TIDMGMS
RNS Number : 5245A
Gulf Marine Services PLC
26 September 2022
26 September 2022
Gulf Marine Services PLC
('Gulf Marine Services', 'GMS', 'the Company' or 'the
Group')
Interim results for the six months ended 30 June 2022
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 ended 30 June 2022 (H1 2022) .
Overview
H1 2022 H1 2021
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US$ m US$ m
======== =======
Revenue 66.4 51.4
======== =======
Gross profit 27.4 16.4
======== =======
EBITDA(1) 37.3 26.5
======== =======
Profit for the period after tax 13.1 2.0
======== =======
H1 Highlights
-- EBITDA guidance for 2022 remains at US$ 70 - 80 million
o forecasted utilisation of 86% for H2 which supports the 2022
EBITDA guidance
-- H1 2022 revenue increased by 29% to US$ 66.4 million (H1 2021: US$ 51.4 million), driven by
o increased utilisation for H1 2022 to 89% (H1 2021: 77%) with
notable improvements in E-Class vessels at 87% (H1 2021: 57%)
o increased H1 2022 average day rates to $27.2k (H1 2021: US$
25.5k)
-- H1 2022 EBITDA increased to US$ 37.3 million (H1 2021: US$
26.5 million) due to an increase in revenue and a continued focus
on costs savings
-- H1 2022 Net profit after tax was US$ 13.1 million (H1 2021
US$ 2.0 million) mainly driven by an increase in revenue. Gross
profit margin improved to 41% (H1 2021: 32%)
-- Net debt(1) reduced by US$ 29.9 million to US$ 341.4 million
(31 December 2021: US$ 371.3 million) as the Group continues its
focus on deleveraging
Outlook
-- As demand in the market continues to grow, the Group
anticipates improvements in day rates and utilisation, albeit at a
slower pace than originally envisaged
-- Secured backlog was US$ 163.3 million at 30 June 2022 (30
June 2021: US$ 215.4 million), which reflects the unwinding of long
term contracts commenced prior to 2021 and partially offset by
additional contract awards announced over the last 12 months
-- Contract awards announced in H1 2022 have a combined total
charter period of 2.6 years (H1 2021: 3.4 years), the Group is
currently working on new potential contracts to improve the
backlog
(1) This represents an Adjusted Performance Measure (APM) as
defined in the Glossary which is included in Note 23 to the interim
consolidated Financial Statements.
Mansour Al Alami, Executive Chairman, GMS said:
"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."
Alex Aclimandos
Chief Financial Officer
Gulf Marine Services PLC
23 September 2022
Enquiries:
Gulf Marine Services PLC Tel: +44 (0)20 7603
Mansour Al Alami 1515
Executive Chairman
Celicourt Communications Tel: +44 (0) 208
Mark Antelme 434 2643
Philip Dennis
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 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 GMS fleet of 13 SESVs is amongst the youngest in the
industry, with an average age of eleven years. 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.
Chairman's Review
Group performance
Revenue for the period increased to US$ 66.4 million (H1 2021:
US$ 51.4 million), mainly driven by an increase in day rates to US$
27.2k (H1 2021: US$ 25.5k) and by an increase in utilisation to 89%
(H1 2021: 77%).
Vessel operating expenses increased to US$ 23.5 million (H1
2021: US$ 20.2 million), driven by an increase in rechargeable
expenses relating to catering services coupled with increased
utilisation during the period. General and administrative expenses
also increased to US$ 5.8 million (H1 2021:US$ 4.9 million),
reflecting higher professional fees, and other one-time
expenses.
H1 2022 EBITDA stood at US$ 37.3 million (H1 2021: US$ 26.5
million), which was driven by an increase in utilisation, improved
day rates and continuous focus on cost savings.
During H1 2022, two new contract awards were announced by to the
Group for K-Class vessels, where average day rates were 32% higher
than their previous contracts.
GMS reported a profit after tax during H1 2022 of US$ 13.1
million (H1 2021: US$ 2.0 million). This is mainly a result of the
increased EBIDTA coupled with reduced finance expenses.
Capital structure and liquidity
The net leverage ratio has reduced to 4.56 times (31 December
2021: 5.79 times) due to a reduction in the net debt to US$ 341.4
million (31 December 2021: US$ 371.3 million) combined with
improved EBITDA. The Group remains dedicated to its deleveraging
journey.
As described in the 2021 annual report, the Group's current bank
terms are to raise US$ 50 million equity before the end of the year
or, if failing to do so, to issue of 87.6 million warrants giving
potential rights to 134 million shares at a specific price if
exercised. The position as at 30 June 2022 remains the same as that
described in the 2021 annual report and neither of the two
contractual scenarios have been ruled out. The Board considers the
likelihood of issuance of warrants to be more likely than not.
Outlook
The Group anticipates seeing continued improvements in day rate
and utilisation levels however this is expected to be more gradual
over time. Secured backlog is US$ 163.3 million as at 30 June
2022
(30 June 2021: US$ 215.4 million). The Group is currently
working on a number of projects that will have a favourable impact
on its backlog.
We are pleased to be able to reconfirm our 2022 EBITDA guidance
of US$ 70-80 million.
Mansour Al Alami
Executive Chairman
23 September 2022
Financial Review
H1 2022 H1 2021
======== =======
US$ m US$ m
======== =======
Revenue 66.4 51.4
======== =======
Gross profit 27.4 16.4
======== =======
EBITDA(1) 37.3 26.5
======== =======
Profit for the period after tax 13.1 2.0
======== =======
Summary
Revenue increased to US$ 66.4 million, (H1 2021: US$ 51.4
million), mainly driven by an increase in both utilisation and
average day rates.
EBITDA increased by 41% to US$ 37.3 million, (H1 2021: US$ 26.5
million), with the EBITDA margin increasing to 56% (H1 2021: 52%)
mainly driven by the increase in utilisation, day rates and a
continuous focus on costs savings.
Net profit has continued its positive trend, increasing to US$
13.1 million (H1 2021: US$ 2.0 million). This was mainly achieved
by the increased EBITDA and EBITDA margin partially offset by
increase in tax expense provision due to increased activity in
taxable jurisdictions.
Net debt(1) has reduced by US$ 29.9 million to US$ 341.4 million
(31 December 2021: US$ 371.3 million) as the Group continues
deleveraging.
Improved trading performance has translated to a significant
increase in cash generated for operating activities by 91% to US$
42.2 million (H1 2021: US$ 22.1 million).
(1) This represents an Adjusted Performance Measure (APM) as
defined in the Glossary which is included in Note 23 to the interim
consolidated Financial Statements
Revenue and segmental profit
The table below shows the contribution to revenue and segment
gross profit made by each vessel class during the period .
Revenue Segmental gross profit
---------------- ------------------------
(US$'000) H2 2022 H1 2021 H2 2022 H1 2021
Vessel Class
E-Class vessels 26,751 15,000 17,355 8,736
S-Class vessels 17,037 16,168 11,890 10,634
K-Class vessels 22,609 20,225 13,708 11,822
Total 66,397 51,393 42,953 31,192
---------------- ------- ------- ----------- -----------
Revenue in H1 2022 increased by 29% to US$ 66.4 million (H1
2021: US$ 51.4 million) following an increase in overall
utilisation to 89% (H1 2021: 77%). Utilisation increased across all
three vessel classes with a notable increase in E-Class vessels
achieving 87% in the period (H1 2021: 57%). Both K- and S- Class
vessels utilisation also increased to 85% and 99% respectively (H1
2021: 82% and 95% respectively). S-Class utilisation increased to
99% (H1 2021: 95%) as a result of certain vessels being off hire in
H1 2021 for drydocking activities.
K-Class utilisation marginally increased to 85% (H1 2021: 82%)
due to off-hire time for scheduled maintenance in H1 2021.
Average charter day rates also saw an increase by 7% in the
period to US$ 27.2k (H1 2021: US$ 25.5k). This increase is mainly
driven by a mix factor resulting from more expensive vessels having
higher utilization and as such weighing more on the average.
Cost of sales and general and administrative expenses
Cost of sales increased by US$ 4.0 million to US$ 39.0 million
(H1 2021: US$ 35 million) which reflected an increase in
rechargeable expenses relating to catering services as well as a
higher utilisation in H1 2022.
General and Administration expenses increased by 18% to US$ 5.8
million (H1 2021: US$ 4.9 million) reflecting higher professional
fees, and other one-time expenses.
Other costs
Finance expenses in the period were US$ 7.3 million (H1 2021:
US$ 8.0 million). Interest costs on borrowings reduced to US$ 6.8
million (H1 2021 US$ 11.4 million), mainly as a result of the
refinancing in H1 2021 which impacted the Group's effective
interest rate. Higher interest cost in the comparative period was
partially offset with a net gain of US$ 3.1 million on revision of
debt facility, comprising of a fair value gain of US$ 6.3 million
offset by the costs to acquire the new loan facility which amounted
to US$ 3.2 million.
A net foreign exchange gain of US$ 0.2 million in H1 2022 (H1
2021: loss of US$ 0.7 million) arose from favourable movements in
exchange rates of the Pound Sterling against the US Dollar.
Tax expense increased to US$ 1.5 million (H1 2021: US$ 0.9
million) mainly due to an increase in activity in taxable
jurisdictions combined with a higher withholding tax charge.
