This group, which is a leading provider of self-propelled and self-elevating support vessels for the offshore energy sector, announced the award of a new long-term contract for one of its vessels in the Gulf Cooperation Council regions.
The contract, which spans a total of five years, inclusive of optional extensions, contributes to further improvement in fleetwide average day rates.
The new order takes the group’s backlog up to $464m.
Chairman Mansour Al Alami stated that:
"We are pleased to secure this new long-term contract with one of our key regional clients.
This award reinforces the continued high demand for our vessels and reflects the strong utilisation of our fleet in the region.
We remain committed to supporting our client's projects and delivering high-quality services across the GCC.
The revised EBITDA guidance for 2024 reflects the favourable market conditions."
The group, which was established in Abu Dhabi in 1977, has become a world-leading provider of advanced self-propelled self-elevating support vessels.
The GMS fleet of 13 SESVs, which are amongst the youngest in the industry, support the group’s clients in a broad range of offshore platform refurbishment and maintenance activities, well intervention work, and offshore wind turbine maintenance work as well as offshore platform installation and decommissioning and offshore wind turbine installation.
The vessels are four-legged and are self-propelled, which means they do not require tugs or similar support vessels for moves between locations in the field, which makes them significantly more cost-effective and time-efficient than conventional offshore support vessels without self-propulsion.
They have a large deck space, crane capacity, and accommodation facilities for up to 300 people that can be adapted to requirements.
Its fleet serves the offshore energy industries from its offices in the United Arab Emirates, Saudi Arabia, and Qatar.
The group's assets are capable of serving clients' requirements across the globe, including those in the Middle East, Southeast Asia, West Africa, North America, the Gulf of Mexico, and Europe.
The company revised its adjusted EBITDA guidance for 2024 by $3m to now be in the range of $95m to $100m.
CFO Alex Aclimandos stated that:
"We are delighted to have reached this agreement confirming the favourable fundamentals for our business going forward and allowing us to continue to successfully deleverage.
Our net debt today stands at $224m.
Supported by the projected lower cost of financing and the continuing demand for our vessels, the business will generate free cashflow that will help us achieve our various objectives to increase our shareholders investment value.
As for our guidance for 2025, we are in the process of revisiting it and shall share it with you in the next couple of months.”
Analyst Daniel Slater at Zeus Capital has reacted positively to the group’s news.
He states that the company is now looking to establish dividends and/or buybacks in due course.
In anticipation of further new contract wins, further guidance upgrades, and periodic financial results to highlight all this to the market, Zeus has a positive outlook for the shares and values them at 29p.His estimates for the current year to end-December, are for sales of $167.2m ($151.6m), with adjusted pre-tax profits rising substantially to $42.4m ($24.2m), with earnings of 3.2c (1.9c) per share.
The shares reacted to the news yesterday by closing at 17.25p, while I am confident that they will rise back up to my previous TP of 19.5p.
(Profile 30.11.23 @ 13p set a Target Price of 16p*)
(Profile 22.01.24 @ 15.95p set a Target Price of 19.50p*)
Comments