18/08/2015 - 14:39

MMA dips into the red with $51.3m loss

18/08/2015 - 14:39

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Marine services business MMA Offshore is predicting a tough year ahead after posting a net loss of $51.3 million for the 2015 financial year, on the back of a $125 million impairment flagged last month.

MMA dips into the red with $51.3m loss
MMA Offshore managing director Jeff Weber.

Marine services business MMA Offshore is predicting a tough year ahead after posting a net loss of $51.3 million for the 2015 financial year, on the back of a $125 million impairment flagged last month.

Excluding the impairment, MMA made a net profit of $55.3 million, up 2.7 per cent on the previous financial year, with revenue up 34 per cent to $796.7 million.

It also declared a final dividend of 1.5 cents per share fully franked, taking the full-year dividend to 5.5 cents.

“2015 was an extremely challenging year for the company as the collapse in world oil prices impacted vessel operators globally,” MMA chairman Tony Howarth said.

“Rates and utilisation fell significantly in all of MMA’s operating regions resulting in lower profitability and a disappointing overall result for shareholders.”

Managing director Jeff Weber said performance in the second half of the year was hit by the rapid downturn in the market, coupled by a reduction in construction activity.

“Vessel utilisation fell from 76 per cent in the first half to 65 per cent in the second half, and day rates fell up to 30 per cent as oil and gas companies cut capital and operating expenditure,” he said.

“The Supply Base also had a challenging year, with reduced construction and drilling activity impacting profitability. Pleasingly, a major long-term contract was recently signed, securing a stable baseload of earnings for that business going forward.”

Mr Weber said the MMA saved about $15 million during the year from a restructuring program implemented to reduce overheads and optimise the company’s structure.

“The drive to increase efficiencies will continue into FY16,” he said.

Looking forward, the company said competition in Australia from international operators was increasing, and did not expect to see an improvement in rates or utilisation in the region for FY16 as a result.

It plans to undertake a range of actions to optimise its asset base and reduce costs.

“Internationally, market conditions remain extremely weak with low utilisation and rates across all of our operating regions,” the company said.

“Competition is also fierce for any available opportunities. Until we see a sustained increase in the oil price we do not foresee any improvement in the international vessel market.

“Overall visibility in the vessel market is very challenging with rates and utilisation expected to remain under pressure through the next 12 months.” 

MMA shares closed 11 per cent lower to 52.5 cents.

 

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