04 September 2024

Gulf Marine Services PLC

('Gulf Marine Services', 'GMS', 'the Company' or 'the Group')

Announcement of Interim results for the six months period ended 30 June 2024

GMS, a leading provider of advanced self-propelled, self-elevating support vessels serving the offshore oil, gas and renewables industries, is pleased to announce its interim results for the six months period ended 30 June 2024 (H1 2024).

 

Overview

	H1 2022	H1 2023	H1 2024	H1 2024 versus
	US$ m	US$ m	US$ m	H1 2023 change
Revenue	66.4	74.3	80.7	9%
Gross profit	27.4	34.8	38.8	11%
Adjusted EBITDA1	37.3	44.3	47.7	8%
Net profit	13.1	8.7	7.4	-15%
Net Leverage Ratio1	4.56:1	3.75:1	2.62:1	-30%

H1 Financial and Operational Highlights:

·	Net leverage ratio1 on 30 June 2024 improved to 2.62:1 (31 December 2023: 3.05:1). Net bank debt1 lowered by US$ 28.8 million to US$ 238.5 million (31 December 2023: US$ 267.3 million) as the Group continues its focus on deleveraging. In addition to its contractual obligations, the Group made an additional payment of US$ 5.0 million in debt reduction. Further measures were taken to minimise interest charges.
·	The Group achieved revenue of US$ 80.7 million for the first half of 2024, reflecting an increase of 9% compared to US$ 74.3 million in H1 2023. The increase in revenue was attributed to improvements in fleet average day rates to $32.4k (H1 2023: US$ 30.4k) This was largely driven by higher demand for our S-Class vessels. The increase was partially offset by a decrease in fleet average utilization from 93% in H1 2023 to 91% in H1 2024. This decrease was largely attributed to necessary planned downtime for the maintenance and drydocking of various S-Class and K-Class vessels.
·	Gross profit margin improved to 48% (H1 2023: 47%).
·	Adjusted EBITDA increased by 8% reaching US$ 47.7 million (H1 2023: US$ 44.3 million) driven by the increase in revenue. Adjusted EBITDA margin remained at 59%.
·	Group's net profit for the first half of 2024 decreased by 15% to US$ 7.4 million (H1 2023: US$ 8.7 million). Despite the growth in revenue and reduction in finance costs, net profit reduced as a consequence of the impact of fair value of warrants with the increased share price, increase in tax expense and general administrative expenses.
·	Finance expenses decreased to US$ 12.3 million (H1 2023: US$ 17.5 million), driven by the cessation of 250 basis points (bps) Profit-In-Kind (PIK) interest, reduction of margin rate by 90 bps, and a further reduction in margin by 10 bps. The first two reductions were due to achieving a net leverage ratio below 4:1 as of 31 March 2023, and the third reduction was achieved upon reaching a net leverage ratio below 3:1 as of 31 March 2024.
·	Fair value of the warrants at 30 June 2024 amounted to US$ 11.3 million (31 December 2023: US$ 14.3 million) representing 53.4 million warrants (31 December 2023: 87.6 million warrants). The reduction in the number of outstanding warrants is due to their partial exercise/settlement during H1 2024 resulting in issue of 53.5 million ordinary shares. The fair value of the warrants exercised amounting to US$ 10.4 million was reclassified from liability to equity. Further, the impact of changes in the fair value of the warrants increased to US$ 7.5 million during H1 2024 (H1 2023: US$ 0.7 million), primarily due to increase in the Group's share price and partially offset by a decrease in number of outstanding warrants.
·	The basic earnings per share for the period decreased to US$ 0.68, as compared to US$ 0.82 in the first half of 2023. Further, the diluted earnings per share for the period decreased to US$ 0.63 compared to US$ 0.82 in the first half of 2023. Had the warrants not been exercised (resulting in issue of additional shares during the period), basic loss per share and diluted loss per share would have been US$ 0.02 and US$ 0.02 respectively.

