New deals, cost cuts spur GMS to lift 2019 guidance
Gulf Marine Services (GMS), a provider of self-propelled self-elevating support vessels, has seen its financial situation improve due to recently won contract awards.
GMS said on Thursday that the recently won contract awards, as well as continued progress on optimizing and reducing the cost base, improved its EBITDA Guidance for 2019.
The new EBITDA Guidance for 2019 is in the range of $48-50 million, with the previous being declared as $45-48 million.
The company added that the focus on optimizing general and administrative expenses (G&A) spending would continue, with a reduced operational footprint, a simplification of the organization, and streamlining of the structure at senior levels.
The end of year run-rate for G&A will be approximately 12 percent of 2019 revenue, representing a reduction in annualized G&A costs of around one-quarter since 2018.
According to GMS, organizational simplification, along with optimization of third-party spending, has resulted in the recent target of $8.5 million of annualized savings being improved with the new target now set at $10 million. The savings target is now $4 million higher than the original target of $6 million set earlier in the year.
As for the two recent contracts won by GMS, the company won a four-year contract for a K-Class (Small) vessel from a Middle East national oil company earlier this month.
The work will be undertaken in United Arab Emirates waters, where the vessel will be mobilized for operations in January 2020. Also, GMS in October secured a 6.5-month contract with extension options for another K-Class vessel.
The client is an international EPC contractor, and work will be undertaken in the UAE waters, where the vessel has already been mobilized for the project.
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