Dubai-based Topaz Energy and Marine, a leading international offshore support vessel company, has posted a revenue of $58.2 million for the three months ended March 31, 2017, down 25 per cent compared to $77.7 million for the same period last year.

The company also reported EBITDA of $31.2 million, down 21.4 per cent in comparison to $39.7 million from the previous year, a statement said.

Topaz reported a loss of $3.3 million during the quarter, compared to $2 million profit in the same period last year.

René Kofod-Olsen, chief executive officer, Topaz Energy and Marine, said: “When taking into consideration the unprecedented challenges facing our industry which have resulted in a collapse in demand that has impacted charter rates and ultimately affected the profitability of offshore vessel providers, our Q1 2017 results can be regarded as stable.

“Our EBITDA margin has improved to almost 54 per cent on the back of our persistent efforts to optimise our cost base and reshape the organisation to better perform in a volatile and unpredictable market,” he said.

“Our operating costs reduced by $9 million and stand at $38.5 million for the quarter,” he added.

Kofod-Olsen said: “Core fleet utilisation for the quarter was 58 per cent, which reflects the challenges in the spot market. In Azerbaijan where we have solid contract coverage, utilisation was 88 per cent, which is a testament to our strength in the region and a result of our solid operational performance.”

“In the Middle East and North Africa (Mena) and Africa regions we have continued to face severe pressure on rates and utilisation in the spot market, with lower overall core fleet utilization of 50 per cent and 33 per cent respectively,” he added.

“The outlook in both regions remains very challenging. However, we have witnessed a slight uptick in Mena tendering activities and as a result reactivated two vessels which were in warm layup. We continue to have eight vessels from the Mena fleet and two vessels from the Africa fleet in layup,” said.

Kofod-Olsen further noted that the company will leverage its strong presence in the region to continue to pursue and win contracts, and also that Mena and Africa remain its long-term strategic markets.

He stated: “Our contract backlog now stands at $1.5 billion, double the amount of same period last year, and is a testament to our client engagement and track record.”

“Major contracts included in the backlog are the Tengiz (TCO) contract worth in excess of $550 million commencing in 2018 and an on-going long-term BP contract for 14 vessels. The Tengiz contract is a successful example of the execution of our strategy to expand Topaz’ presence along our clients’ value chain,” he said.

“Although we remain fully compliant with all our financial covenants as of the reporting date, we have pre-emptively obtained approvals to reset the financial covenants on the senior secured facility (maturing 2022) from our long-term banking partners, enabling us to enhance our liquidity and headroom for the future,” he added.

“The outlook for the OSV market remains challenging. Although a rebound in oil prices will eventually boost demand, current significant over-capacity is resulting in rate pressures. This year is set to be a very difficult one for the industry but we are seeing green shoots in some markets and anticipate further recovery in the later part of the year. With our strong track record and client relationships, as reflected in our global vendor status from BP, Chevron, Exxon and Saipem, Topaz is well positioned to benefit from this recovery,” Kofod-Olsen concluded. – TradeArabia News Service