Cash flow and liquidity
The Group's net cash generated from operating activities
increased to US$ 42.2 million (H1 2021: US$ 22.1 million) which
reflected a strong operational performance during the period. The
net cash outflow from investing activities for H1 2022 decreased to
US$ 3.7 million (H1 2021: US$ 8.9 million) representing a higher
capital expenditure incurred in 2021 to upgrade the vessels
entering new contracts.
The Group's net cash outflow from financing activities during
the period increased to US$ 36.7 million
(H1 2021: US$ 7.8 million). The Group made debt repayments of
US$ 28 million (H1 2021: US$ 24.5 million) which was comprised of
US$ 15 million payments towards the working capital facility and
US$ 13 million towards its term loans. The comparative period
reflected cash inflows of US$ 27.8 million in relation to proceeds
from the issuance of shares, which was partially offset by share
issue and refinancing costs totalling US$ 4.6 million.
Balance sheet
Total current assets at 30 June 2022 were US$ 53.6 million (31
December 2021: US$ 57.1 million). The decline reflects a better
management of trade receivable balance resulting in reduction of
US$ 6.6 million, which is partially offset by payments made towards
our long-term debt and an increase to cash and cash equivalents of
US$ 1.8 million. Total current liabilities increased to US$ 59.3
million (31 December 2021: US$ 53.0 million) primarily as a result
of an increase in accrued operational expenses through increased
utilisation. Further, the Group's embedded derivative of US$ 1.4
was reclassified to current liabilities as warrants are expected to
be issued on 2 January 2023. While the current assets are lower
than current liabilities, the group expects to honour all its
liabilities. For further details please refer to the Going Concern
disclosure within Note 2 of the interim condensed consolidated
financial statements.
Total non-current assets at 30 June 2022 were US$ 607.1 million
(31 December 2021: US$ 617.2 million). The decline is due to
depreciation and amortisation charged on non-current assets of US$
15.8 million. This was offset by capital expenditure of US$ 5.5
million for class surveys and upgrades to the vessels. Total
non-current liabilities reduced to US$ 326.4 million (31 December
2021: US$ 358.7 million) primarily due to the repayment of
US$ 28 million (H1 2021: US$ 24.5 million) towards bank
borrowings.
During H1 2022, the shareholders approved an agreement to buy
back and cancel all the 350,487,787 Deferred shares that had arisen
from the capital reorganization in 2021, for the aggregate
consideration of GBP1.
On 30 June 2022, the buyback was completed, and the shares were
subsequently cancelled. Following the cancellation of the Deferred
shares, a transfer of $46.4 million was made from Share capital -
Deferred to a Capital redemption reserve within the equity section
of the statement of financial position.
Total equity increased to US$ 275 million (31 December 2021: US$
262.7 million), largely attributable to a movement in retained
earnings during the period.
Going concern
Management have assessed the Group's financial position for a
period of not less than 12 months from the date of approval of the
half year results and have a reasonable expectation that the Group
will be able to continue in operational existence for the
foreseeable future.
The Group's forecasts, having taken into consideration
reasonable risks and downsides, indicate that its bank facilities
along with order book of contracted work and a strong pipeline of
near-term opportunities for additional work will provide sufficient
liquidity for its requirements for the foreseeable future and the
Group will remain in compliance with the covenants under the
Group's banking facilities throughout the period until the end of
September 2023. Accordingly, these consolidated interim financial
statements for the Group have been prepared on a going concern
basis. For further details please refer to the Going Concern
disclosure within Note 2 of the interim condensed consolidated
financial statements.
Related party transactions
During the period there were related party transactions with the
minority shareholder of GMS Saudi Arabia Ltd, a subsidiary of the
Group for the provision of safety equipment on some of our vessels
and office space totalling US$ 0.3 million (H1 2021: US$ 0.3
million) and with National Catering Company Limited WLL, an
affiliate of a significant shareholder of the Company, for Catering
services totalling US$ 0.3 million (H1 2021: Nil).
Risks and uncertainties
There are a number of risks and uncertainties which could have a
material impact on the Group's performance over the remaining six
months of 2022. The Directors do not consider that the principal
risks and uncertainties have materially changed since the last
publication of the Annual Report for the year ended 31 December
2021. A detailed explanation of the risks summarised below, and how
the Group seeks to mitigate the risks, can be found on pages 28 to
33 of the 2021 annual report which is available at www.gmsuae.com
.
-- Utilisation and Local content requirement - The Group relies
on a limited number of blue-chip clients that may expose it to
losses if these relationships breakdown. Middle East and North
Africa (MENA) NOCs have introduced local content requirements as
part of their tender processes designed to giving preference to
suppliers that commit to improving their local content and levels
of spend which may prevent GMS from winning contracts or lead to
financial loss and/or a reduction in margins on existing contracts,
which will ultimately impact cash flows and profitability.
-- Inability to secure an appropriate capital structure - A
continuing low share price may prevent GMS from raising sufficient
levels of equity to recapitalise the business.
-- Operations: inability to deliver safe and reliable operations
- The Group may suffer commercial and reputational damage from an
environmental or safety incident involving employees, visitors or
contractors. Inadequate preparation for emergency situations, such
as pandemics or geopolitical instability, could have a negative
impact on the business. Insufficient insurance coverage may lead to
financial loss.
-- Liquidity and covenant compliance - The business is exposed
to short-term liquidity management risks arising from potential
increases in interest rates, which further increase debt service
obligations, and unexpected increases in working capital. In
addition, the Group's bank facilities are subject to covenant tests
based on the financial performance. Compliance with these covenants
depends on GMS' ability to secure ongoing work for the fleet. If
GMS is unable to secure ongoing work, its financial performance and
position may be adversely affected, and it may not comply with the
covenants. In such a case, unless the banks agree otherwise, this
could lead to an event of default. This would give lenders the
right to accelerate repayment of the outstanding loans, and then
exercise security over the Group's assets.
-- People - Losing skilled workforce or failing to attract new
talent into our business has the potential to undermine
performance.
-- Legal, economic and political conditions - Political
instability in the regions in which GMS operates (and recruit from)
may adversely affect its operations. The business is exposed to
sudden changes in tax compliance requirements or changes in
legislation which could lead to fines, financial loss or adversely
impact liquidity. Sudden changes in inflation in regions GMS
operates may adversely affect its operations.
-- Compliance and Regulation - Failure to appropriately identify
and comply with laws and regulations, and other regulatory statutes
in new and existing markets, could lead to regulatory
investigations. It may result in GMS failing to win a new contract,
the early termination of an existing contract or exclusion from
future contracts.
-- COVID-19 pandemic - Although the impact of the COVID-19
pandemic appears to be subsiding, it may still pose a number of
operational challenges to the Group such as increased cost due to
strict quarantine requirements for crew, health risk to staff and
delay in existing or future contracts as a result of interruptions
in their supply chains.
-- Cyber-crime - security and integrity - 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 - Climate change poses both transition and
physical risks to the Group. Transition risks come from the
decarbonisation of the global economy which could result in
changing investor sentiment making new investors harder to find. It
may bring changing client preferences leading to reduced demand for
our services. New legislation could require us to increase
reporting and possibly substitute our products and vessels for
greener alternatives. Physical risks include rising temperatures,
which could further impact working hours, and rising sea levels,
which could affect where our vessels can operate.
RESPONSIBILITY STATEMENT
Financial information for the period ended 30 June 2022.
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 Alex Aclimandos
Executive Chairman Chief Financial Officer
23 September 2022 23 September 2022
INDEPENT 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 2022
which comprises the condensed consolidated statement of
comprehensive income, the condensed consolidated balance sheet, the
condensed consolidated statement of changes in equity, the
condensed consolidated statement of cash flows, a summary of
significant 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 2022 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.
INDEPENT REVIEW REPORT TO GULF MARINE SERVICES PLC (THE
"ENTITY") (continued)
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 3, the annual financial statements of the
Entity for the year ended 31 December 2021 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 23 September 2022
Chartered Accountants
1 Harbourmaster Place,
IFSC,
Dublin 1,
Ireland.
GULF MARINE SERVICES PLC
C ondensed Consolidated Statement of Comprehensive Income
for the period ended 30 June 2022
Six months period ended Year ended
30 June 31 December
---------------------------
2022 2021 2021
US$'000 US$'000 US$'000
Notes (Unaudited) (Unaudited) (Audited)
Revenue 3,7 66,397 51,393 115,127
Cost of sales (39,021) (35,007) (69,460)
Reversal of impairment 9 - - 14,959
Gross profit 27,376 16,386 60,626
General and administrative
expenses (5,819) (4,883) (12,272)
Operating profit 21,557 11,503 48,354
Finance income 8 6 9
Finance expenses 8 (7,290) (7,986) (14,463)
Foreign exchange gain/(loss),
net 240 (698) (1,002)
Other income 66 20 28
Profit for the period/year
before taxation 14,581 2,845 32,926
Taxation charge for
the period/year 5 (1,471) (851) (1,707)
------------- ------------ -------------
Profit for the period/year 13,110 1,994 31,219
============= ============ =============
Other comprehensive
income/(expense) - items
that may be reclassified
to profit or loss:
Net hedging gain reclassified
to the profit or loss 140 139 278
Exchange differences
on translating foreign
operations (1,031) 89 (91)
Total comprehensive
income for the year 12,219 2,222 31,406
------------- ------------ -------------
Profit attributable
to:
Owners of the Company 13,097 1,882 31,001
Non-controlling interests 13 112 218
------------- ------------ -------------
13,110 1,994 31,219
Total comprehensive
income attributable
to:
Owners of the Company 12,206 2,110 31,188
Non-controlling interests 13 112 218
------------- ------------ -------------
12,219 2,222 31,406
------------- ------------ -------------
Earnings per share
Basic (cents per share) 6 1.29 0.52 4.48
------------- ------------ -------------
Diluted (cents per share) 6 1.28 0.51 4.46
------------- ------------ -------------
All results are derived from continuing operations in each
period/year. There are no discontinued operations in either
period/year.
