Marine services provider MMA Offshore said it was progressing towards its previously announced $15 million cost savings target, while the company suffers reduced demand and lower fleet utilisation.
Marine services provider MMA Offshore has confirmed a significant decline in anticipated profit for the half year to June 2015 and signalled a weak result for the full year, despite a major expansion through last year's $550 million acquisition of Singapore-based Jaya Holdings.
The company, which is led by chief executive Jeff Weber, said it expected trading conditions to remain soft into the coming financial year, with activity slowing as oil companies reduced spending and major projects neared completion.
MMA said it was progressing towards its previously announced $15 million cost savings target, while suffering from reduced demand and lower fleet utilisation.
Fleet utilisation was substantially down, with a 62 per cent rate domestically compared with 82 per cent in the first half of the year.
The international fleet was at around 60 per cent utilisation, down from 72 per cent.
Efforts to sell vessels were also proving difficult, MMA said, with only two successful barge sales as part of a fleet optimisation program.
Usage of MMA’s Dampier supply base fell around 30 per cent compared with the first half of the financial year, with reduced activity to continue due to drilling delays this quarter.
But it was not entirely bad news for the company, which has a strong bank balance of around $140 million.
Positive news has come from the Dampier Slipway and Broome Supply Base, both of which performed in line with expectations.
In order to achieve its $15 million cost cutting target, the company will make about 65 positions redundant in Australia, with some of these redundancies already completed.
Singapore operations will also be slimmed, with 23 jobs to go
MMA fell 6 per cent to 68.5 cents per share at the time of writing.