 

¹ This represents an Adjusted Performance Measure (APM) as defined in the Glossary which is included in Note 24 to the interim consolidated Financial Statements.

 

Outlook:

·	Adjusted EBITDA guidance for 2024 remains in the range of US$ 92 - 100 million.
·	Demand in the market remains strong due to a combination of high market activity and limited vessel availability. An estimated 18-21 new vessels are expected to be operational in the next 2 to 3 years. We expect market growth and retirement of aged assets from 2025-2027 to absorb the supply increase.
·	Secured backlog was US$ 426.8 million on 30 June 2024 (30 June 2023: US$ 301.4 million), which reflects the additional contract awards announced over the last 12 months, offset by the revenue recognised.
·	Contract awards announced in H1 2024 have a combined total charter period of 14.3 years (H1 2023: 2.4 years) which underscores the ongoing strength in demand for our vessels across the various markets in which we operate. The Group is currently working on potential new contracts to further improve the inventory and address the backlog.

 

Mansour Al Alami, Executive Chairman, GMS said:

"We remain committed to our strategy of deleveraging, prioritizing the shift of value from lenders to shareholders, and are on course to meet our 2024 adjusted EBITDA guidance. This progress has been bolstered by higher day rates and disciplined performance in the first half of the year. Despite ongoing challenges such as operational disruptions, inflation, and elevated borrowing costs, we are actively managing these risks and are confident in our ability to further navigate the Company towards continued success."

 

 

 

Enquiries: Gulf Marine Services PLC Mansour Al Alami Executive Chairman	Tel: +44 (0)20 7603 1515
Celicourt Communications Mark Antelme Philip Dennis Ali AlQahtani	Tel: +44 (0) 20 7770 6424

Chairman's Review

Group performance

During the first half of 2024, the Group showed an improvement in its financial performance, driven by a 7% increase in average day rates. Although fleet average utilization was 91%, reflecting a 2% decline from H1 2023, this decrease was attributable to planned maintenance and drydocking. It's crucial to highlight that the increase in day rates represent fleet-wide averages. With some contracts carried over from previous years at lower rates, the actual increase for new contracts surpassed the reported average, showcasing a positive trend in securing new contracts at higher rates. The revenue growth contributed to improved adjusted EBITDA of US$ 47.7 million, compared to US$ 44.3 million reported in H1 2023.

 

Capital structure and liquidity

 

The Group remains committed to deleveraging. The net leverage ratio was reduced to 2.62 times as of 30 June 2024, down from 3.05 times on 31 December 2023. This improvement was driven by a reduction in net bank debt to US$ 238.5 million (31 December 2023: US$ 267.3 million) and improved adjusted EBITDA. The Group prepaid US$ 21.0 million of its obligation for the year, during H1 2024, towards its debt and made an additional payment of US$ 5.0 million. Achieving a net leverage ratio below 3:1 at the end of the first quarter enabled us to reduce the margin rate by 10 bps, which is in addition to the 250 bps reduction in margin rate achieved in H1 2023, when the net leverage was reduced below 4:1. Subsequent to the period end, the Group made further prepayments towards the bank borrowings of US$ 11.0 million.  

 

We recently announced a US$ 300 million debt facility, marking another milestone in the Group's progress. This potential transaction is commercially approved by all parties and the contractual arrangements, currently in progress, are expected to be finalised within the next couple of months. Management is confident that the deal will be signed consistent with the agreed term sheet. This development indicates a new beginning for us and paves the way to meet our long-term goals of growth and rewarding shareholders, while maintaining our dedication to agility.

 

This facility enables us to increase shareholder value through strategic investments in growth, as well as by reducing restrictions on dividend payments and share buybacks. GMS will seek opportunities to add assets that can promptly enhance our backlog and profitability, ensuring favourable terms for these acquisitions.

GMS is closely observing the encouraging developments in its shareholder registry. We are delighted to welcome our new investors.

