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LONDON (Alliance News) - Gulf Marine Services PLC on Tuesday said its pretax profit and revenue both increased in 2014 and said it will pay a maiden final dividend as it expressed confidence in its ability to successfully navigate the challenges posed by the falling oil price.
The company, which provides self-elevating support vessels to the offshore oil, gas and renewable energy sectors, said its pretax profit for the year rose to USD80.4 million from USD73.3 million last year.
Profit was driven by revenue growth outpacing an increase in cost of sales, with revenue increasing to USD196.6 million from USD184.3 million but its cost of sales increasing to USD70.1 million from USD65.5 million.
The company said its fleet utilisation for the year was at 97%, boosted by six new contracts and three contract extensions. It added its new-build programme, under which it will expand its SESV fleet to 15 vessels from nine currently, is on track, with two vessels delivered as planned and on charter, and the remaining four currently in construction.
Gulf Marine said the rapid decline in the oil price in the second half of 2014 is having a major impact on the oil and gas sector, but said it cannot say with any certainty what the impact will be on the company.
It said its order backlog sits at USD700 million, with all of this activity categorised by its customers as operating expenditure rather than capital expenditure, meaning none of its contracts are vulnerable to the swingeing cuts that oil and gas companies have been making to their 2015 capital spending plans.
In addition, Gulf Marine said more than 70% of its backlog will be derived from work primarily with national oil companies in low-cost production areas in the Middle East. It said the low oil price may result in the acceleration of abandonment and decommissioning work by its clients, which would provide it with further opportunities.
Gulf Marine said it will continue to monitor the emerging impact of the low oil price and said it will adjust its strategy accordingly should that be necessary.
The company also said it will pay a maiden final dividend of 1.06 pence per share. In addition to the interim dividend it paid earlier in 2014, its total dividend for the year will be 1.47 pence per share.
"GMS delivered a strong performance in 2014. The group carried out the business strategy we set out at IPO, maintaining high utilisation levels of 97% for the SESV fleet and achieving charter rates in line with expectations," said Chief Executive Duncan Anderson.
Shares in Gulf Marine were up 1.9% to 132.50 pence on Tuesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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