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(Alliance News) - Gulf Marine Services PLC on Friday said pretax loss for 2019 widened as it noted a tight short-term liquidity position amid the Covid-19 pandemic.
Shares in the oil and gas service company were trading 3.6% lower at 6.09 pence each on Friday morning in London.
For 2019, Gulf Marine posted pretax loss of USD85.5 million, widened from USD5.1 million. Revenue was down 12% to USD108.7 million from USD123.3 million.
The company said the decline in revenue was due to lower rates as well as shifts in the utilisation mix. The widened loss was a result of impairment charges totalling USD59.1 million, on two of its E-Class vessels, two smaller charges on the Naashi and a S-Class cantilever, and USD6.3 million of restructuring costs.
Adjusted earnings before interest, taxes, depreciation, and amortization was USD51.4 million, which while ahead of August guidance of between USD45 million to USD48 million was 11% than USD58.0 million recorded for 2018.
In April, Tim Summers was hired as chair and in August, added the role of chief executive to his duties. Steve Kersley was hired as chief financial officer in June.
"2019 was a difficult year for GMS, and we took decisive action on all fronts. Governance processes were reformed, the board reshaped, and a new senior management team put in place. We made material reductions in our cost base, while at the same time delivering significant new contract wins. We ended 2019 with EBITDA levels slightly ahead of our guidance," said Summers.
Looking ahead, Gulf Marine said that while it has implemented cost-saving measures, in the event full loan documentation is not agreed with lenders by the end of June, it may default on its loans. However, it assured that it would continue to manage its tight liquidity position, adding that it believes that final loan documentation will be completed in a timely fashion and that funds can be managed until the refinancing of its banking facilities complete.
"After a year's negotiations, in principle agreement has been reached with lenders on the key terms of restructuring our bank debt which will give GMS renewed access to liquidity and a firm financial platform to move the business forward through 2020 and beyond. Market conditions remain challenging, but we are aware of the risks and are actively managing them," Summers added.
By Ife Taiwo; ifetaiwo@alliancenews.com
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