Gulf Marine Services bucks trend to boost profit amid lower oil prices

Abu Dhabi-based Gulf Marine Services increased full-year profit after a decline in crude prices boosted demand for its low-cost support vessels for offshore oil production.

It costs $40,000 to $50,000 a day to charter the vessels the company builds at its own shipyard in the emirate, chief executive Duncan Anderson said in an interview on Tuesday. That compares with daily rates of $75,000 to $80,000 for the drilling rigs that perform similar tasks in maintaining offshore wells.

“In the current market, the clients are looking for more cost-effective solutions to supplant more expensive units,” Mr Anderson said. “We continue to see demand for the units” for 2015 and 2016, he said.

Gulf Marine has already received two new vessels as the company expands its fleet by two-thirds to 15 by 2016 to meet demand, said Mr Anderson, who doesn’t expect oil prices to remain low for more than two years. Focused on the Middle East, North Africa and northwest Europe, Gulf Marine reported a 9 per cent increase in 2014 profit to $75.6 million earlier today.

“As the oil price driven maelstrom dragged down the European oil services late in 2014, GMS’s long-term contracts, strategic and geographic focus and business model based solely on cost saving for its clients, allowed the company to stand tall, safe from the choppy waters below,” Mick Pickup, an analyst at Barclays Capital, wrote in a note to investors.

Gulf Marine announced a final dividend of 1.06 pence (Dh5.80) a share, bringing the total for the year to 1.47 pence.

Gulf Marine shares rose 1.5 per cent to 132 pence as of 10.15am in London.

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