The chief executive of Abu Dhabi-based offshore oilfield contracting company Gulf Marine Services, Duncan Anderson, has resigned from his post as the company said earnings for 2019 are likely to be lower than 2018.
Following a review of its year-to-date financial performance and forecast activity levels for its fleet the company said it expects earnings before interest, tax, depreciation and amortisation (Ebitda) to be in the range of $45 million (Dh165.2m) to $48m. It had earlier stated that it expected overall trading in 2019 to be "at similar levels to 2018", when the company achieved Ebitda of $58m but a net loss to shareholders of about $7m.
In a statement to the London Stock Exchange, where its shares trade, GMS said orders this year mean half of its fleet is already secured on firm contracts in 2020, which was "a stronger position than at the same point 12 months ago".
"Nevertheless, market conditions remain challenging, although there are a number of material new tender opportunities which GMS is pursuing in the near term," the company said.
Gulf Marine Services (GMS) has undergone several years of difficult trading following the oil price slump in 2014 and has endured four successive years of revenue decline, as well as two years of losses. The company said on Wednesday it breached a banking covenant during the first half and is working with lenders to reset covenants. Its share price has also fallen 81 per cent over the past 12 months, to $7.92 per share at 1.30pm UAE time on Wednesday.
As a result GMS has faced pressure from a number of investors, including Seafox International, which requisitioned a general meeting calling for changes that included the appointment of two new board members. Although its proposal was voted down, GMS has appointed several new board directors, including a new chairman and new chief financial officer, in addition to the "comprehensive plan" announced in March to cut costs, improve governance and return value to shareholders. A new chief executive is now being sought but in the interim non-executive chairman Tim Summers, who was appointed in April, will serve as executive chairman.
"While we are disappointed to reset guidance for 2019, GMS' underlying business remains sound and the new board recognises the importance of building a track record of delivery for our shareholders," Mr Summers said on Wednesday.
"GMS has progressed significantly towards our objectives of governance, management and cost improvements, and we continue to be in constructive negotiations with our banks on a new capital structure for the company."