Nautilus Marine Services Loss Widens Amid "Fundamental Change"

LONDON (Alliance News) - Global offshore inspection and repair firm Nautilus Marine Services ...

Alliance News 14 September, 2017 | 12:44PM
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LONDON (Alliance News) - Global offshore inspection and repair firm Nautilus Marine Services PLC reported Thursday that its loss deepened in the first half of the year so far.

The six months to June 30 saw a pretax loss from continuing operations of USD6.6 million on USD140,000 revenue. For the same period the previous year, the pretax loss was USD2.3 million on USD84,000 revenue. The company had a cash balance of USD20.1 million on that date.

In February, Nautilus began what Chairman Mikel Faulkner described as a "fundamental change of business" by acquiring a small fleet of shallow-water-specific offshore vessels and equipment valued at USD13.6 million. In the process, it changed its name from Global Energy Development PLC to Nautilus Marine Services. During the half year, the company took delivery of 12 offshore vehicles, subsea diving equipmment and other smaller inventory.

Recent performance was driven primarily by the fact that "cost of sales increased substantially during the period primarily due to the acquired assets," Faulkner said. Cost of sales rose to USD2.7 million from USD269,000 over the same period last year.

Similarly, administrative expenses increased to USD3.7 million from USD2.3 million a year before. This increase was "primarily due to transaction costs related to the acquisition of the vessels, additional staffing related to our rebranding and growth initiatives as an offshore service provider, and incentive compensation expense paid during the first quarter of 2017," Faulkner added.

Nautilus said it expects administrative expenses to be reduced in the second half of 2017.

"Whilst oil price forecasts fluctuate, offshore energy companies continue to focus on keeping project costs low," Faulkner said. "In a challenging market, Nautilus is pursuing investments in viable service providers in need of possible restructuring or additional resources in order to achieve regional growth or increase overall market share. As the offshore services sector has been challenged recently by stricter operating margins and decreased utilisation rates, most offshore service providers are struggling to survive. By streamlining costs and restructuring highly-leveraged balance sheets, the Group believes it can capitalise on the current distressed market and build, or be a part of, a profitable niche offshore service company which can benefit even at current activity levels and related thin profit margins."

"Going forward in this market," Nautilus Chief Executive Officer John Payne said, "offshore service providers must differentiate their services as innovative and efficient. Nautilus is actively reviewing the Gulf of Mexico and international markets to identify investment prospects in offshore service assets and service-providers with commercialised, offshore technologies. With our expertise and available capital, we believe we can build an offshore service group by connecting synergistic assets and technologies and helping to expand these services into new regions. Through balance-sheet restructuring, streamlining of administrative functions and capital infusion, Nautilus aims to build a unique, synergistic service provider for offshore projects in order to create value for our shareholders."

Shares in Nautilus Marine Services were down 20% at 8.50p on Thursday.

By Ahren Lester; ahrenlester@alliancenews.com.

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Nautilus Marine Services PLC 11.00 GBX 6.02 -
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