 

Board Update

 

By way of a separate announcement issued today, the Company is announcing that Hassan Heikal, Deputy Chairman of the Company, is stepping down from the Board with immediate effect.  The Board is grateful to Mr Heikal for the support and guidance that he has provided to the Board and the Company over the past four years and extends to him every good wish for the future.

 

Outlook

 

Given the Group's improved performance in H1 2024, we reaffirm our adjusted EBITDA guidance for 2024, projecting a range between US$ 92 million and US$ 100 million. This guidance is aligned with our current market conditions and expectations. We are also working on revisiting our EBITDA guidance for 2025 towards year end. Further, our secured backlog improved to US$ 426.8 million on 30 June 2024 (30 June 2023: US$ 301.4 million).

 

Mansour Al Alami

Executive Chairman

03 September 2024

 

 

Notes to Editors:

Gulf Marine Services PLC, a company listed on the London Stock Exchange, was founded in Abu Dhabi in 1977 and has become a world leading provider of advanced self-propelled self-elevating support vessels (SESVs). The fleet serves the oil, gas and renewable energy industries from its offices in the United Arab Emirates, Saudi Arabia and Qatar. The Group's assets can serve clients' requirements across the globe, including those in Arabian Peninsula region and Europe.

 

The GMS fleet of 13 SESVs is amongst the youngest in the industry. The vessels support GMS's clients in a broad

range of offshore oil and gas platform refurbishment and maintenance activities, well intervention work and offshore wind turbine maintenance work (which are opex-led activities), as well as offshore oil and gas platform installation and decommissioning and offshore wind turbine installation (which are capex-led activities).

 

The SESVs are categorised by size - K-Class (Small), S-Class (Mid) and E-Class (Large) - with these capable of operating in water depths of 45m to 80m depending on leg length. 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; this 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 the requirements of the Group's clients.

 

Gulf Marine Services PLC's Legal Entity Identifier is 213800IGS2QE89SAJF77

www.gmsplc.com

Disclaimer

The content of the Gulf Marine Services PLC website should not be considered to form a part of or be incorporated into this announcement.

 

Financial Review

	H1 2022	H1 2023	H1 2024	H1 2024 versus
	US$ m	US$ m	US$ m	H1 2023 change
Revenue	66.4	74.3	80.7	9%
Gross profit	27.4	34.8	38.8	11%
Adjusted EBITDA	37.3	44.3	47.7	8%
Net profit for the period	13.1	8.7	7.4	-15%
Net Leverage Ratio	4.56:1	3.75:1	2.62:1	-30%

 

Revenue and segmental profit

 

The Group reported 9% increase in revenue, reaching US$ 80.7 million compared to the previous period's US$ 74.3 million, driven by an increase in average day rates for the period by 7%. The increase is partially offset by a decrease in fleet average utilisation from 93% in H1 2023 to 91% in H1 2024.

 

Average day rates across the fleet increased by 7% to US$ 32.4k compared to the previous period's US$ 30.4k with improvements in S-Class and K-Class vessels. S-Class average day rates rose by 21% to US$ 40.1k (H1 2023: US$ 33.1k), while K-Class average day rates improved by 7% to US$ 22.6k (H1 2023: US$ 21.2k). E-Class normalised average day rate also improved by 2% to US$ 41.3k (H1 2023: US$ 40.6k).

 

Utilisation continues to be at a high level; however, it decreased by two percentage points to 91% compared to H1 2023's 93%.  S-Class and K-Class vessels achieved relatively lower utilisation at 86% (H1 2023: 96%) and 91% (H1 2023: 95%), respectively, due to planned downtime for maintenance and drydocking. E-Class vessels utilisation improved by 6% to 94% (H1 2023: 88%) reflecting improved backlog.

