Liftboat specialist lifts EBITDA guidance citing progress with cost cuts

UAE-based liftboat provider GMS has increased its 2019 EBITDA guidance prior to closure of 2019 accounts on December 31, 2019. 

To remind, the company providing self-elevating self-propelled support rigs for the offshore energy industry, in November said that on the back of recent contract awards and progress with cost cuts lead to a new EBITDA Guidance for 2019 the range of $48-50 million, with the previous being declared as $45-48 million.

Come Thursday, December 19, GMS issued another EBITDA guidance, where the range is still $48-50 million for 2019, however, at the upper end of the guidance range.

GMS said the updated EBITDA guidance reflected improved performance against the 2019 cost target.

“Initially set at $6m of annualized savings, this will now exceed $12m, comprising $5m in G&A, $6m in operating costs and $1m in capex,” GMS said.

Related: GMS CEO quits after guidance reset  – 2019/08/23

As previously reported, GMS earlier this year started “a fundamental governance and management overhaul,” replacing the Chairman, CEO, the CFO, and directors – after a detailed review of the Company’s year-to-date financial performance and forecast activity levels for the fleet established that 2019 EBITDA would be lower than in 2018.

In an update on Thursday, GMS said that the business has responded well to the new direction and revised management targets.

“All teams are focused on improved financial performance, through a combination of further cost savings, improved operational efficiency and building on recent business development success to improve vessel utilization. The negotiations with the Group’s lenders are moving forward in a constructive fashion and will be the subject of a further update in due course,” GMS said.

 Tim Summers, Executive Chairman, commented: “The last twelve months have been a challenging period for GMS. However, comprehensive changes to the Board and the Senior Management have delivered a significant change in our corporate culture, with a focus on financial and commercial success. Our contract wins through the autumn show GMS is rebuilding confidence in our ability to deliver in a competitive environment, and we face 2020 from a much stronger position than 12 months ago.”

Guidance for 2020 performance will be issued in the first quarter of next year.

Offshore Energy Today Staff

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