The accompanying notes form an integral part of these condensed
consolidated financial statements.
GULF MARINE SERVICES PLC
Condensed Consolidated Balance Sheet
as at 30 June 2022
30 June 31 December
Notes 2022 2021
US$'000 US$'000
ASSETS
Non-current assets
Property and equipment 9 595,704 605,526
Dry docking expenditure 10 9,526 8,799
Right-of-use assets 1,824 2,884
Total non-current assets 607,054 617,209
Current assets
Trade receivables 11 35,440 41,948
Prepayments, advances and other
receivables 12 8,012 6,969
Derivative financial instruments 16 70 -
Cash and cash equivalents 10,057 8,271
Total current assets 53,579 57,188
Total assets 660,633 674,397
========= ============
EQUITY AND LIABILITIES
Capital and reserves
Share capital - Ordinary 13 30,117 30,117
Share capital - Deferred 13 - 46,445
Capital redemption reserve 14 46,445 -
Share premium account 99,105 99,105
Group restructuring reserve (49,710) (49,710)
Restricted reserve 272 272
Share based payment reserve 3,691 3,648
Capital contribution 9,177 9,177
Cash flow hedge reserve (418) (558)
Translation reserve (3,117) (2,086)
Retained earnings 137,483 124,386
--------- ------------
Attributable to the Owners of the
Company 273,045 260,796
Non-controlling interests 1,925 1,912
Total equity 274,970 262,708
--------- ------------
Current liabilities
Trade and other payables 22,008 19,455
Current tax liability 6,701 5,669
Bank borrowings 15 28,048 26,097
Lease liabilities 1,126 1,817
Derivative financial instruments 16 1,384 -
--------- ------------
Total current liabilities 59,267 53,038
--------- ------------
Non-current liabilities
Provision for employees' end of
service benefits 2,251 2,322
Bank borrowings 15 323,429 353,429
Lease liabilities 716 1,107
Derivative financial instruments 16 - 1,793
Total non-current liabilities 326,396 358,651
--------- ------------
Total liabilities 385,663 411,689
Total equity and liabilities 660,633 674,397
--------- ------------
The accompanying notes form an integral part of these condensed
consolidated financial statements.
GULF MARINE SERVICES PLC
Condensed Consolidated Statement of Changes in Equity
Share Cash Attributable
For the period Share Share Capital Share Group based flow to the Non-
ended 30 June capital - capital - redemption premium restructuring Restricted payment Capital hedge Translation Retained owners of controlling Total
2022 Ordinary Deferred Reserve account reserve reserve reserve contribution reserve reserve earnings the Company interests equity
US$'000 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
2022 30,117 46,445 - 99,105 (49,710) 272 3,648 9,177 (558) (2,086) 124,386 260,796 1,912 262,708
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
Profit for the
period - - - - - - - - - - 13,097 13,097 13 13,110
Other
comprehensive
income for the
period
Net hedging
gain on
interest
hedges
reclassified
to the profit
or loss - - - - - - - - 140 - - 140 - 140
Exchange
differences on
foreign
operations - - - - - - - - - (1,031) - (1,031) - (1,031)
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
Total
comprehensive
income for the
period - - - - - - - - 140 (1,031) 13,097 12,206 13 12,219
Transactions
with owners of
the Company
Share based
payment charge - - - - - - 43 - - - - 43 - 43
Buyback and
cancellation
of deferred
shares (Note
13, 14) - (46,445) 46,445 - - - - - - - - - - -
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
Total
transactions
with owners of
the Company - (46,445) 46,445 - - - 43 - - - - 43 - 43
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
As at 30 June
2022 30,117 - 46,445 99,105 (49,710) 272 3,691 9,177 (418) (3,117) 137,483 273,045 1,925 274,970
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
As at 1 January
2021 58,057 - - 93,080 (49,710) 272 3,740 9,177 (836) (1,995) 93,385 205,170 1,694 206,864
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
Profit for the
period - - - - - - - - - - 1,882 1,882 112 1,994
Other
comprehensive
income for the
period
Net hedging
gain on
interest
hedges
reclassified
to the profit
or loss - - - - - - - - 139 - - 139 - 139
Exchange
differences on
foreign
operations - - - - - - - - - 89 - 89 - 89
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
Total
comprehensive
income for the
period - - - - - - - - 139 89 1,882 2,110 112 2,222
Transactions
with owners of
the Company
Capital
reorganisation
(Note 13) (46,445) 46,445 - - - - - - - - - - - -
Issue of share
capital (Note
13) 18,505 - - 9,253 - - - - - - - 27,758 - 27,758
Share issue
costs (Note
13) - - - (3,228) - - - - - - - (3,228) - (3,228)
Share based
payment charge - - - - - - (53) - - - - (53) - (53)
Cash settlement
of Long-Term
Incentive
Plans (LTIPs) - - - - - - (74) - - - - (74) - (74)
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
Total
transactions
with owners of
the Company (27,940) 46,445 - 6,025 - - (127) - - - - 24,403 - 24,403
As at 30 June
2021 30,117 46,445 - 99,105 (49,710) 272 3,613 9,177 (697) (1,906) 95,267 231,683 1,806 233,489
----------- ----------- ------------ -------- -------------- ------------ --------- ------------- -------- ------------ ---------- ------------- ------------- ----------
The accompanying notes form an integral part of these condensed
consolidated financial statements.
--
GULF MARINE SERVICES PLC
Condensed Consolidated Statement of Cash Flows
for the period ended 30 June 2022
Year ended
Six-month period ended 31 December
30 June
--------------------------
2022 2021 2021
US$'000 US$'000 US$'000
Net cash generated from operating
activities (Note 17) 42,205 22,114 40,511
Investing activities
Payments for additions of property
and equipment (1,885) (6,130) (7,898)
Dry docking expenditure paid (1,831) (2,740) (3,609)
Interest received 8 6 9
Net cash used in investing activities (3,708) (8,864) (11,498)
Financing activities
Bank borrowings received - 2,000 2,000
Repayment of bank borrowings (28,049) (24,492) (30,983)
Proceeds from issue of shares (Note
13) - 27,758 27,758
Share issue costs paid (Note 13) - (1,431) (3,228)
Principal elements of lease payments (1,174) (1,087) (2,342)
Cash settlement of LTIPs - (74) -
Payment of costs associated with
borrowings (148) (3,170) (3,615)
Settlement of derivatives (Note
16) (369) (537) (1,033)
Interest paid (6,971) (6,752) (13,097)
Net cash used in financing activities (36,711) (7,785) (24,540)
Net increase in cash and cash
equivalents 1,786 5,465 4,473
Cash and cash equivalents at the
beginning of the period/year 8,271 3,798 3,798
Cash and cash equivalents at the
end of the period/year 10,057 9,263 8,271
Non-cash transactions
Recognition of deferred shares - 46,445 46,445
Transfer of deferred shares to
capital redemption reserve 46,445 - -
Recognition of right-of-use asset 92 419 1,955
Net movement for capital accruals
in relation to additions of property
and equipment 136 11 408
Net movement of drydock accruals 1,664 426 302
The accompanying notes form an integral part of these condensed
consolidated financial statements.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022
1 Corporate information
Gulf Marine Services PLC ("GMS" or the "Company") is a Company
which is registered and was incorporated in England and Wales on 24
January 2014. The Company is a public limited liability company
with operations mainly in the Middle East, North Africa and Europe.
The address of the registered office of the Company is 107
Hammersmith Road, London, W14 0QH. The registered number of the
Company is 08860816.
The principal activities of GMS and its subsidiaries (together
referred to as the "Group") are chartering and operating a fleet of
specially designed and built vessels. All information in the notes
relate to the Group, not the Company unless otherwise stated.
The Group is engaged in providing self-propelled, self-elevating
support vessels (SESVs) that present a stable platform for delivery
of a wide range of services throughout the total lifecycle of
offshore oil, gas and renewable energy activities, and which are
capable of operations in the Middle East and other regions.
The condensed consolidated financial statements of the Group for
the six-month period ended
30 June 2022 were authorised for issue on 23 September 2022. The
condensed consolidated financial statements do not comprise
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The condensed consolidated financial statements
have been reviewed, not audited.
