LONDON (Alliance News) - Gulf Marine Services PLC on Tuesday said two contracts with clients in the Middle East have been terminated due to those clients seeking cost efficiencies as a result of the "challenging low oil price environment".
The support vessel provider said one contract was with a national oil company for a large class self-propelled self-elevating support vessel which operated as a static accommodation unit. The vessel is expected to come off charter in the fourth quarter of 2016.
A contract for a small class vessel with another client has also been terminated, with this charter ending in the third quarter, while a two-year option period on another small class vessel has not been exercised by the same client.
Gulf Marine said the current secured backlog is USD257.8 million.
Gulf Marine added that it has implemented a number of cost-saving initiatives and agreed an amendment to its bank facility that permits the maximum net leverage ratio to be five times earnings before interest, tax, depreciation and amortisation up to July 1, 2018.
The group expects 2016 Ebitda to be between USD100-110 million, with earnings per share between 14.5 cents and 15.5 cents.
"While current trading conditions are difficult, and somewhat unpredictable at a regional level, our focus remains on maximising vessel utilisation and I am confident that our state-of-the-art fleet and leading operational expertise will prevail, giving us a real competitive edge over other market participants. Delivering cost efficiencies for our clients through our low cost, flexible and efficient vessels should open up more opportunities as markets stabilise and start to improve," Chief Executive Duncan Anderson said in a statement.
Shares in Gulf Marine were trading down 15% at 39.90 pence on Tuesday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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Gulf Marine Services (GMS)