RE: GFD13 Apr 2019 20:40
Indeed so, I dont think the days of the investor are over, far from it.
GMS made a 5 million loss, its looking at 6 million in savings and efficiencies.
The day rates are down because of the industry peers being underutilised, the small vessel segment has some slack to take up within GMS. The future should be bright.
The loss being so small I think we are right to be harder than we would like to be to get that figure into profit.
The loans are at 7% iirc
Work being spread out means increased transport costs. GMS pays this and then has to collect it from it service users. That was 3.5 million in interest alone. Then there was the fact there were late payers! That was another 5 mllion iirc.
The exchange rates took another 2 or 3 million off the European contracts.
The total loan interest costs are 28 million.
I think its important to realise 0% interest can save 32 million per year.
Increased day rates would probably add between 60 to 100 million on past figures.
Savings and efficiencies are important, one of the harsh comments made to me by someone who worked offshore was the food costs being the first normally to be cut. Sounds dreadful, but resupply schedules' for fresh food are the first sensible saving. Lets hope there is someone there with a bread maker, but its tinned food usually. It doesn't effect safety, Ship maintenance is too important to be cut as well, along with looking for work.
My point is with a 5 million loss you sometimes do have to be hard across the whole firm (be it management pay or working operations) to get that back to a profit. That's not because I want dividends, Its because sometimes if there is a loss that's less than 5% of turnover emergency cost cutting measures for a couple of years to get into profit are better in my opinion than selling a vessel. Lost revenue will never return if there isn't a vessel there!
I try to see GMS 3 years from now with improving day rates...perhaps foolish and long term.
Anyway, only an opinion, for a while there is likely to be no news expected, I will watch and wait.
Sign In
Follow the stocks
