MMA flags tough 2019
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Shares in MMA Offshore have fallen today, after the marine logistics company forecast a challenging year ahead as part of its 2018 financial report, which also included a $36.3 million loss.
As part of its outlook, the company said there was positive sentiment within the oil and gas industry, but this was yet to flow through to vessel demand.
“We are already starting to see improved conditions in the broader oil and gas market and early signs of a recovery in oil and gas investment including increased FIDs, seismic and subsea orders,” MMA said.
“Unfortunately there is a lag between investment decisions by oil and gas companies and an increase in vessel demand so we expect market conditions to remain challenging in FY2019.
“The oversupply of offshore vessels in the market is still an issue, although the industry consensus is that a large proportion of the global fleet which is currently cold stacked will not return to service which will eliminate some of the supply overhang.
“We expect utilisation to increase across the course of FY2019 with only modest improvement in day rates this financial year.”
Shares in MMA were off 8.52 per cent at 25 cents each at 2.30pm AEDT.
Fremantle-based MMA announced a $36.3 million loss for the 2018 financial year, compared to a $66.8 million loss in 2017.
The company reported a drop in revenue for FY18 from $221.8 million to $200.4 million.
“Overall vessel utilisation averaged 56 per cent for the year, up slightly from 52 per cent in FY2017,” managing director Jeff Weber said.
“Excluding vessels held for sale, utilisation of our core fleet was higher at 69 per cent.
“Second half performance was stronger particularly for our Australian operations with construction activity on Woodside’s Greater Western Flank 2 and Greater Enfield 2 projects increasing demand for our vessels.
“The international markets remain challenging; however we are seeing an increase in tendering activities and enquires across our vessel types.
“Whilst the improvement in the broader oil and gas market has yet to flow through to the offshore vessels sector, we are seeing positive indicators that vessel demand will increase in the future.
“MMA has focused on maintaining the quality of its vessels and operations during the downturn and is well positioned to benefit from an improvement in market conditions.”