Marine services company MMA Offshore’s net loss has widened to $144 million on the back of a previously flagged impairment and reduced activity in the oil and gas sector.
Marine services company MMA Offshore’s net loss has widened to $144 million on the back of a previously flagged impairment and reduced activity in the oil and gas sector.
Fremantle-based MMA’s loss follows last year’s $51.3 million net loss, with revenue down from $796.7 million to $481.1 million.
Earnings before interest, tax, depreciation and amortisation fell 65.4 per cent to $75.5 million.
MMA confirmed a $139 million impairment charge against the carrying value of its vessel, supply base and slipway businesses. Excluding the impairment, MMA made a net loss of $20.2 million.
No dividends were declared for FY16.
“MMA continued to face extremely challenging market conditions through FY16 as oil and gas markets remained under significant pressure,” chairman Tony Howarth said.
“Demand for MMA’s services continues to be impacted as oil and gas companies dramatically cut expenditure in the current environment.
“Rates have also come down further, driven by intense competition for available work and ongoing pressure from clients to reduce costs.
“Given MMA’s reduced earnings profile, we have recently negotiated some further amendments to the terms and financial covenants of our debt facilities and have committed to reducing the debt to a more sustainable level over the coming 12-18 months.”
Managing director Jeff Weber said vessel utilisation fell to 59 per cent, down from 75 per cent in FY15, while the company continued to face pressure on rates in all regions and vessel classes.
“MMA continues to focus on its vessel sales program to rationalise the fleet and reduce debt,” he said.
“Whilst the sale and purchase market is extremely difficult at present, we have been successful in selling 17 vessels to date for a total of $40 million.
“MMA continues to focus on cost reduction and productivity improvements without compromising the quality of our operations and the safety of our people.
“Whilst there has been some positive sentiment recently around the oil markets returning to balance in 2017, there is a lag between E&P spending commitments and increased activity in the offshore vessel market.
“On this basis, we expect the current challenging conditions to continue through FY17.”
MMA shares were 3.5 per cent lower to 35.7 cents each at 1pm.
