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MMA Offshore improves H1 results, warns of tough market outlook

MMA Offshore improves H1 results, warns of tough market outlook
MMA Offshore, a merger of the businesess of Mermaid Marine Australia and Jaya Holdings, has posted a strong increase in earnings in the first half ended 31 December 2014 but is anticipating a more challenging second half.

Net profit for the six-month period was recorded at $37.7m, an increase of 55.8% from $24.2m in the previous corresponding period.

Revenue also jumped 80% year-on-year to $456.3m backed by strong contributions from a number of key Australian vessel projects.

MMA Offshore said its first half results include the full impact of the Jaya business and are in line with expectations.

Following Mermaid Marine Australia’s purchase of 100% of the subsidiaries of Jaya Holdings in June 2014, the company has united the two businesses under a single global brand named MMA Offshore.

At present, the rebranded MMA Offshore has a fleet of over 60 modern OSVs and four onshore facilities in Southeast Asia and Australia.

Looking ahead, MMA Offshore expects activity in the second half to be weaker than the first half as a result of reduced Australian project activity as Gorgon construction completes, combined with the impact of lower oil prices. The company also expects further downward pressure on rates as clients continue to focus on cost reductions.

“The recent plunge in the oil price has had a dramatic impact on the sector globally with oil and gas majors reacting by curbing capital expenditure and seeking to reduce their operating costs,” said Tony Howarth, chairman of MMA Offshore.

“The Australian construction market is less impacted in that most of the current offshore support work relates to the construction of large LNG projects which have already been sanctioned and are well into the construction phase,” Howarth commented.

“The international market is expected to be challenging in the current environment with pressure on rates and utilisation across all vessel segments,” he added.

Meanwhile, MMA Offshore said its newbuild programme is on track with five new vessels currently under construction, including two ROV support vessels to be delivered in 2016 and two PSVs in 2017.

TAGS: Offshore