s earnings potential.”
Source: Alliance News Limited