 

The table below shows the contribution to revenue and segment gross profit made by each vessel class during the period:

 

(US$'000) Vessel Class	Revenue		Gross profit before adjustment for depreciation, amortization and impairment charges
	H1 2024	H1 2023	H1 2024	H1 2023
K-Class vessels	28,178	27,781	17,383	17,244
S-Class vessels	18,947	17,691	12,951	12,407
E-Class vessels	33,593	28,813	24,231	19,850
Total	80,718	74,285	54,565	49,501

 

Cost of sales and general & administrative expenses

 

Cost of sales as a percentage of revenue remained flat at 52%. Depreciation and amortisation charged to cost of sales increased to US$ 15.5 million (H1 2023: US$ 14.8 million) due to reversal of previously recognised impairments, as at 31 December 2023 and additional capital expenditure incurred during the current and prior period.

 

Underlying general and administrative expenses¹ (which excludes depreciation and amortisation) increased as a percentage of revenue to 8% from 6% in H1 2023 driven by increased staff costs and professional fees.

 

¹Represents general and administrative costs excluding depreciation, amortisation and other exceptional costs. A reconciliation of this measure is provided in Note 5 to the interim consolidated financial statements

Finance expenses

Finance expenses decreased to US$ 12.3 million (H1 2023: US$ 17.5 million), driven by the cessation of a 250 basis points (bps) Profit-In-Kind (PIK), a reduction of the margin rate by 90 bps, and a further reduction in the margin by 10 bps. The first two reductions were due to achieving a net leverage ratio below 4.0:1, as of 31 March 2023, and the third reduction was due to achieving a net leverage ratio below 3.0:1 as of 31 March 2024.

 

A net foreign exchange loss of US$ 0.3 million in H1 2024 (H1 2023: loss of US$ 0.6 million) arose from unfavourable movements in exchange rates of the Pound Sterling against the US Dollar.

 

 

Fair value of the warrants

Fair value of the warrants, at 30 June 2024 amounted to US$ 11.3 million (31 December 2023: US$ 14.3 million) representing 53.4 million warrants (31 December 2023: 87.6 million warrants). The reduction in the number of outstanding warrants is due to their partial exercise/settlement during H1 2024 resulting in issue of 53.5 million ordinary shares. The fair value of the warrants exercised amounting to US$ 10.4 million was reclassified from liability to equity. Further, the impact of changes in the fair value of the warrants increased by US$ 7.5 million during H1 2024 (H1 2023: US$ 0.6 million), primarily due to increase in the Group's share price and partially offset by a decrease in number of outstanding warrants.

 

Tax expenses

 

Tax expense increased to US$ 2.5 million (H1 2023: US$ 1.3 million) as the introduction of UAE corporate tax and other tax expenses negatively impacted our H1 figures.

 

Earnings

 

Net profit for the period decreased by 15% to US$ 7.4 million compared to US$ 8.7 million reported in H1 2023. Despite the growth in revenue and reduction in finance costs, net profit reduced due to an increase in the fair value of warrant liabilities and an increase in general & administrative expenses (as explained above).

 

Cash flow and liquidity

 

During the period, the Group delivered higher operating cash flows of US$ 45.6 million (H1 2023: US$ 42.1 million). This increase is primarily from higher revenues generated during the period. The net cash outflow from investing activities increased to US$ 6.3 million (H1 2023: US$ 2.6 million).

 

The Group's net cash outflow from financing activities was US$ 40.6 million (H1 2023: US$ 46.7 million) mainly comprising of repayments to the banks of US$ 30.0 million (H1 2023: US$ 28.6 million) and interest paid of US$ 12.0 million (H1 2023: US$ 16.3 million). The Group continues to focus on deleveraging by prepaying US$ 21.0 million of its obligation for the period, during H1 2024. Further, an additional payment of US$ 5.0 million was made towards its debt during the period. The above cash outflows were partially offset by the funds received on issuance of share capital because of warrants being exercised. Subsequent to the period end, the Group made a prepayment of US$ 11.0 million to the banks.