The Group issued statutory financial statements for the year
ended 31 December 2021, which were prepared in accordance with UK
adopted International Accounting Standards in conformity with
requirements of the Companies Act 2006. Those financial statements
were approved by the Board of Directors on 12 May 2022. The report
of the auditor on those accounts did not contain any statement
under section 498(2) or 498(3) of the Companies Act 2006. The
information for the year to 31 December 2021 contained in these
condensed consolidated accounts has been extracted from the latest
published audited financial statements. A copy of the statutory
accounts for year ended
31 December 2021 has been delivered to the Registrar of
Companies.
2 Significant accounting policies
The accounting policies and methods of computation adopted in
the preparation of these condensed consolidated financial
statements are consistent with those followed in the preparation of
the Group's annual financial statements for the year ended 31
December 2021 as disclosed in the Annual Report, except for the
adoption of new standards and interpretations effective as of 1
January 2022, which are described in more details below.
The condensed consolidated financial statements have been
prepared on the historical cost basis, except for certain financial
instruments that are measured at fair values at the end of each
reporting period. The Group's management considers that the fair
value of financial assets, financial liabilities and lease
liabilities approximates their carrying amounts.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
2 Significant accounting policies (continued)
Basis of preparation
The annual consolidated financial statements of the Group will
be prepared in accordance with
UK adopted International Accounting Standards in conformity with
requirements of the Companies Act 2006. The interim set of
condensed consolidated financial statements included in this
half-yearly financial report has been prepared in accordance with
the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority and with International Accounting Standard (IAS)
34 Interim Financial Reporting as adopted by the United
Kingdom.
The condensed consolidated financial statements do not include
all the information required for full annual consolidated financial
statements and should be read in conjunction with the Group's
audited consolidated financial statements for the year ended 31
December 2021. In addition, results for the six-month period ended
30 June 2022 are not necessarily indicative of the results that may
be expected for the financial year ending 31 December 2022. The
condensed consolidated statement of comprehensive income for the
six-month period ended 30 June 2022 is not affected significantly
by seasonality of results.
Going concern
The Group's Directors have assessed the Group's financial
position for a period of not less than
12 months from the date of approval of the half year results and
have a reasonable expectation that the Group will be able to
continue in operational existence for the foreseeable future.
The Group was in a net current liability position as at 30 June
2022 amounting to US$ 5.7 million
(31 December 2021: net current assets of US$ 4.2 million). The
Group has US$ 10.1 million of available resources comprising cash
and cash equivalents and it has an available undrawn working
capital facility of US$ 13.5 million (31 December 2021: US$ 3.5
million) as at the at the reporting date.
The Group is expected to continue to generate positive operating
cash flows for the foreseeable future and has in place a committed
working capital facility of US$ 45.0 million (31 December 2021:US$
50.0 million), of which US$ 25.0 million (31 December 2021: US$
25.0 million) can be utilised to support the issuance of
performance bonds and guarantees, of which US$ 12.5 million (31
December 2021:
US$ 11.6 million) was utilised for this purpose as of 30 June
2022 (refer Note 18). The balance of
US$ 20 million can be utilised to draw down cash. During the
period, the working capital facility was reduced by US$ 5 million
under the terms of the facility agreement. US$ 6.5 million of this
facility was utilised as of 30 June 2022 (31 December 2021: US$
21.5 million), leaving US$ 13.5 million (31 December 2021: US$ 3.5
million) available for drawdown. The working capital facility
expires alongside the main debt facility in June 2025. (refer Note
15)
The Group's current bank terms are to raise US$ 50 million
equity before the end of the year or, if failing to do so, to issue
of 87.6 million warrants giving potential rights to 134 million
shares at a specific price if exercised. The position as at 30 June
2022 remains the same as that described in the 2021 annual report
and neither of the two contractual scenarios have been ruled out.
The Board considers the likelihood of issuance of warrants to be
more likely than not. If leverage is above 4.0x at
31 December 2022, PIK interest would accrue at a rate defined
within the Glossary. The Group's cashflow forecasts used for the
Going Concern assessment includes PIK interest for the first six
months of 2023.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
2 Significant accounting policies (continued)
Going concern (continued)
The Group's forecasts, having taken into consideration
reasonable risks and downsides, indicate that its bank facilities
along with order book of contracted work and a strong pipeline of
near-term opportunities for additional work will provide sufficient
liquidity for its requirements for the foreseeable future and the
Group will remain in compliance with the covenants under the
Group's banking facilities throughout the period until the end of
September 2023, Accordingly, these consolidated interim financial
statements for the Group have been prepared on a going concern
basis.
GMS continues to remain cognisant of the wider context in which
it operates and the impact that climate change could have on the
financial statements of the Group. The impact of climate change is
expected to be insignificant in the going concern assessment
period.
While the current situation regarding the war in Ukraine and
Russian sanctions remains uncertain, the Group believes that the
potential impact of the war, border closures and resulting
sanctions will not have a significant impact on its operations.
Nevertheless, the Group's core market is middle east which is
expected to invest heavily in shallow water production capacity
over the coming decade which will drive demand for offshore marine
services.
New and amended standards adopted by the Group
The following new and revised IFRSs have been adopted in these
condensed consolidated financial statements.
-- COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
-- Annual Improvements to IFRS Standards 2018-2020
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
-- Reference to the Conceptual Framework (Amendments to IFRS 3)
The application of these new and revised IFRSs has not had any
material impact on the amounts reported for the current and prior
periods and did not require any retrospective adjustments but may
affect the accounting for future transactions or arrangements. The
full revised accounting policies applicable from 1 January 2022
will be provided in the Group's annual financial statements for the
year ending 31 December 2022.
At the date of the condensed consolidated interim financial
statements, the following other standards, amendments and
Interpretations have not been effective and have not been early
adopted by the Group:
-- Classification of Liabilities as Current or Noncurrent - Amendments to IAS 1
-- IFRS 17 Insurance Contracts
-- Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
-- Definition of Accounting Estimate - Amendments to IAS 8
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
These new and amended standards are not expected to have a
significant impact on the Group's condensed consolidated interim
financial information.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
3 Segment reporting
The segment information provided to the chief operating decision
makers for the operating and reportable segments for the period
include the following:
Segment adjusted
Revenue gross profit/(loss)*
-------------------------------- --------------------------------
6 months ended 31 December 6 months ended 31
30 June 30 June December
------------------ ------------ -------------------- ----------
2022 2021 2021 2022 2021 2021
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
K-Class vessels 22,609 20,225 43,027 13,708 11,822 26,214
S-Class vessels 17,037 16,168 33,420 11,890 10,634 22,590
E-Class vessels 26,751 15,000 38,680 17,355 8,736 25,104
_______ _______ _______ _______ _______ _______
Total 66,397 51,393 115,127 42,953 31,192 73,908
_______ _______ _______ _______ _______ _______
Less:
Depreciation charged
to cost of sales (11,787) (11,306) (22,738)
Amortisation charged
to cost of sales (3,790) (3,500) (5,503)
Reversal of impairment
(refer Note 9) - - 14,959
_______ _______ _______
Gross profit 27,376 16,386 60,626
General and administrative
expenses (5,819) (4,883) (12,272)
Finance income 8 6 9
Finance expense (refer
Note 8) (7,290) (7,986) (14,463)
Foreign exchange gain/(loss),
net 240 (698) (1,002)
Other income 66 20 28
_______ _______ _______
Profit before taxation 14,581 2,845 32,926
*See Glossary.
Segment revenue reported above represents revenue generated from
external customers. There were no inter-segment sales in either of
the periods. Segment assets and liabilities, including
depreciation, amortisation and additions to non-current assets, are
not reported to the chief operating decision maker on a segmental
basis and, therefore, are not disclosed.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
4 Presentation of adjusted non-GAAP results
The following table provides a reconciliation between the
statutory and non-statutory financial results:
Six months ended 30 June Six months ended 30 June
2022 2021
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
Non-GAAP Items Total Non-GAAP items total
results (3) results (3)
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Revenue 66,397 - 66,397 51,393 - 51,393
Cost of sales
* Cost of sales before
depreciation,
amortisation and
impairment (23,444) - (23,444) (20,201) - (20,201)
----------- ---- ----------- ----------- ---------- -------------
Segmented Gross
profit 42,953 - 42,953 31,192 - 31,192
* Depreciation and amortisation (15,577) - (15,577) (14,806) - (14,806)
Gross profit 27,376 - 27,376 16,386 - 16,386
General and administrative
-Depreciation and
amortisation (186) - (186) (227) - (227)
* Other administrative costs (5,633) - (5,633) (4,656) - (4,656)
Operating profit 21,557 - 21,557 11,503 - 11,503
Finance income 8 - 8 6 - 6
Finance expense (7,290) - (7,290) (6,261) - (6,261)
Cost to acquire new
bank facility(1) - - - - (3,165) (3,165)
Fair value adjustment
on recognition of
new debt facility(2) - - - - 1,440 1,440
Other income 66 - 66 20 - 20
Foreign exchange
gain/(loss), net 240 - 240 (698) - (698)
----------- ---- ----------- ----------- ---------- -------------
Profit/(loss) before
taxation 14,581 - 14,581 4,570 (1,725) 2,845
Taxation charge (1,471) - (1,471) (851) - (851)
----------- ---- ----------- ----------- ---------- -------------
Net profit after
tax 13,110 - 13,110 3,719 (1,725) 1,994
Profit attributable
to
Owners of the Company 13,097 - 13,097 3,607 (1,725) 1,882
Non-controlling interests 13 - 13 112 - 112
Profit per share
(Basic) 1.29 - 1.29 1.00 (0.48) 0.52
Supplementary non-statutory
information
Operating profit 21,557 - 21,557 11,503 - 11,503
Add: Depreciation
and amortisation
charges 15,763 - 15,763 15,033 - 15,033
----------- ---- ----------- ----------- ---------- -------------
Non-GAAP EBITDA
(3) 37,320 - 37,320 26,536 - 26,536
----------- ---- ----------- ----------- ---------- -------------
(1) Costs incurred to arrange a new bank facility have been
added back to Profit/(loss) before taxation to arrive at adjusted
net profit(3) for the period ended 30 June 2021. This measure
provides additional information in assessing the Group's total
performance that management is more directly able to influence and
on a basis comparable from period to period.
