Topaz Energy and Marine Q1 2017 revenue falls by 25%
CEO of Dubai-based offshore support vessels provider says financial performance "stable" if compared to challenging economic conditions prevailing in the market
Topaz Energy and Marine, the Dubai-based offshore support vessel company, has announced a decline in revenues in the first quarter of this year.
Revenue for the period was $58.2mn, a decrease of 25.1% against corresponding revenue of $77.7mn in Q1 2016.
“When taking into consideration the unprecedented challenges facing our industry which have resulted in a collapse in demand that has impacted charter rates and ultimately affected the profitability of offshore vessel providers, our Q1 2017 results can be regarded as stable,” René Kofod-Olsen, chief executive officer, Topaz Energy and Marine, has said.
Topaz is attributing the decrease in revenue to a number of factors, including:
anticipated off-hire of barges and tugs in Kazakhstan of $4.2mn
(ii) off-hire of two subsea vessels of $2.2mn,
(iii) lower mobilisation revenue of $0.9mn
(iv) loss of revenue of $4.6mn due to vessels laid up in the MENA region
(v) loss of revenue of $6.6mn due to increasing market pressure on rates and utilisation in the MENA and Africa regions.
However, this decrease is partly offset by a new vessel deployed on a long-term contract of $0.9mn.
“Revenue for the quarter is at $58.2m which is down 25% compared with the same period last year. EBITDA is at $31.2mn, down 21% compared with the same period last year. Our EBITDA margin has improved to almost 54% on the back of our persistent efforts to optimise our cost base and reshape the organisation to better perform in a volatile and unpredictable market. Our operating costs reduced by $9mn and stand at $38.5mn for the quarter,” Kofod-Olsen was quoted as saying in the press release received by arabianoilandgas.com.
“The outlook for the OSV (offshore support vessels) market remains challenging. Although a rebound in oil prices will eventually boost demand, current significant over-capacity is resulting in rate pressures. 2017 is set to be a very difficult year for the industry, but we are seeing green shoots in some markets and anticipate further recovery in the later part of the year. With our strong track record and client relationships, as reflected in our global vendor status from BP, Chevron, Exxon and Saipem, Topaz is well positioned to benefit from this recovery,” the CEO commented.