Revenue rises, net profit falls for Gulf Marine Services
By Josh White
Date: Wednesday 04 Sep 2024
(Sharecast News) - Gulf Marine Services has reported a 9% increase in revenue for the first half on Wednesday, reaching $80.7m, driven by higher demand for its S-Class vessels and improved fleet day rates.
The London-listed firm said net profit, however, fell 15% to $7.4m due to increased tax and administrative expenses, as well as the impact of fair value adjustments related to warrants.
Adjusted EBITDA rose 8% to $37.3m, maintaining a strong margin of 59%.
GMS also made significant progress in reducing its debt, with the net leverage ratio improving to 2.62-to-one from 3.05-to-one at the end of 2023.
Finance expenses decreased substantially as a result of debt reduction efforts and favourable interest rate adjustments.
The company's secured contract backlog grew to $426.8m by June, reflecting strong demand and a significant increase in charter periods awarded during the first half.
GMS also announced new contracts with a combined charter period of 14.3 years, compared to just 2.4 years in the same period last year.
Despite the profit decline, GMS remained optimistic about the future, with adjusted EBITDA guidance for 2024 expected to remain in the range of $92m to $100m.
The company said it expected market growth and the retirement of ageing vessels from 2025 to 2027 to absorb new supply, ensuring continued demand for its services.
"We remain committed to our strategy of deleveraging, prioritising the shift of value from lenders to shareholders, and are on course to meet our 2024 adjusted EBITDA guidance," said executive chairman Mansour Al Alami.
"This progress has been bolstered by higher day rates and disciplined performance in the first half of the year.
"Despite ongoing challenges such as operational disruptions, inflation, and elevated borrowing costs, we are actively managing these risks and are confident in our ability to further navigate the company towards continued success."
At 1049 BST, shares in Gulf Marine Services were down 4.25% at 15.99p.
Reporting by Josh White for Sharecast.com.
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