(2) The fair value adjustment on recognition of the new loan has
been added back to loss before taxation to arrive at adjusted net
profit(3) for the period ended 30 June 2021. This measure provides
additional information in assessing the Group's total performance
that management is more directly able to influence and on a basis
comparable from period to period.
(3) Please see Glossary for definition.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
5 Taxation
Tax is calculated at the rates prevailing in the respective
jurisdictions in which the Group operates. The overall effective
rate is the weighted average of the expected taxes to be paid in
each jurisdiction. Income is subject to tax including withholding
tax on Revenue and Corporation tax on Profit for the year in each
taxable jurisdiction (being principally Qatar, the United Kingdom
and Saudi Arabia). The Group effective tax rate was 14.8% for the
period ended June 2022 (Six months ended June 2021: 9.13%).
The current tax charge of US$ 1.5 million (six-month period
ended June 2021: US$ 0.9 million) included withholding tax
amounting to US$ 0.9 million (six-month period ended June 2021: US$
0.6 million).
A subsidiary of the Group received a tax assessment from the
Saudi tax authorities (ZATCA) for an amount of US$ 7.3 million
related to the transfer pricing of our inter-group bareboat
agreement, for the period from 2017 to 2019. The Group has filed an
appeal with the Tax Violations and Dispute Resolution Committee
(TVDRC) against the assessment raised by ZATCA. The Directors have
considered the claim, including consideration of third-party tax
advice received. Noticing the claim retrospectively applied from
2010 in respect of a law which was issued in 2019, which applied a
"tested party" assessment different to that supported by our tax
advisors and using an approach which the Directors (supported by
its tax advisors) consider to be inconsistent with the principles
set out in the KSA transfer price guidelines, the Directors are
confident that the Group has complied with the relevant tax
legislation. On that basis, the Directors have not made a provision
for the current or any future potential assessments of a similar
nature.
6 Earnings per share
6 months ended 30 June 6 months ended 30 June Year ended
31 December
2022 2021 2021
Earnings for the purpose of calculating the
basic and diluted earnings per share being
profit
for the period attributable to Owners of the
Company (US$'000) 13,097 1,882 31,001
Earnings for the purpose of calculating the
adjusted basic and diluted profit per share
(US$'000)
(Note 4) 13,097 3,607 17,768
Weighted average number of shares ('000) 1,016,415 361,525 691,661
Weighted average diluted number of shares
('000) 1,019,646 366,064 695,753
Basic earnings per share (cents) 1.29 0.52 4.48
Diluted earnings per share (cents) 1.28 0.51 4.46
Adjusted earnings per share (cents) 1.29 1.00 2.57
Adjusted diluted earnings per share (cents) 1.28 0.99 2.55
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
6 Earnings per share (continued)
Basic earnings per share is calculated by dividing the earnings
attributable to equity holders of the Company for the period (as
disclosed in the condensed consolidated statement of comprehensive
income) by the weighted average number of ordinary shares in issue
during the period. For the comparative period/year, the deferred
shares were not included in any of the Earnings per share
calculations as they did not have a right to dividends.
Adjusted earnings per share is calculated on the same basis as
basic earnings but uses the adjusted profit attributable to equity
holders of the Company for the period (refer Note 4). The adjusted
earnings per share is presented as the Directors consider it
provides an additional indication of the underlying performance of
the Group.
Diluted earnings per share is calculated by dividing the
earnings attributable to owners of the Company for the period by
the weighted average number of ordinary shares in issue during the
period adjusted for the weighted average effect of LTIP's during
the period.
Adjusted diluted earnings per share is calculated on the same
basis but uses adjusted profit (refer Note 4) attributable to the
equity shareholders of the Company.
The following table shows a reconciliation between basic and
diluted average number of shares:
30 June 30 June 31 December
2021 2021
2022 000's 000's
000's
Weighted average basic number
of shares in issue 1,016,415 361,525 691,661
Weighted average effect of LTIP's 3,231 4,539 4,092
Weighted average diluted number
of shares in issue 1,019,646 366,064 695,753
----------------------------------- ---------- -------- ------------
The warrants are anti-dilutive thus not included in the
calculation.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
7 Revenue
30 June 30 June
2022 2021
US$'000 US$'000
Charter hire 34,433 29,309
Lease income 22,492 16,699
Messing and accommodation 6,705 3,418
Maintenance service 1,677 1,398
Mobilisation and demobilization 670 511
Sundry income 420 59
66,397 51,394
------------- ----------------
8 Finance expenses
30 June 30 June
2022 2021
US$'000 US$'000
Interest on bank borrowings 6,796 11,411
Interest on finance leases 51 77
Other finance expenses 413 334
Recognition of embedded derivative for
contract to issue warrants - 926
Derecognition of embedded derivative for
contract to issue warrants - (1,890)
Net loss on changes in fair value of embedded
derivative for contract to issue warrants
(Note 16) 667 256
Loss on derivatives reclassified through
profit and loss 140 139
Gain on revision of debt facility - (6,332)
Net gain on changes in fair value of interest
rate swap (Note 16) (777) (100)
Cost to acquire new bank facility - 3,165
7,290 7,986
------------- ----------------
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
9 Property and equipment
Vessel spares, fitting and
Vessels Capital work-in-progress other equipment Others Total
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
Balance as at 1 January 2022 896,871 5,042 60,234 1,967 964,114
Additions - 2,021 - - 2,021
Transfers 1,372 (1,655) - 283 -
Balance as at 30 June 2022 898,243 5,408 60,234 2,250 966,135
-------- ------------------------- ----------------------------- -------- --------
Accumulated Depreciation and
impairment
Balance at 1 January 2022 335,938 2,845 18,018 1,787 358,588
Depreciation expense 10,179 - 1,607 57 11,843
Balance as at 30 June 2022 346,117 2,845 19,625 1,844 370,431
-------- ------------------------- ----------------------------- -------- --------
Net Book Value as at 30 June
2022 552,126 2,563 40,609 406 595,704
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
9 Property and equipment (continued)
Vessel spares, fitting and
Vessels Capital work-in-progress other equipment Others Total
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
Balance as at 1 January 2021 890,012 3,927 59,902 1,967 955,808
Additions - 8,306 - - 8,306
Transfers 6,859 (7,191) 332 - -
Balance as at 31 December
2021 896,871 5,042 60,234 1,967 964,114
--------- ------------------------- ---------------------------- -------- ---------
Accumulated Depreciation and
impairment
Balance at 1 January 2021 331,405 2,845 14,774 1,707 350,731
Depreciation expense 19,492 - 3,244 80 22,816
Reversal of impairment (14,959) - - - (14,959)
Balance as at 31 December
2021 335,938 2,845 18,018 1,787 358,588
--------- ------------------------- ---------------------------- -------- ---------
Net Book Value as at 31
December 2021 560,933 2,197 42,216 180 605,526
--------- ------------------------- ---------------------------- -------- ---------
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
10 Dry docking expenditure
30 June 31 December
2022 2021
US$'000 US$'000
At 1 January 8,799 10,391
Expenditure incurred during the period/year 3,495 3,911
Amortised during the period/year (2,768) (5,503)
-------- ------------
9,526 8,799
-------- ------------
11 Trade receivables
30 June 31 December
2022 2021
US$'000 US$'000
Trade receivables 35,572 42,143
Less: Allowances for trade receivables (132) (195)
-------- ------------
35,440 41,948
-------- ------------
12 Prepayments, advances and other receivables
30 June 31 December
2022 2021
US$'000 US$'000
Prepayments 4,070 3,663
Advances to suppliers 2,211 808
Accrued revenue 1,325 1,170
Deposits 406 406
Other receivables - 922
8,012 6,969
-------- ------------
13 Share capital
Ordinary shares at GBP0.02 per share
Number of
ordinary shares
('000) US$'000
At 1 January 2022 1,016,415 30,117
As at 30 June 2022 1,016,415 30,117
----------------- --------
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
13 Share capital (continued)
Number of ordinary
shares
('000) US$'000
At 1 January 2021 350,488 58,057
Placing of new shares 665,927 18,505
Capital reorganisation - (46,445)
At 31 December 2021 1,016,415 30,117
------------------- ---------
As part of the equity raise on 28 June 2021 the Company issued
665,926,795 new ordinary shares with a nominal value of 2 pence per
share at 3 pence per share with the additional pence per share
being recognised in the
share premium account. As a result, total equity of
US$ 27.76 million (GBP GBP19.98 million) was raised of which
$18.51 million (GBP GBP13.32 million) was recognised in the share
capital account and $9.25 million (GBP GBP6.66 million) was
recognised in share premium account. Issue costs amounting to US$
3.2 million had been deducted from the share premium account.
