LONDON (ShareCast) - (Sharecast News) - Oil industry support business Gulf Marine Services expects full-year trading to be "broadly in line" with its previous guidance despite some mobilisation delays but warned of its ability to repay its debts.
GMS expects to record a calendar day utilisation of its overall core fleet of advanced self-propelled self-elevating support vessels of approximately 70% in 2018, ahead of the 58% recorded in the previous year.

However, the London-listed firm warned that signing delays to recently awarded contracts meant that mobilisation of several contracts had been delayed into 2019, causing it to breach certain banking covenants as a result.

"A recovery in day rates in the industry continues to be deferred due to a number of factors including current oversupply of vessels across the industry against tender demand, exacerbated by extended contract award delays, and volatile oil prices," said GMS.

While GMS believes day rates will recover over time, the firm warned that several of the factors hindering it in 2018 would continue to impact its day rates into 2019.

"As a consequence, the company does not expect a recovery in its trading performance in 2019 despite continuing improving levels of utilisation. The timing of recovery in day rates beyond 2019 remains uncertain."

GMS said the delays would also have an impact on its rate of deleveraging and ability to repay its scheduled increased debt repayments from 2020 onwards.

"Whilst the group can continue to trade effectively in the near-term, the board is currently considering a number of ways of addressing the Group's long-term capital structure," added GMS.

As of 1100 GMT, GMS shares had tanked 71.49% to 9.25p.

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