12th September:
Gulf Marine Services (GMS), a leading provider of self-propelled and self-elevating support vessels for the offshore energy sector, is pleased to announce the award of a new long-term contract for one of its vessels in the GCC. The contract spans a total of five years, inclusive of optional extensions, and contributes to further improvement in fleetwide average day rates. This contract takes our backlog to USD 464 million.
30th June 2024 (and 2023):
Secured backlog was US$ 426.8 million on 30 June 2024 (30 June 2023: US$ 301.4 million), which reflects the additional contract awards announced over the last 12 months, offset by the revenue recognised. |
>>Broker confirms there has been no downgrade at all. It was always 2.9c.>>
Apologies if I I've got that wrong - the numbers I quoted come from Stockopedia.
I looked them up this morning having read Paul Scott's comment that broker forecasts had reduced "quite a bit recently". |
Yes, I guesstimated the newly announced contract would total approx $23m. Given the 54 day drain on the backlog and the net -$2m off that backlog.
Over 18 months, that's around $15-16m per year - so not far off 10% of annual turnover - for one small-class vessel. (this assumes this contract is the only addition to the backlog since 10th October).
"Gulf Marine Services (GMS), a leading provider of self-propelled, self-elevating support vessels for the offshore energy sector, is pleased to announce the award of a new contract for one of its small-class vessels in the GCC region. The contract spans a total of 18 months, including optional extensions." |
zho3 Dec '24 - 09:17 - 2638 of 2645
He points out that broker forecasts have been cut back recently, which surprised me.
Stockopedia currently quote a consensus of 2.9c for 2024 (down from 3.8c on 3/8/24) and 4.0c for 2025 (down from 4.7c).
Broker confirms there has been no downgrade at all. It was always 2.9c. |
If they are turning over approx $14 million a month then between you would have expected the backlog to drop by nearly $28 million as the existing contracts are serviced.
Worrying about a $2 million drop in the backlog is worrying in itself.
The business is in great shape. |
There were 54 days between October 10th and December 3rd.
In those 54 days, the backlog, absent any new additions, would fall by the sum total of the contracted day rates x 54.
The new contract would add to that backlog.
Net effect is a drop of 2 million.
Contracts being lumpy, it's likely that the backlog rises and falls naturally. |
would it not just be this current contract is smaller than one that say has just been completed and so the backlog has gone down for that reason? Doesn't seem like an issue to me. |
I noticed that too (reduced backlog) and beginning to wonder who is releasing these rns and what for. |
10th October:
The current backlog totals USD 505 million, representing 3.3x 2023 revenue and a c.18% increase over that announced at the half year end on 30th June 2024. The strength of market demand is allowing the Company to meet its deleveraging goal quicker than anticipated.
3rd December:
"We are delighted to see continuous demand for all our vessels in a highly competitive market. Maintaining high utilization is key for us to continue to deliver on our objectives. Our backlog now stands at USD 503 million." |
The price targets have nudged up though from what I can see - around 35p from 32p a few months ago. |
Well that 2.9 consensus has translated into a $60m+ operational reduction in net debt. If that can carry on next year - or even improve - the share price should take care of itself. ATB |
There's a good write up from Paul Scott on his Substack page.
He points out that broker forecasts have been cut back recently, which surprised me.
Stockopedia currently quote a consensus of 2.9c for 2024 (down from 3.8c on 3/8/24) and 4.0c for 2025 (down from 4.7c). |
https://www.investegate.co.uk/announcement/rns/gulf-marine-services--gms/contract/8585894 |
Looking to add ! Deleveraging story developing |
Is this background warrant sellers? |
The drillers have finally disposed of the excess capacity they built in the early 2000s. It has only taken 16 years and 3 bankruptcies each! Drilling prices were artificially low for a very long time, to the benefit of expensive deep and ultra deep fields versus the cheap shallow fields in the Persian Gulf. |
Some background on the state of the market for offshore oil rigs at
"Since the start of 2022, the average day rate for floating oil rigs has risen by more than 40 per cent according to analysts tracking the industry at Rystad, an energy consultancy. Since renting a rig accounts for between 20 per cent and 40 per cent of the cost of developing an oilfield, the rise in prices, combined with rig availability, has implications for how much oil is going to come on to the market over the next few years." |
It's just typical churn.
I'm holding for long term upside.
I'm currently in the line of work and we're very busy.
P. |
I don't think anyone apart from those eager to sell really knows. IMO this should be closer to 28p based on fundamentals. I would say the absorption of the Seafox distribution has exhausted buyers for now. I imagine back ground short selling of shares by warrant holders continues they I don't have any direct evidence for that, but I would be doing that in their situation. Related to that some potential investors may be holding off for what they anticipate could be more availability from warrants.
In terms of oil, the cycle has really gone out of the business. The US onshore dynamic means that there has been no splurge on expensive long lead offshore fields so supply and demand are relatively well balanced. I do expect KSA to regain some market share which will cap prices, but not destabilise them. |
Why this retreat? Is it in line with the sector? Oil-related? |
Yes, there is all the normal stuff.
Investors most want to see the warrants out of the way I think. When I read back through the public documentation on those they are compensated pro-rata for either a dividend or a buy back, so if I have expressed in the past preference for a dividend ahead of buy backs that was nonsense. So investors will be happy to hear about the returns policy if that makes an appearance this side of the FY results. |
And possibly updated 25 guidance in the next couple of weeks/ month or so I believe... |
In itsef it isn't price moving news, it is just a message of comfort to shareholders that demand remains and rates are going up. We await the closing of the refinance as the next substantive change. |
I liked the demand for all vessels"We are delighted to have secured this contract at an improved day rates for one of our small-class vessels. This confirms the continuous demand for all the vessel classes we operate." |
They seem bored of announcing the same stuff over and over! |
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