Deferred shares at GBP0.08 per share
Number of
ordinary shares
('000) US$'000
At 1 January 2022 350,488 46,445
Buyback and cancellation of deferred
shares (350,488) (46,445)
At 30 June 2022 - -
----------------- ---------
Number of ordinary
shares
('000) US$'000
At 1 January 2021 - -
Capital reorganisation 350,488 46,445
At 31 December 2021 350,488 46,445
------------------- --------
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
13 Share capital (continued)
Prior to an equity raise on 28 June 2021 the Group underwent a
capital reorganisation where all existing ordinary shares with a
nominal value of 10 pence per share were subdivided and
re-designated into 1 ordinary share with a nominal value of 2 pence
and 1 deferred share with a nominal value of 8 pence each. The
previously recognised share capital balance relating to the old 10p
ordinary shares was allocated pro rata to the new subdivided 2p
ordinary shares and 8p deferred shares.
The deferred shares had no voting rights and no right to the
profits generated by the Group. On winding-up or other return of
capital, the holders of deferred shares had extremely limited
rights. The Group had the right but not the obligation to buyback
all of the Deferred Shares for an amount not exceeding GBP1.00 in
aggregate.
During the 2022 AGM, shareholders approved an agreement
describing the buyback and cancellation of the Deferred shares of
the Company pursuant to which, for the aggregate consideration of
GBP1.00, the Company purchased all of the deferred shares arising
from its 2021 capital reorganization. Under the Companies Act a
share buy -- back by a public company (such as the Company) can
only be financed through distributable reserves or the proceeds of
a fresh issue of shares made for the purpose of financing a share
buyback. The Company had sufficient reserves to purchase the
Deferred shares for GBP1.00.
On 30 June 2022, following the buyback, 350,487,787 deferred
shares were cancelled. Following the cancellation of the Deferred
shares on 30 June 2022, a transfer of $46.4 million was made from
Share capital - Deferred to a Capital redemption reserve (refer
Note 14).
The Group has Long Term Incentive Plans ("LTIPs") granted to
senior management, managers, and senior offshore officers and which
may result in increase in issued share capital in future (refer
Note 20).
14 Capital redemption reserve
The capital redemption reserve with a value of US $46.4 million,
(2021: nil) was created on
30 June 2022 when the Company purchased and then cancelled
350,487,787 deferred ordinary shares (refer Note 13). The capital
redemption reserve is not distributable.
15 Bank borrowings
Bank borrowings relate to the bank facility provided by a group
of six banks, which comprises of term loans and amounts available
under revolving working capital facilities. Secured borrowings at
amortised cost are as follows:
30 June 31 December
2022 2021
US$'000 US$'000
Term loans 344,977 358,026
Working capital facility* 6,500 21,500
351,477 379,526
--------- ------------
*During the period, the Group made repayments of US$15 million
(2021: Nil) towards working capital facility, of which US$13.5
million was early settled.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
15 Bank Borrowings (continued)
Bank borrowings are split between hedged and unhedged amounts as
follows:
30 June 31 December
2022 2021
US$'000 US$'000
Economically hedged bank borrowings 26,923 30,769
Unhedged bank borrowings 324,554 348,757
351,477 379,526
--------- ------------
Bank borrowings are presented in the condensed consolidated
balance sheet as follows:
30 June 31 December
2022 2021
US$'000 US$'000
Non-current
Bank borrowings 323,429 353,429
Current
Bank borrowings - scheduled repayments
within one year 28,048 26,097
351,477 379,526
--------- ------------
Net debt as at the end of the period/year was as follows:
30 June 31 December
2022 2021
US$'000 US$'000
Bank borrowings net of issue costs 351,477 379,526
Less: Cash and cash equivalents (10,057) (8,271)
Total 341,420 371,255
========= ============
On 31 March 2021, the Group amended the terms of its loan
facility with its banking syndicate. The amended terms (see below)
were significantly different compared to the original loan.
Management determined that the Group's loan facility was
substantially modified and accordingly the old loan facility was
extinguished, and the new facility recognised.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
15 Bank Borrowings (continued)
The principal terms of the outstanding facility as at 30 June
2022 are as follows:
-- The facility's main currency is US$ and is repayable with a LIBOR plus margin at 3% up to
31 December 2022 at which point margin is based on a ratchet
depending on leverage levels.
-- The revolving working capital facility amounts to US$ 45.0
million (2021: US$ 50.0 million). USD$ 25.0 million (2021: US$ 25.0
million) of the working capital facility is allocated to
performance bonds and guarantees and US$ 20.0 million (2021: US$ 25
million) is allocated to cash of which US$ 6.5 million was drawn as
at 30 June 2022 (31 December 2021 US$ 21.5 million), leaving US$
13.5 million available for drawdown (31 December 2021: US$ 3.5
million). The working capital facility expires alongside the main
debt facility in June 2025.
-- The facility remains secured by mortgages over its whole
fleet, with a net book value at 30 June 2022 of US$ 552.1 million
(31 December 2021: US$ 560.9 million) (Note 9). Additionally, gross
trade receivables, amounting to US$ 35.6 million (31 December 2021:
US$ 42.1 million) have been assigned as security against the loans
extended by the Group's banking syndicate(Note11).
-- The Group has also provided security against gross cash
balances, being cash balances amounting to US$ 10.1 million (31
December 2021: US$ 8.3 million) before the restricted amounts
related to visa deposits held with the Ministry of Labour in the
UAE of US$ 39K (2021: US$ 39K) included in trade and other
receivables which have been assigned as security against the loans
extended by the Group's banking syndicate.
-- The amended terms contain contingent conditions such that if
an additional equity raise of US $50.0 million does not take place
by 31 December 2022, PIK interest would potentially accrue, only if
leverage is above 4.0x (refer to the Glossary for PIK interest
rates) and warrants would be due to the banking syndicate. refer to
Note 16 for details of the valuation of the contract to issue
warrants.
The facility is subject to certain financial covenants
including; Debt Service Cover; Interest Cover; and Net Leverage
Ratio; which are tested bi-annually in June and December. As at 30
June 2022 the Group were required to achieve a net leverage ratio
lower than 6.5x, interest cover with a minimum ratio of 2.25x and
service cover with a minimum ratio of 1.2x. There are also
additional covenants relating to general and administrative costs,
capital expenditure and Security Cover (loan to value) which are
tested annually in December. In addition, there are restrictions to
payment of dividends until the net leverage ratio falls below 4.0
times. However, even if the net leverage exceeds 4.0 times it would
not be a breach of covenant. All applicable financial covenants
assigned to the Group's debt facility were met as of 30 June
2022.
Management considers the carrying amount of the Group's bank
borrowings approximates its fair value as at 30 June 2022.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
16 Derivative financial instruments
Embedded derivatives - contract to issue warrants
Under the terms of Group's previous loan facility, the Group was
required to issue warrants to its lenders if GMS had not raised US$
75.0 million of equity by no later than 31 December 2020. As this
term was not expected to be met, an embedded derivative liability
was recognised for the obligation to issue the warrants. On 01
January 2021, this had a value of US$ 1.4 million, which had
increased to US$ 1.9 million by March 2021.
In March 2021, the Group amended the terms of its loan facility,
as mentioned in Note 15, and additional time was granted to raise
equity before warrants were required to be issued to its lenders.
The previous obligation to issue warrants to the bank was waived,
and a contingent requirement to issue warrants to banks was
introduced. The amended terms required US$ 25.0 million of equity
to be raised by 30 June 2021 otherwise the Group would be in
default, and a further US$ 50.0 million to be raised by 31 December
2022. The Company was subsequently successful with the requirement
to raise the first tranche of equity (refer Note 13). If the second
tranche equity raise does not take place, by 31 December 2022,
there will not be an event of default (unlike the first tranche
equity raise), however, warrants will be issued to lenders.
As the new terms of the loan facility contained separate
distinguishable terms with a contingent requirement to issue
warrants to banks, management determined the debt facility to
contain an embedded derivative. The Group was required to recognise
the embedded derivative at fair value. Management commissioned an
independent valuation expert to measure the fair value of the
warrants, which was determined using Monte Carlo simulations. The
simulation considers sensitivity by building models of possible
results by substituting a range of values. This represents a Level
3 fair value measurement under the IFRS 13 hierarchy. The fair
value of the liability as at 30 June 2022 was US$ 1.4 million (31
December 2021 US$ 0.7 million). As the derivative is due to be
settled within 12 months, the balance recognised as a current
liability as at 30 June 2022.
Under these facilities, the Group is required to raise a further
US$ 50 million of equity by
31 December 2022 or issue 87.6 million warrants entitling the
banking syndicate to acquire
134 million shares at a strike/exercise price of 6.0 pence per
share for a total consideration of GBP GBP8 million. Warrant
holders will have the right to exercise their warrants up to the
end of the term of the loan facility being 30 June 2025.
