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  • Writer's pictureMark Watson-Mitchell

Gulf Marine Services – higher utilisation levels and higher day rates will drive the shares higher

Operating out of the Middle East, North Africa and Europe Gulf Marine Services (LON:GMS) provides self-propelled, self-elevating support vessels to groups in the offshore, oil, gas and renewables sector.

Its interim results to end June showed revenues up 29% from $51.4m to $66.4m and a big increase in its EBITDA to $37.3m ($26.5m), leaving its profits after tax up more than six-fold at $13.1m ($2.0m).

Stronger usage

Higher utilisation levels of its fleet of vessels at a time when day rates had been rising was helpful.

It was also boosted by the group’s management continuing to focus on saving operating costs.

Reduction in debt

There was also a good first-half reduction in the group’s net debt to $341.4m ($371.3m) as part of the ongoing deleveraging strategy.

Orders increasing

The group anticipates seeing continued improvements in day rate and utilisation levels, but at a more gradual rate.

Its secured backlog was $163.3m as at 30 June 2022 ($215.4m) and it is currently working on a number of projects that will have a favourable impact on its backlog.

Executive Chairman, Mansour Al Alami, stated that:

"I am pleased to report GMS operational results for first half of the year which provides us a solid platform for achieving our full year EBITDA guidance. The first half performance reflected higher day rates, improved utilisation and efforts made on continuous cost savings.

We will realise the benefits of improved day rates on new contract awards announced during H1 2022. As the Middle Eastern market continues to increase production, we expect an increase in demand for our sector, which in turn will lead to an increase in day rates and utilisation over time."


The group’s shares initially dipped on the back of the results on very high dealing volume but are now regaining composure at around the 6p level, still looking undervalued.

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