MMA buoyant as losses cut

Marine logistics business MMA Offshore has cut its net loss in the half year to December as conditions in the oil and gas market stabilised.

MMA’s net loss from continuing operations was $22.7 million, down from $46.2 million in the half year to December 2016.

Those figures are normalised to remove the impact of a $254 million impairment in the previous corresponding period.

Revenue fell 23 per cent to be $92.5 million, as the company improved its earnings before interest, taxes, depreciation and amortisation margin to be $7.6 million, up $3.2 million.

It was an eventful half for MMA.

The company completed an equity raising of $97 million, but hit trouble when major shareholder Halom Investments attemped to make changes to the company’s board through a general meeting.

Halom also fielded a complaint to the takeovers panel.

There have been positives, however.

MMA chief executive Jeff Weber told Business News the company had won work on the Greater Enfield and Greater Western Flank Two energy projects, both led by Woodside Petroleum.

The oil price had improved, demand was stronger and producers were back in the black, he said, although the industry was still at the front end of a recovery.

Global utilisation would need to pick up before vessel rates improved.

Mr Weber was confident that would happen, however, as he said the industry would eventually need to reach a point where return on capital would meet costs.

In a release to the market today, he said longer-term contracts in Australia would help boost vessel utilisation, while non-core vessels had mostly been sold.

More than $90 million was raised through vessel sales in recent years.

“The strategy has focused on vessels of limited future strategic value to the company and has enabled us to reduce holding costs, interest and overhead costs and reduce our debt,” Mr Weber said.

“MMA is now highly focused with a core fleet of 28 high-quality, specialised vessels where MMA can leverage its marine expertise to extract the most value from its assets.

“Whilst we have yet to see an improvement in utilisation or rates across the industry, the early signs of a recovery are encouraging.”

Full-year operating Ebitda was forecast to be $18 million to $20 million.

Shares were 4 per cent lower to be 24 cents each.