Topaz Energy and Marine drastically narrowed its losses in the second quarter of the year, mainly as a result of cost cuts, the UAE oil services company said.
Net losses in the three months to June 30 fell to US$700,000 compared with $4.1 million in the year-earlier period.
Direct costs shrank 19 per cent to $44.3m from $54.6m.
Revenue in the second quarter declined 20.3 per cent to $71.8m from $90.1m, owing to a decrease in vessel contracts in the Middle East and Africa.
The company reported earnings before interest, tax, depreciation and amortization (Ebitda) of $36.9 m for the three months ending in June, down from last year’s $41.3m. The biggest losses came from the Middle East and Africa.
“Our Mena and Africa regions have had a challenging six months as the Mena market moves increasingly to spot rate contracts and our clients reduce or delay investment in the West Africa offshore market,” said the Topaz chief executive René Kofod-Olsen.
The company blamed lower utilisation as the market shifts to spot contracts rather than futures. The company expects its Caspian and Azerbaijan fleets to offset other weak areas.
In May Topaz won a $350m contract to supply and operate 15 vessels in Kazakhstan. The vessels will begin work in the second quarter of 2018 for a minimum contract period of three years.
Topaz also won a contract to supply 14 offshore support vessels to BP in Azerbaijan this year.
“As market demands change, we’re responding by optimising our vessel allocation and our cost structure,” Mr Kofod-Olsen said, adding that Topaz has mobilised four vessels from Mena to Russia.
“We expect the trading conditions for the rest of the year to continue being highly challenging.”
Topaz is a subsidiary of Muscat-listed Renaissance Services. Renaissance shares closed 3.3 per cent lower at 25.7 Omani baisa.
lgraves@thenational.ae
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