Interest Rate Swap
The Group entered into an Interest Rate Swap (IRS) on 30 June
2018 to hedge a notional amount of US$ 50.0 million. The remaining
notional amount hedged under the IRS as at 30 June 2022 was US$
26.9 million (31 December 2021: US$ 30.8million). The IRS hedges
the risk of variability in interest payments by converting a
floating rate liability to a fixed rate liability. The fair value
of the IRS as at 30 June 2022 was an asset value of US$ 0.07
million (31 December 2021: liability of US$ 1.1 million). In 2020
cash flows of the hedging relationship for the IRS were not highly
probable and, therefore, hedge accounting was discontinued from
this point. In 2020 cash flows of the hedging relationship were not
highly probable and, therefore, hedge accounting was discontinued
from this point. The remaining balance in the cash flow hedge
reserve relates to the balance to be recycled to the profit and
loss following the discontinuation of the hedge relationship.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
16 Derivative financial instruments (continued)
Interest Rate Swap (continued)
The fair value measurement of the interest rate swap was
determined by independent valuers with reference to quoted market
prices, discounted cash flow models and recognised pricing models
as appropriate. They represent Level 2 fair value measurements
under the IFRS 13 hierarchy.
IFRS 13 fair value hierarchy
Apart from the contract to issue warrants, the Group has no
other financial instruments that are classified as Level 3 in the
fair value hierarchy that are determined by reference to
significant unobservable inputs. There have been no transfers of
assets or liabilities between levels of the fair value hierarchy.
There are no non-recurring fair value measurements.
Derivative financial instruments are made up as follows:
Interest Embedded
rate swap derivative Total
US$'000 US$'000 US$'000
At 1 January 2022 (1,076) (717) (1,793)
Net gain on changes in fair value
of interest rate swap 777 - 777
Settlement of derivatives 369 - 369
Net loss on changes in fair value
of embedded derivative - (667) (667)
At 30 June 2022 70 (1,384) (1,314)
------------ ------------- --------
Interest Embedded
rate swap derivative Total
US$'000 US$'000 US$'000
At 1 January 2021 (2,387) (1,449) (3,836)
Net gain on changes in fair value
of interest rate swap 278 - 278
Settlement of derivatives 1,033 - 1,033
Derecognition of embedded derivative
warrants - 1,890 1,890
Initial recognition of embedded
derivative - (926) (926)
Net loss on changes in fair value
of embedded derivative - (232) (232)
At 31 December 2021 (1,076) (717) (1,793)
------------ ------------- --------
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
17 Notes to the Condensed Consolidated Statement of Cash Flows
Six-month period ended Year ended
30 June 31 December
-------------------------
2022 2021 2021
US$'000 US$'000 US$'000
Profit for the period 13,110 1,994 31,219
Adjustments for:
Depreciation of property and equipment
(Note 9) 11,843 11,353 22,816
Amortisation of dry-docking expenditure
(Note 10) 2,768 2,563 5,503
Amortisation of right-of-use asset 1,152 1,117 2,411
Reversal of impairment (Note 9) - - (14,959)
Income tax expense (Note 5) 1,471 851 1,707
End of service benefits charge 48 350 678
End of service benefits paid (119) (355) (546)
Movement in ECL provision during
the period/year (63) (30) 62
Share based payment credit/(charge) 43 (53) (18)
Finance income (8) (6) (9)
Finance expenses (Note 8) 7,290 7,986 14,463
Other income (66) (20) (28)
Cash flow from operating activities
before
movement in working capital 37,469 25,750 63,299
Changes in trade receivables 6,571 (2,804) (17,936)
Changes in prepayments, advances
and other receivables (1,538) 2,719 846
Changes in trade and other payables 142 (3,103) (4,849)
Cash generated from operations 42,644 22,562 41,360
Taxation paid (439) (448) (849)
Net cash generated from operating
activities 42,205 22,114 40,511
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
18 Contingent liabilities
At 30 June 2022, the banks acting for Gulf Marine Services FZE,
one of the subsidiaries of the Group, had issued performance bonds
amounting to US$ 12.5 million (31 December 2021:
US$ 11.6 million), all of which were counter-indemnified by
other subsidiaries of the Group.
19 Capital commitments
30 June 31 December
2022 2021
US$'000 US$'000
Contractual capital commitments 6,616 6,832
Capital commitments comprise mainly capital expenditure, which
has been contractually agreed with suppliers for future periods for
equipment or the refurbishment of existing vessels.
20 Long term incentive plans
The Group has Long Term Incentive Plans ("LTIPs") which were
granted to senior management, managers and senior offshore
officers.
The employment condition attached to the Groups LTIP's is that
each eligible employee of the Company must remain in employment
during the three-year vesting period. For 2019 and 2020 awards,
LTIPs were aligned to Company's share performance. The release of
these shares was conditional upon continued employment and market
vesting conditions.
During the period ended 30 June 2022, additional LTIPs awards
were granted to the Chairman and Senior Management. The awards will
vest over three years subject to the same employment conditions
described above and performance conditions being met in 2024 based
on defined ranges. There is an underpin condition such that no
awards will vest if the debt leverage in the Group exceeds 4.0
times EBITDA at 31 December 2022 excluding any issue of equity
during the year.
Equity-settled share-based payments were measured at fair value
at the date of grant. The fair value determined, using the Binomial
Probability Model together with Monte Carlo simulations, at the
grant date of equity-settled share-based payments, is expensed on a
straight-line basis over the vesting period, based on an estimate
of the number of shares that will ultimately vest. The fair value
of each award was determined by taking into account the performance
conditions, the term of the award, the share price at grant date,
the expected price volatility of the underlying share and the
risk-free interest rate for the term of the award.
Non-market vesting conditions were taken into account by
adjusting the number of equity instruments expected to vest at each
balance sheet date so that, ultimately, the cumulative amount
recognised over the vesting period was based on the number of
awards that eventually vest. Any market vesting conditions were
factored into the fair value of the share-based payment
granted.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
20 Long term incentive plans (continued)
To the extent that share-based payments are granted to employees
of the Group's subsidiaries without charge, the share-based payment
is capitalised as part of the cost of investment in
subsidiaries.
The number of share awards granted by the Group during the
period is given in the table below:
30 June 31 December
2022 2021
At the beginning of the period 2,499,714 6,573,229
Granted in the period 9,460,000 -
Cash settled in the period - (1,854,298)
Forfeited in the period (109,296) (2,219,217)
At the end of the period 11,850,418 2,499,714
----------- ------------
The weighted average remaining contractual life for the vesting
period outstanding as at 30 June 2022 was 2.49 years (31 December
2021: 0.5 years). The weighted average fair value of shares granted
during the period to 30 June 2022 was US$ 0.057 million (31
December 2021: US$ nil).
LTIP LTIP LTIP
Grant date 14 Jun 2022 29 May 2020 15 Nov 2019
Share price GBP0.06 GBP0.09 GBP0.08
Exercise price GBP0.00 GBP0.00 GBP0.00
Expected volatility 102% 120% 102.79%
Risk-free rate 2.17% 0.01% 0.48%
Expected dividend yield 0.00% 0.00% 0.00%
Vesting period 3 years 3 years 3 years
Award life 3 years 3 years 3 years
The expected share price volatility of Gulf Marine Services PLC
shares was determined taking into account the historical share
price movements for a three-year period up to the grant date (and
of each of the companies in the comparator group). The risk-free
return was determined from similarly dated zero coupon UK
government bonds at the time the share awards were granted, using
historical information taken from the Bank of England's
records.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
21 Related party transactions
Significant transactions with related parties during the period
were as follows:
30 June
2022 30 June
US$'000 2021
US$'000
Rentals of property from Abdulla Fouad 50 54
Rentals of breathing equipment from
Abdulla Fouad 280 241
Catering services for vessel Pepper
from National Catering Company Limited 281 -
WLL
Abdulla Fouad is a partner and minority shareholder in GMS Saudi
Arabia Ltd, a subsidiary of the Group. Amounts due to Abdulla Fouad
as at 30 June 2022 was US$ 0.4 million (31 December 2021: US 0.1
million). National Catering Company Limited WLL is an affiliate of
a significant shareholder of the Company. Amounts due to National
Catering Company Limited WLL, as at 30 June 2022 was US$ 0.3
million (31 December 2021: US$ 0.1 million).
22 Events after the reporting period
There were no subsequent events of impact to these Condensed
Consolidated Financial Statements after the reporting period.
GULF MARINE SERVICES PLC
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 June 2022 (continued)
23 Glossary
Alternative Performance Measure (APMs) - An APM is a financial
measure of historical or future financial performance, financial
position, or cash flows, other than a financial measure defined or
specified in the applicable financial reporting framework.
APMs are non-GAAP measures that are presented to provide readers
with additional financial information that is regularly reviewed by
management and the Directors consider that they provide a useful
indicator of underlying performance. Adjusted results are also an
important measure providing useful information as they form the
basis of calculations required for the Group's covenants. However,
this additional information presented is not uniformly defined by
all companies including those in the Group's industry. Accordingly,
it may not be comparable with similarly titled measures and
disclosures by other companies. Additionally, certain information
presented is derived from amounts calculated in accordance with
IFRS but is not itself an expressly permitted GAAP measure. Such
measures should not be viewed in isolation or as an alternative to
the equivalent GAAP measure. In response to the Guidelines on APMs
issued by the European Securities and Markets Authority (ESMA), we
have provided additional information on the APMs used by the
Group.
