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GMS shows strong H1 results in offshore downturn

GMS shows strong H1 results in offshore downturn
Gulf Marine Services (GMS) has posted profits of $35m and an 8% revenue increase during H1, despite the depressed state of the offshore market.

GMS’ utilisation climbed to 98% from 97% in 2014, buoying revenues to $98.2m versus $90.7m in H1 2014, in spite of the low oil price crippling other OSV operators. The group described MENA region demand as “particularly buoyant”.

While its $35m profit represented an 8% decline, GMS ceo Duncan Anderson  maintained that this was largely “as we continue to invest in expanding our scale of operations to serve our growing fleet”.

Further, GMS has predicted “a significant increase in earnings” in the next half year thanks to a 25% freeing-up of available days. The company reports that 95% of its available operational days in H2 have already been contracted, with a backlog worth $664m as of August 2015 comprising $341.9m firm and $322.1m extension options.

“We expect earnings to increase in the second half of 2015 now that two of our three newbuild vessels scheduled for this year have been delivered and because of the reduction in special projects and vessel modifications.

"We are keeping a watchful eye on the impact of the reduced oil price.  Although day rates are subdued in Europe, activity levels in the MENA region remain particularly buoyant and we are continuing to review the prospects for further development of the scale of our fleet beyond the current expansion programme.

"Given the Group's continued success in winning contracts for the new vessels, we expect to see growth in our revenue earning capacity feeding through to the bottom line and dividend prospects in 2016 and thereafter. As the period of capital investment associated with the current new build programme concludes in 2016 and the Group captures the earnings benefit from the enlarged fleet, the Board will consider the appropriate dividend policy that balances the opportunities to invest to continue to grow the business with the potential for increased shareholder returns."