May 9, 2005
Gulfmark Offshore reports record quarter
GulfMark Offshore, Inc. (NasdaqNM:GMRK) today announced record quarterly net income of $8.9 million, or $0.43 per share (diluted) for the quarter ended March 31, 2005, on the highest quarterly revenue ever achieved, $48.1 million. This compares to a net loss of ($4.9) million, or ($0.25) per share (diluted) on revenue of $31.6 million for the first quarter of 2004, before a change in accounting for dry dock expenditures. Record operating income of $15.1 million for the first quarter of 2005 was more than double the $7.3 million for the fourth quarter of 2004 and was a "vast improvement over the operating loss of ($0.1) million for the first quarter of 2004."
President and COO Bruce Streeter also reported that the company has recently signed a purchase agreement for a 5,150 BHP, 60 ton bollard pull AHTS under construction in China for delivery later this year and has first right of refusal on a second such vessel.
Driving the improvement in the first quarter of 2005, compared to the same period in 2004, was the continued strengthening of day rates in the North Sea, the addition of two vessels and improved utilization in the North Sea and Southeast Asia. Compared to the preceding quarter (the strongest quarter in 2004), the average day rate in the North Sea increased 14.9 percent from $14,134 to $16,251 while utilization in the region improved from 83 percent in the fourth quarter of 2004 to 90percent in the first quarter of 2005. Day rates and utilization in the Americas and Southeast Asia markets remained consistent over the sequential periods from the fourth quarter of 2004 through the first quarter of 2005.
"We are now seeing the benefits of the newbuild vessel program we began four and a half years ago," noted Streeter.
"The outlook for the remainder of 2005 is encouraging," said Streeter. We see increasing rig demand and lengthening rig contracts, some now extending well into the period 2006--2007. In addition, the number of North Sea construction projects slated for the 2005 and 2006 construction seasons will support strong demand for vessels. These factors, when combined with an increasing demand for equipment in other exploration and production regions of the world, especially deepwater units, afford some visibility for the future of the offshore support vessel market. We anticipate that this will result in a continuing strong market throughout the balance of 2005 and into 2006."
"We are currently in the process of mobilizing two vessels, which have just been completed in Singapore, to Mexico where they will begin five-year contracts at the end of the second quarter," said Streeter. "In addition, we have recently signed a purchase agreement for a new 5,150 BHP, 60 Ton Bollard Pull AHTS (anchor handling towing supply vessel) currently being constructed in China at a cost below $10.0 million. This vessel is due to deliver in the second half of 2005 and will be deployed to the Southeast Asia market where there is a growing requirement for newer, more technologically advanced vessels. The company also has a first right of refusal on an identical vessel which is due to deliver late in 2005 or early in 2006. The addition of this new vessel is part of the evolution of our Southeast Asia fleet. This vessel, in addition to the units previously transferred to the region, will enhance and expand our capacity to meet customer needs in Southeast Asia."