Australia: MMA Offshore adversely affected by low oil priceCompany News // August 21, 2015
MMA Offshore Chairman, Tony Howarth, says 2015 "was an extremely challenging year for the company as the collapse in world oil prices impacted vessel operators globally."
In the company's report for the year ended 30 June 2015, Mr Howarth said: "Rates and utilisation fell significantly in all of MMA’s operating regions resulting in lower profitability and a disappointing overall result for shareholders
“In the current environment, MMA is focused on maximising operating performance through a strong focus on customer requirements, safe and reliable operations, competitive tendering and taking actions to improve and streamline the business.”
MMA Offhsore's Managing Director, Jeffrey Weber said: “MMA performed well in the first half but second half performance was impacted by the rapid downturn in the market compounded by a reduction in construction activity in Australia.
“Vessel utilisation fell from 76 per cent in the first half to 65 per cent in the second half and day rates fell up to 30 per cent as oil and gas companies cut capital and operating expenditure.
“MMA’s international fleet was hit particularly hard with utilisation dropping to 61 per cent in the second half and
rates at historical lows.
Mr Weber said MMA’s planned vessel sales programme was also difficult to execute in a very poor market.
“The Supply Base also had a challenging year with reduced construction and drilling activity impacting profitability," he explained. "Pleasingly a major long term contract was recently signed, securing a stable base-load of
earnings for that business going forward.
“A restructuring programme was undertaken during the year to reduce overheads and optimise the organisational structure with annualised savings of at least $15m expected to be achieved. The drive to increase efficiencies will continue into FY2016.
“Whilst market conditions are as challenging as we have seen, MMA is currently taking a range of actions which will strengthen the business and position it well to take advantage of the future upswing in the cycle.”
The company has reported a net loss after tax of A$51.3 million for the year after booking a non-cash impairment charge of A$120.7 million against the carrying value of the company’s vessel fleet and goodwill associated with the Supply Base business.
Excluding the impact of the impairment charge, the company recorded a net profit after tax for the year of A$55.3 million up 2.7 per cent on the previous financial year and earnings per share 15.0c, down 20.2 per cent on the previous financial year.