 

The Group has US$7.4 million of available resources comprising cash and cash equivalents at the reporting date. Further, it has a working capital facility of US$ 15.0 million (31 December 2023: US$ 15.0 million) which can be utilised to draw down cash, of which US$ 2.0 million (31 December 2023: US$ 2.0 million) was utilised, leaving US$ 13.0 million (31 December 2023: US$ 13.0 million) available for drawdown. The facility expires alongside the main debt facility in June 2025. Please refer to the Net Bank Debt and Borrowings section for the update on refinancing.

 

 

Balance sheet

Total non-current assets at 30 June 2024 decreased to US$ 614.7 million (31 December 2023: US$ 621.0 million), reflecting depreciation charge of US$ 17.9 million (H1 2023: US$ 15.6 million) on the non-current assets. The decrease is partially offset by capital expenditures of US$ 11.6 million (H1 2023: US$ 6.4 million) representing cost of planned equipment upgrades and dry-docking of vessels.

 

Total current assets at 30 June 2024 increased to US$ 49.8 million (31 December 2023: US$ 47.4 million). Trade receivables stood almost flat at US$ 30.4 million (31 December 2023: US$ 30.6 million). The Group reassessed the position of the client which entered administration during 2023 and decided to recognise an additional provision of US$ 0.25 million. Further, accrued revenue increased to US$ 7.6 million (31 December 2023: US$ 2.7 million).

 

The total current liabilities increased to US$ 306.3 million (31 December 2023: US$ 99.5 million), primarily due to the reclassification of bank borrowings from non-current to current liabilities considering its maturity in June 2025. This increase also reflects higher trade and other payables and lease liability amounting to US$ 38.4 million (31 December 2023: US$ 35.1 million) and US$ 2.7 million (31 December 2023: US$ 1.6 million), respectively. The increase in current liabilities is partially offset by payments made during H1 2024 towards the Group's debt facilities and reduction in the fair value of warrants due to a lower number of warrants after their partial exercise during H1 2024.

 

While current assets are significantly lower than current liabilities, mainly due to the reclassification of bank borrowings, the Group expects to honour all its liabilities as they fall due. The Group reaches this conclusion by excluding the impact of the current term loan expiring in the next 12 months, as we have successfully reached an agreement to refinance the term facility following the period end (refer below section), as well as the impact of the derivative financial instrument liability classified as current (as it will not generate a cash outflow of funds).

 

Total non-current liabilities reduced to US$ 6.3 million (31 December 2023: US$ 238.6 million) primarily due to the reclassification of bank borrowings from non-current to current liabilities, as explained above.

Net Bank Debt and Borrowings

Net bank debt reduced to US$ 238.5 million (31 December 2023: US$ 267.3 million). This was a result of management's commitment to accelerate deleveraging. The Group prepaid US$ 21.0 million of its obligation for the year, during H1 2024. Further, an additional payment of US$ 5.0 million was made towards the Group's debt during the period.

 

The Group's existing debt facility is set to mature in June 2025. On 1 August 2024 the Group reached an agreement to refinance its current bank debt. Three banks, two of which are current lenders, will have an equal participation in the refinancing facilities.  This potential transaction is commercially approved by all parties and the contractual arrangements, currently in progress, are expected to be finalised within the next couple of months. Management is confident that the deal will be signed consistent with the agreed term sheet.

 

The new facility will consist of a term loan of an amount equivalent to USD 250 million in United Arab Emirates Dirhams (AED) as a well as a working capital facility of an amount equivalent to USD 50 million, also in AED. The loan will have a tenor of five years from the facility agreement date. 80% of the term loan will be amortized quarterly over 5 years with a 20% balloon. Exposure to the AED will be hedged in full.

 

This landmark transaction will have significant advantages to all stakeholders. The financing costs, currently standing at 300 bps (+ SOFR) will gradually go down to 225 bps (+ EIBOR) when net leverage gets below 2.0 times. At the transaction date, expected net leverage levels, the financing costs will be at 250 bps plus EIBOR. This will provide additional cash liquidity to GMS. The surplus liquidity the deal provides will accelerate the achievement of GMS goals.

