MMA Offshore issues trading update after charters are suspendedCompany News // August 12, 2016
Following a trading update issued on 14 June 2016, MMA Offshore Limited says there have been material developments in respect of two of the company’s vessel contracts.
"A key contract in Southeast Asia covering two of our vessels has been suspended due to issues associated with our client’s drilling campaign," said the company. "MMA is working to mitigate the impact of this suspension by seeking alternative deployment for the vessels. However, the rates and utilisation for these vessels are expected to be significantly lower than our original expectations as a result of this development.
"In addition, the company is now expecting a significant rate reduction on a three-vessel contract with a client in the Middle East flowing from a contract renegotiation currently underway."
The company said the impact of these developments is an expected reduction in EBITDA for the 2017 financial
year in the order of approximately US$10 million.
"Whilst it is early in the new financial year, it is not clear at this stage whether the company will be able to recover the potential earnings shortfall having regard to current market conditions," said MMA Offshore in a statement, "although MMA remains focused on doing so."
MMA said it is in ongoing dialogue with its banking syndicate who continue to be supportive of the company in what it described as "a very challenging market."