Adjusted diluted earnings per share - represents the adjusted
earnings attributable to equity holders of the Company for the
period divided by the weighted average number of ordinary shares in
issue during the period, adjusted for the weighted average effect
of share options outstanding during the period. The adjusted
earnings attributable to equity shareholders of the Company is used
for the purpose of basic gain per share adjusted by adding back
impairment charges (deduction of reversal of impairment during the
year 2021), and costs to acquire new bank facilities. This measure
provides additional information regarding earnings per share
attributable to the underlying activities of the business. A
reconciliation of this measure is provided in Note 4 and 6.
Adjusted net profit - represents net profit after adding back
costs of renegotiating bank terms. This measure provides additional
information in assessing the Group's total performance that
management is more directly able to influence and, on a basis,
comparable from year to year. A reconciliation of this measure is
provided in note 4 of these results.
Average fleet utilisation - represents the percentage of
available days in a relevant period during which the fleet of SESVs
is under contract and in respect of which a customer is paying a
day rate for the charter of the SESVs.
Average fleet utilisation is calculated by adding the total
contracted days in the period of each SESV, divided by the total
number of days in the period multiplied by the number of SESVs in
the fleet.
Cost of sales excluding depreciation and amortisation -
represents cost of sales excluding depreciation and amortisation.
This measure provides additional information of the Group's cost
for operating the vessels. A reconciliation is shown below:
30 June 30 June
2022 2021
US$'000 US$'000
Statutory cost of sales 39,021 35,007
Less: depreciation and amortisation (15,577) (14,806)
--------- ---------
23,444 20,201
--------- ---------
EBITDA - represents earnings before interest, tax, depreciation
and amortisation, which represents operating profit after adding
back depreciation and amortisation. This measure provides
additional information of the underlying operating performance of
the Group.
A reconciliation of this measure is provided in Note 4.
Margin - revenue less cost of sales before depreciation,
amortization and impairment as identified in Note 4 of the
consolidated interim financial statements.
Net bank debt - represents the total bank borrowings less cash
and cash equivalents. This measure provides additional information
of the Group's financial position.
A reconciliation is shown below:
30 June 31 December
2022 2021
US$'000 US$'000
Statutory bank borrowings 351,477 379,526
Less: cash and cash equivalents (10,057) (8,271)
--------- ------------
341,420 371,255
--------- ------------
Net cash flow before debt service - the sum of cash generated
from operations and investing activities.
Segment adjusted gross profit - represents gross profit after
adding back depreciation, amortisation and impairment charges or
reversal of impairment charges. This measure provides additional
information on the core profitability of the Group attributable to
each reporting segment. A reconciliation of this measure is
provided in Note 3.
Underlying performance - day to day trading performance that
management are directly able to influence in the short term
OTHER DEFINITIONS
Average day we calculate the average day rates by dividing total
rates charter hire revenue per month by total hire days
per month throughout the year and then calculating
a monthly average.
Backlog represents firm contracts and extension options held
by clients. Backlog equals (charter day rate x remaining
days contracted) + ((estimated average Persons On
Board x daily messing rate) x remaining days contracted)
+contracted remaining unbilled mobilisation and demobilisation
fees. Includes extension options.
Borrowing LIBOR plus margin.
rate
Calendar takes base days at 365 and only excludes periods
days of time for construction and delivery time for newly
constructed vessels.
Costs capitalised represent qualifying costs that are capitalised as
part of a cost of the vessel rather than being expensed
as they meet the recognition criteria of IAS 16 Property,
Plant and Equipment.
Day rates rate per day charge to customers per hire of vessel
as agreed in the contract.
Demobilisation fee paid for the vessel re-delivery at the end of
a contract, in which client is allowed to offload
equipment and personnel.
DEPS/DLPS diluted earnings/losses per share.
Employee percentage of staff who continued to be employed
retention during the year (excluding retirements and redundancies)
taken as number of resignations during the period/
year divided by the total number of employees at
the period/year end.
EPC engineering, procurement and construction.
ESG environmental, social and governance.
Finance service the aggregate of
a) Net finance charges for that period; and
b) All scheduled payments of principal and any other
schedule payments in the nature of principal payable
by the Group in that period in respect of financing:
i) Excluding any amounts falling due in that period
under any overdraft, working capital or revolving
facility which were available for simultaneous redrawing
under the terms of that facility;
ii) Excluding any amount of PIK that accretes in
that period;
iii) Including the amount of the capital element
of any amounts payable under any Finance Lease in
respect of that period; and
iv) Adjusted as a result of any voluntary or mandatory
prepayment
Debt Service represents the ratio of Adjusted EBITDA to debt service.
Cover
GMS core consists of 13 SESVs, with an average age of ten
fleet years.
Interest represents the ratio of Adjusted EBITDA to Net finance
Cover charges.
IOC Independent Oil Company.
KPIs Key performance indicators.
Lost Time any workplace injuries sustained by an employee while
Injuries on the job that prevents them from being able to
perform their job for a period of one or more days.
Lost Time the lost time injury rate per 200,000 man hours which
Injury Rate is a measure of the frequency of injuries requiring
(LTIR) employee absence from work for a period of one or
more days.
LIBOR London Interbank Offered Rate.
Mobilisation fee paid for the vessel readiness at the start of
a contract, in which client is allowed to load equipment
and personnel.
Net finance represents finance charges as defined by the terms
charges of the Group's banking facility for that period less
interest income for that period.
Net leverage represents the ratio of net bank debt to Adjusted
ratio EBITDA.
NOC National Oil Company.
OSW Offshore Wind.
PIK Payment In Kind. Under the banking documents dated
31 March 2021, PIK is calculated at 5.0% per annum
on the total term facilities outstanding amount and
reduces to:
a 2.5% per annum when Net Leverage is between 4.0X
and 5.0x
b Nil when Net Leverage reduces below 4.0x
PIK stops accruing at the PIK end date which is the
earlier of leverage falling below 4.0X or loans being
discharged.
Restricted any work-related injury other than a fatality or
work day lost work day case which results in a person being
case (RWDC) unfit for full performance of the regular job on
any day after the occupational injury.
Secured day day rates from signed contracts firm plus options
rates held by clients.
Secured utilisation contracted days of firm plus option periods of charter
hire from existing signed contracts.
Security the ratio (expressed as a percentage) of Total Net
Cover (loan Bank Debt at that time to the Market Value of the
to value) Secured Vessels.
SESV Self-Elevating Support Vessels.
SG&A spend means that the selling, general and administrative
expenses calculated on an accruals basis should be
no more than the SG&A maximum spend for any relevant
period.
Total Recordable calculated on the injury rate per 200,000 man hours
Injury Rate and includes all our onshore and offshore personnel
(TRIR) and subcontracted personnel. Offshore personnel are
monitored over a 24-hour period.
Underlying underlying general and administrative (G&A) expenses
G&A excluding depreciation and amortisation, restructuring
costs, and exceptional legal costs.
Utilisation the percentage of calendar days in a relevant period
during which an SESV is under contract and in respect
of which a customer is paying a day rate for the
charter of the SESV.
Vessel operating Cost of sales before depreciation, amortisation and
expense impairment, refer to Note 4.
Warrants Under the banking documents date 31 March 2021, if
Warrants are issued on 1 July 2021 because of the
failure to raise US$ 25 million by 30 June 2021,
half of the issued warrants vest on that date. The
other half will only vest on 2 January 2023 if there
is a failure to raise US$ 50 million. If warrants
are issued on 2 January 2023 because of the failure
to raise US$ 50 million all of the issued warrants
vest on the same date. All warrants to expire on
30 June 2025 (maturity date of the facilities).
==================== ====================================================================
Cautionary Statement
This announcement includes statements that are forward-looking
in nature. All statements other than statements of historical fact
are capable of interpretation as forward-looking statements. These
statements may generally, but not always, be identified by the use
of words such as 'will', 'should', 'could', 'estimate', 'goals',
'outlook', 'probably', 'project', 'risks', 'schedule', 'seek',
'target', 'expects', 'is expected to', 'aims', 'may', 'objective',
'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we
see' or similar expressions. By their nature these forward-looking
statements involve numerous assumptions, risks and uncertainties,
both general and specific, as they relate to events and depend on
circumstances that might occur in the future.
Accordingly, the actual results, operations, performance or
achievements of the Company and its subsidiaries may be materially
different from any future results, operations, performance or
achievements expressed or implied by such forward-looking
statements, due to known and unknown risks, uncertainties and other
factors. Neither Gulf Marine Services PLC nor any of its
subsidiaries undertake any obligation to publicly update or revise
any forward-looking statement as a result of new information,
future events or other information. No part of this announcement
constitutes, or shall be taken to constitute, an invitation or
inducement to invest the Company or any other entity and must not
be relied upon in any way in connection with any investment
decision. All written and oral forward-looking statements
attributable to the Company or to persons acting on the Company's
behalf are expressly qualified in their entirety by the cautionary
statements referred to above.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
IR EAKNDASSAEFA
(END) Dow Jones Newswires
September 26, 2022 02:00 ET (06:00 GMT)
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