 

Going concern

 

The Group's forecast indicates that its refinanced debt facility, as announced on 1 August 2024, will provide sufficient liquidity for its requirements for at least the next twelve months and accordingly the condensed consolidated financial statements for the Group for the current period have been prepared on the Going Concern basis. For further details please refer the going concern disclosure in Note 2 to the condensed consolidated financial statements.

Related party transactions

 

During the period, there were related party transactions for catering services of US$ 82k (H1 2023: US$ 402k), overhauling services of US$ 597k (H1 2023: US$ 156k) and laboratory services of US$ 3k (H1 2023: nil) with affiliates of Mazrui International LLC, the Group's second largest shareholder (25.6%).

 

All related party transactions disclosed herein have been conducted at arm's length and entered into after a competitive bidding process. This process ensures that the terms and conditions of such transactions are fair, reasonable, and comparable to those that would be available in similar transactions with unrelated third parties.

 

Risks and uncertainties

 

Several risks and uncertainties could significantly influence the Group's performance for the rest of 2024. The Directors believe that the principal risks and uncertainties have remained consistent since the release of the Annual Report for the year ended 31 December 2023. For a comprehensive analysis of these risks and the Group's mitigation strategies, please refer to pages 12 to 18 of the 2023 Annual Report, available at www.gmsplc.com.

-

·	Utilization levels might decline due to several key factors: a high concentration of customers leading to possible contract shifts and increased competition risk; ADNOC's fleet expansion dominating the UAE market; and potential misalignment of fleet capabilities with evolving client demands, which could necessitate costly upgrades to meet new SESV standards.
·	National Oil Companies (NOCs) in the Arabian Peninsula have local content requirements in their tender processes, favouring suppliers that enhance local investment and spending. This could prevent GMS from securing new contracts or result in financial losses and reduced profit margins on existing contracts, ultimately impacting operating cash flows and net profitability.
·	Geo-political events or pandemics may disrupt safe asset operations due to restricted crew travel. The Group could face commercial and reputational damage from environmental or safety incidents involving employees or contractors. Insufficient preparation for equipment failures, failure to meet client demands, or unpredictable weather may negatively impact the business, and inadequate insurance coverage could lead to financial losses.
·	The business faces short-term liquidity risks from high interest rates and inflation, which could affect debt service and bank covenants. Reduced liquidity may impact future operations and trigger a default, giving lenders the right to accelerate loan repayments and claim assets.
·	Attracting, retaining, recruiting, and developing a skilled workforce is crucial. Losing talent or failing to attract new skilled employees could undermine the business's performance.
·	Political instability in the regions where GMS recruits, could adversely affect its operations. With many key crew members coming from Eastern Europe and Southeast Asia, such instability may disrupt recruitment, retention, and deployment of personnel.
·	Non-compliance with anti-bribery and corruption regulations could harm stakeholder relations and result in reputational and financial losses. GMS is required to comply with complex international and local laws on health, safety, and environmental protection, with increasing costs and stringent requirements. Failure to comply could lead to regulatory investigations. Additionally, adhering to new UAE Corporate Tax Regulations and transfer pricing requirements may impose administrative and financial burdens on the Group.
·	Phishing attempts result in inappropriate transactions, data leakage and financial loss. The Group is at risk of loss and reputational damage through financial cyber-crime.
·	Climate change presents both transition and physical risks to the Group. Transition risks include the global shift toward decarbonization, which may alter investor sentiment, reduce client demand, and introduce new legislation requiring increased reporting and greener alternatives. Physical risks involve rising temperatures affecting working hours and rising sea levels impacting operations.

 

RESPONSIBILITY STATEMENT

 

Financial information for the period ended 30 June 2024.

 

We confirm to the best of our knowledge:

a)	the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of Gulf Marine Services plc and its undertakings, included in the consolidation as a whole as required by DTR 4.2.4R;
b)	the interim management report includes a fair review of the information required by DTR 4.2.7R; and
c)	the interim management report includes a fair review of the information required by DTR 4.2.8R.

