Thailand: Mermaid Maritime Public Company Limited Reports First Quarter Results

For the three-month period that ended on 31 March 2011, total service income of the Group was Baht 1,144 million, an increase of Baht 425 million, or 59.1%, from Baht 719 million for the three-month period that ended on 31 March 2010 .

The increase in revenues of Baht 425 million was mainly due to higher asset utilisation in subsea group for 2QFY11 which was 54.1%, compared to 28.3% for 2QFY10. This increase in utilisation resulted in an increase in revenue of Baht 357 million, or a 97.6% increase from 2QFY10. 2QFY11 also saw higher revenues from survey services of Baht 61 million, and Baht 15 million of revenues from the mobilisation of MTR1.

Gross losses were Baht 60 million, an increase of Baht 32 million, or 114.3%, from gross losses of Baht 28 million for 2QFY10. The drilling group generated gross profits of Baht 29 million (10.9% margin) and the survey group generated gross profits of Baht 18 million (22.3% margin), while the subsea group generated gross losses of Baht 107 million (minus 13.4% margin). The subsea business continued to experience some softness in demand for its services. Although the overall utilisation rate for the subsea group improved, the day rates were lower than expected, while fixed costs, such as minimum crews on board and depreciation, were still being incurred.

Administrative expenses were Baht 152 million, an increase of Baht 8 million, or 5.6%, from Baht 144 million for 2QFY10. The increase was primarily due to administrative expenses of Subtech, which was acquired in March 2010 of Baht 12 million.

Subsea:

“The subsea market remains challenging, and downward pressure on day rates continues to occur as a result of increased vessel availability, as new vessels are completed and join the DSV fleet. As a result, we still anticipate that rates will remain low throughout 2011, but believe that our subsea group is well positioned to compete in these difficult market conditions through having the most advanced and modern portfolio of assets in Southeast Asia; a respected operational capability and excellent safety record, and experienced management and quality people.

We continue to observe and answer enquiries from a broad range of potential clients, particularly in relation to our new DP2 dive support vessels (“DSVs”). We have seen our order book increase over the first half of FY2011, and several of our vessels now have contracts in place for much of FY2011, with utilisation improving over the same period from last year. We also continue to have a number of tenders outstanding across several geographical areas such as North Sea, Middle East, West Africa, Thailand, Indonesia, Vietnam, China, and India, and remain confident of realising further contracts in the coming months.

We have also observed our peers to be encountering similar predicaments, both in the areas of slower than expected contract awards, lower vessel utilisation, pressure on day rates and hence decreased profits. To the extent that prevailing market conditions continue to exist,the Company expects that it will be challenging to secure a high level of charter rates for our subsea fleet in 2011.

Although actual recovery remains to be seen in the short term, as oil prices continue to stabilise and the global economic recovery continues, the indicators continue to support resumption in normalised activity in the medium to long term.

Our operational performance and safety standards continue to remain high and in line with global best industry practice.” – Mermaid Maritime Public Company Limited.

More info: Mermaid Maritime Public Company Limited

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Source: mermaid,May 16, 2011;