MMA Offshore delivers half year profit - in good position to weather downturnCompany News // February 24, 2015
MMA Offshore has delivered a half year profit of A$55 million.
Commenting on the result, MMA’s Chairman, Mr Tony Howarth said: “The directors of MMA Offshore are pleased to announce a profit before tax for the first half of A$55.3 million, in line with expectations and up significantly on the previous corresponding
"The directors are also pleased to announce that an interim dividend of 4.0 cents per
share has been declared for the half year ended 31 December 2014.
“The recent plunge in the oil price has had a dramatic impact on the sector globally with oil and gas majors reacting by curbing capital expenditure and seeking to reduce their operating costs.
"The Australian construction market is less impacted in that most of the current offshore support work relates to the construction of large LNG projects which have already been sanctioned and are well into the construction phase.
“The international market is expected to be challenging in the current environment with pressure on rates and utilisation across all vessel segments.”
MMA’s Managing Director, Mr Jeffrey Weber, said: "MMA delivered a solid first half result bolstered by a number of key Australian vessel projects.
“The Jaya business contributed to the overall result and, despite the challenging international vessel market, was only marginally below expectations. Integration is progressing very well with a number of significant milestones achieved, including the recent consolidation of the Jaya operations under the MMA Offshore name.
“The Dampier Supply Base continued to experience lower demand as a result of reduced Gorgon construction activity. MMA’s newbuild programme is on track with five new vessels currently under construction. Two ROV Support vessels will be delivered in FY16 and are currently being bid into longer term inspection, maintenance and repair (IMR) contracts, a new market segment for MMA. Two PSVs will enter the fleet in FY17 and have been contracted to INPEX on a long term (5+5 year) production support contract.
“Whilst there is no doubt that the current market is as challenging as we have seen for many years, we are still continuing to see activity in all regions with tenders being released for new and existing work, albeit in a highly competitive market. Cost reduction and productivity improvement measures are underway as the company looks to optimise the business for the future.
"We expect activity in the second half to be weaker as a result of reduced Australian construction activity as the Gorgon project moves to completion, combined with the impact of lower oil prices. However, the business generated strong cash flow in the first half and the balance sheet is solid so we are in a good position to weather the storm.”