 

 

By order of the Board

 

 

Mansour Al Alami   Executive Chairman 03 September 2024

Alex Aclimandos   Chief Financial Officer   03 September 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Independent Review Report to Gulf Marine Services PLC ("the Entity")

Conclusion

We have been engaged by the Entity to review the Entity's condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2024 which comprises the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows, a summary of material accounting policies and other explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2024 is not prepared, in all material respects in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34") as contained in the UK adopted International Accounting Standards  and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 

We read the other information contained in the half-yearly financial report to identify material inconsistencies with the information in the condensed set of consolidated financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the review. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention that causes us to believe that the directors have inappropriately adopted the going concern basis of accounting, or that the directors have identified material uncertainties relating to going concern that have not been appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the Entity to cease to continue as a going concern, and the above conclusions are not a guarantee that the Entity will continue in operation.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

The directors are responsible for preparing the condensed set of consolidated financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted for use in the UK. 

 

As disclosed in note 1, the annual financial statements of the Entity for the year ended 31 December 2023 are prepared in accordance with UK-adopted international accounting standards. 

In preparing the condensed set of consolidated financial statements, the directors are responsible for assessing the Entity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Entity or to cease operations, or have no realistic alternative but to do so.

Our responsibility

Our responsibility is to express to the Entity a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.

Our conclusion, including our conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion section of this report.

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the Entity in accordance with the terms of our engagement to assist the Entity in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the Entity those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Entity for our review work, for this report, or for the conclusions we have reached.

 

KPMG                                                                                                             Sep 3 2024

Chartered Accountants

1 Harbourmaster place,

IFSC,

Dublin 1,

Ireland.

 

 

 

 

 

 

GULF MARINE SERVICES PLC

Condensed Consolidated Statement of Comprehensive Income

for the period ended 30 June 2024

 

		Six months period ended 30 June
		2024		2023
		US$'000		US$'000
	Notes	(Unaudited)		(Unaudited)
Revenue	4,8	80,718		74,285
Cost of sales		(41,667)		(38,954)
Expected credit losses - net of recoveries	4	(211)		(548)
Gross profit		38,840		34,783
General and administrative expenses		(9,043)		(6,098)
Operating profit		29,797		28,685
Finance income		83		74
Finance expenses	9	(12,300)		(17,535)
Impact of change in fair value of derivative	17	(7,460)		(652)
Foreign exchange loss, net		(263)		(617)
Other income		10		12
Profit for the period before taxation		9,867		9,967
Taxation charge for the period	6	(2,499)		(1,256)
Profit for the period		7,368		8,711
Other comprehensive income - items that may be reclassified to profit or loss:
Net hedging gain reclassified to the profit or loss		-		279
Exchange differences on translating foreign operations		(44)		305
Total comprehensive income for the period		7,324		9,295
Profit attributable to:
Owners of the Company		7,023		8,336
Non-controlling interest		345		375
		7,368		8,711
Total comprehensive income attributable to:
Owners of the Company		6,979		8,920
Non-controlling interest		345		375
		7,324		9,295
Earnings per share
Basic (cents per share)	7	0.68		0.82
Diluted (cents per share)	7	0.63		0.82

 

All results are derived from continuing operations in each period. There are no discontinued operations in either period.

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

 

 

 

 

 

 

GULF MARINE SERVICES PLC

Condensed Consolidated Statement of Financial Position

as at 30 June 2024

 

