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    GulfMark reports high level of utilization and revenues - confident about prospects for 2014

    Company News // February 27, 2014

    GulfMark Offshore has announced its results for the three- and twelve-month periods ended December 31 2013.

    For the three months ended December 31st 2013, consolidated revenue was US$124.6 million, and net income was US$25.6 million, or US$0.97 per diluted share.

    For the twelve months ended December 31 2013, consolidated revenue was US$454.6 million and net income was US$70.6 million, or US$2.70 per diluted share.

    Quintin Kneen, President and CEO, said: "In 2013 we saw strong and continuously improving utilization and day rates. We exited the year with our highest fourth-quarter revenue ever, and we expect full-year 2014 average day rates and utilization to be even better than what we experienced in 2013.

    "Consolidated annual revenue increased 17 per cent in 2013 and we expect revenue will increase another 15 per cent  to 22 per cent in 2014, to be in the range of US$525 to US$555 million for the year, including first-quarter revenue of between US$118 million and US$123 million.

    "The Americas region was exceptionally strong during 2013, with average utilization for the year surpassing 90 per cent for the first time since 2008. This strength was primarily driven by high levels of drilling activity in the Gulf of Mexico. Although we are currently seeing indications of temporary softness as vessel deliveries precede new rig additions, we expect this strength to resume during the second half of the coming year, as the number of floating rigs operating in the area is expected to increase by as much as one-third from the current count.

    "In addition, we continue to make improvements in our operational efficiency in Brazil that will allow us to improve profitability in that area. Mexico continues to deliver a strong return on investment for us, and we believe it will be an area of growth over the next couple of years as we are encouraged by the potential impact that recent reform will have on offshore drilling activity.

    "The North Sea continued to be a strong market with our utilization also surpassing 90 per cent for the year. We experienced the annual seasonal slowdown during the fourth quarter and likewise thus far in 2014, although we continue to expect strong second and third quarters. Current indications point to a meaningful increase in drilling activity for the 2014 season. We believe the drilling fleet will increase by more than 20 per cent during 2014 in this region, and this type of work requires support in continually more challenging and remote areas. We continue to grow in this region, and earlier this month we purchased a UK-based 250 Class, 2012-built PSV and took delivery of our second Arctic-class vessel in Norway.

    "We continue to earn high returns on our Southeast Asia fleet. Day rates remained steady, and our quarterly utilization increased again for the third consecutive quarter, surpassing 90 per cent for the first time since 2010. Long-term fundamentals continue to improve, and we expect this strength to remain steady during 2014 as the Southeast Asia market continues to increase offshore drilling activity.

    "During the fourth quarter, we took delivery of the fifth vessel in our 11-vessel new-build programme. All five vessels delivered in 2013 were delivered into the North Sea market. As previously mentioned, we took delivery of our sixth new-build, an Arctic-class vessel in Norway, earlier this month. Our next vessel deliveries will be later in the first quarter of 2014, when we will take delivery of the second of our 250 Class PSVs for the UK market and the first U.S.-built 280 Class PSV in our newbuild programme.

    "We will continue our second vessel stretch programme, the 260 Class stretch programme in the US Gulf of Mexico. We have completed two vessels in that programme, and those vessels went to work immediately. We are currently stretching two more vessels, and four others are scheduled during 2014.

    "Subsequent to the quarter, we completed the purchase of a 2012-built 250 Class DP2 PSV. This vessel is operating in the UK sector of the North Sea market. In addition to the five remaining vessels under construction and our successful vessel stretch programme, we continue to search for well-appointed, well-constructed, secondary market vessels at good prices, and likewise to dispose of older, non-core vessels when the market presents us with solid opportunities to do so. We did not find any disposal opportunities in the fourth quarter, but continue to focus on one-off vessel acquisitions and disposals that enhance the overall strength of our fleet.

    "We are very excited about what we believe 2014 holds for GulfMark, and we will continue to make operational improvements and fleet investments that create long-term value for our stockholders, promote superior customer service for our customers, and provide a safe and rewarding environment for our employees."


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