Gulf Marine debt grows as new contracts increase working capital requirements

Offshore support vessels provider Gulf Marine Services has seen net debt increase over the first few months of its trading year on the back of increased working capital requirements and expenditures on mobilising vessels for new contracts.

Net debt expanded 6.81% over the four months ended 30 April to $398.2m; however, Gulf Marine's view of trading for 2018 remained unchanged, with an improvement on its 2017 results expected as "market conditions gradually recover".

Gulf Marine stated that its debt levels would reduce as operating cash flows begin to reflect its "improved fleet utilisation" and its minimal capital expenditure commitments.

GMS also announced two charter awards in the Middle East and North Africa region during the period, a 24-month contract for a mid-size class vessel and a 16-month contract extension for a small class vessel, increasing the firm's backlog to $181.2m in the process.

Duncan Anderson, chief executive of GMS, said, "Against the background of continuing relative strength in the oil price, we are making satisfactory progress in recovering our utilisation levels and strengthening our relationships with key strategic clients in the wider MENA region."

"We would hope to see a progressive improvement in charter rates as market capacity begins to tighten in 2019 and beyond, and a more substantial improvement in our results, benefitting from our high operational gearing," Anderson added.

As of 1200 BST, Gulf Marine shares had lost 3.43% to 48.29p.