		30 June		31 December
		2024		2023
		US$'000		US$'000
	Notes	(Unaudited)		(Audited)
ASSETS
Non-current assets
Property and equipment	10	594,630		606,412
Dry docking expenditure	11	13,751		11,204
Right-of-use assets		6,334		3,347
Total non-current assets		614,715		620,963
Current assets
Trade receivables	12	30,442		30,646
Prepayments, advances and other receivables	13	11,949		8,057
Cash and cash equivalents		7,440		8,666
Total current assets		49,831		47,369
Total assets		664,546		668,332
EQUITY AND LIABILITIES
Capital and reserves
Share capital - Ordinary	14	31,472		30,117
Capital redemption reserve	15	46,445		46,445
Share premium account	13	111,995		99,105
Group restructuring reserve		(49,710)		(49,710)
Restricted reserve		272		272
Capital contribution		9,177		9,177
Translation reserve		(2,586)		(2,542)
Retained earnings		201,726		194,703
Attributable to the Owners of the Company		348,791		327,567
Non-controlling interest		3,059		2,714
Total equity		351,850		330,281
Current liabilities
Trade and other payables		38,352		35,054
Current tax liability		8,173		7,032
Bank borrowings - scheduled repayments within one year	16	245,939		41,500
Lease liabilities		2,670		1,623
Derivative financial instruments	17	11,304		14,275
Total current liabilities		306,438		99,484
Non-current liabilities
Provision for employees' end of service benefits		2,407		2,395
Bank borrowings - scheduled repayments more than one year	16	-		234,439
Lease liabilities		3,851		1,733
Total non-current liabilities		6,258		238,567
Total liabilities		312,696		338,051
Total equity and liabilities		664,546		668,332

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

 

GULF MARINE SERVICES PLC

Condensed Consolidated Statement of Changes in Equity

for the period ended 30 June 2024

	Share capital - Ordinary	Capital redemption Reserve	Share premium account	Group restructuring reserve	Restricted reserve	Share based payment reserve	Capital contribution	Cash flow hedge reserve	Translation Reserve	Retained earnings	Attributable to the owners of the Company	Non-      controlling interest	Total equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'0-00	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
As at 1 January 2024	30,117	46,445	99,105	(49,710)	272	-	9,177	-	(2,542)	194,703	327,567	2,714	330,281
Profit for the period	-	-	-	-	-	-	-	-	-	7,023	7,023	345	7,368
Other comprehensive income for the period
Exchange differences on foreign operations	-	-	-	-	-	-	-	-	(44)	-	(44)	-	(44)
Total comprehensive income for the period	-	-	-	-	-	-	-	-	(44)	7,023	6,979	345	7,324
Transactions with owners of the Company
Issue of share capital	1,355	-	12,973*	-	-	-	-	-	-	-	14,328	-	14,328
Share issuance cost	-	-	(83)	-	-	-	-	-	-	-	(83)	-	(83)
Total transactions with owners of the Company	1,355	-	12,890	-	-	-	-	-	-	-	14,245	-	14,245
As at 30 June 2024	31,472	46,445	111,995	(49,710)	272	-	9,177	-	(2,586)	201,726	348,791	3,059	351,850
As at 1 January 2023	30,117	46,445	99,105	(49,710)	272	3,632	9,177	(279)	(2,885)	149,712	285,586	1,988	287,574
Profit for the period	-	-	-	-	-	-	-	-	-	8,336	8,336	375	8,711
Other comprehensive income for the period
Net hedging gain on interest hedges reclassified to the profit or loss	-	-	-	-	-	-	-	279	-	-	279	-	279
Exchange differences on foreign operations	-	-	-	-	-	-	-	-	305	-	305	-	305
Total comprehensive income for the period	-	-	-	-	-	-	-	279	305	8,336	8,920	375	9,295
Transactions with owners of the Company
Share based payment charge	-	-	-	-	-	14	-	-	-		14	-	14
Transfer of share option reserve	-	-	-	-	-	(3,646)	-	-	-	3,646	-	-	-
Total transactions with owners of the Company	-	-	-	-	-	(3,632)	-	-	-	3,646	14	-	14
As at 30 June 2023	30,117	46,445	99,105	(49,710)	272	-	9,177	-	(2,580)	161,694	294,520	2,363	296,883

 

*Addition to share premium amount reflects cash proceeds US$ 2.5m and release of warrants liability of US$ 10.4m upon exercise of warrants.

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.