23/02/2015 - 15:02

MMA predicts tougher market

23/02/2015 - 15:02

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Fremantle-based MMA Offshore has announced a lift in interim revenue and profit, but its shares slumped today on a lower dividend and predictions of a weaker second half.

MMA predicts tougher market
MMA Offshore managing director Jeff Weber.

Fremantle-based MMA Offshore has announced a lift in interim revenue and profit, but its shares slumped today on a lower dividend and predictions of a weaker second half.

MMA announced a 55.8 per cent jump in its half-year profits after tax to $37.7 million despite the “challenging” current market.

The company said in a statement today the results were in line with expectations, bolstered by a number of key Australian vessel projects.

Its earnings before interest, tax, depreciation and amortisation were up 136.6 per cent on the prior corresponding period, to $132 million.

MMA chairman Tony Howarth said while the recent drop in oil price has had an adverse impact on the sector globally, the Australian construction market was less affected, with most offshore construction work for large LNG projects having already been sanctioned and well into construction phase.

MMA managing director Jeff Weber said the company’s new build program was on track, with five new vessels under construction.

“Two ROV support vessels will be delivered in FY16 and are currently being bid into longer term inspection, maintenance and repair contracts, a new market segment for MMA,” Mr Weber said.

“Two platform support vessels will enter the fleet in FY17 and have been contracted to Inpex on a long-term (five+five-year) production support contract.”

An interim dividend of 4 cents per share has been declared, down from 5.5 cents per share despite the jump in net profit and a 80 per cent increase in revenue to $456.3 million from the previous corresponding period.

Mr Weber said cost cutting and measures to improve productivity were under way, and the second half of the financial year was expected to be weaker, as a combined result of the Gorgon project nearing completion and lower oil prices.

However, he said a strong cash flow from the first half of the year and the company’s solid balance sheet would put MMA “in a good position to weather the storm”.

MMA changed its name from Mermaid Marine Australia last December to consolidate the operations of Mermaid Marine and Mermaid Marine Asia, as well as the subsidiaries of former Singapore-listed Jaya Holdings that it purchased in June for $550 million.

MMA shares closed the day's trade down 4.8 per cent to 98.5 cents per share.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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