Deep Sea Supply optimistic despite concerns - says newbuildings beginning to have an impactCompany News // November 13, 2014
In the third quarter of 2014 Deep Sea Supply reported consolidated revenues
of US$44.0 millionand EBITDA of US$23.0
Following financial expenses of US$5.4 million, the pre-tax profit was US$6.3 million.
For the nine months period ended 30 September 2014, the company reported consolidated revenues of US$119.0, EBITDA of US$61.8 million and pre-tax result of US$14.4 million.
The Board of Directors has decided to distribute a dividend of US$0.02 per share.
Comparing the third quarter of 2014 with the same period in 2013, revenues increased by US$4.3 million or 11 per cent. The main reasons for the increase are the commencement of term contracts for newly delivered PSVs and improved utilization and rates for the AHTS vessel Sea Lynx operating in the North Sea spot market.
Vessel operating expenses increased by US$1.3 million compared with the second and third quarters of 2014, mainly as a result of the new vessels coming into service during the quarter.
In October 2014, DESS took delivery of the last vessel in the 16 vessel newbuilding programme. Following this, the company has no vessels under construction.
During the last quarter, the Company has secured in total 9 medium to long term
charter contracts and extended 2 other charter contracts.
"Despite the recent negative newsflow from the rig market and a reduced oil
price, activity remains at satisfactory level in the OSV markets internationally," said the company. "In Brazil, Petrobras has awarded several long term contracts for both AHTS and PSVs during the year, and the market is expecting new tenders for OSVs in Brazil in the coming quarters.
"The company also sees good activity levels for long term contracts for PSVs in Africa and North Sea. The spot market for both AHTS and PSV in the North Sea remains volatile. The company has limited exposure with currently 1-2 vessels operating in the North Sea spot market."
Deep Sea Supply said its contract coverage and firm contract backlog of US$217 million as of 1 October 2014 provides good earnings visibility.
In the last few months, it has won several medium and long term contracts, and the focus going forward will be to secure further medium to long term employment.
The company said it sees several long term opportunities, but also expects some of the vessels to be employed on short and medium term contracts.
As many of the newly delivered vessels gradually commence long term contracts during the fourth quarter of 2014 earnings are expected to increase compared to previous quarters.