MMA Offshore reported strong demand for its vessels and services in the first FY2024 half-year. With newbuild vessel orders at a historic low and limited additional vessel supply anticipated in the coming couple of years, the Australia-headquartered company said it was expecting favorable market conditions to continue.
For the half year, MMA Offshore reported revenue of $204.3 million, up 28% on the previous corresponding period, EBITDA of $63.3 million, up 97%, and net profit after tax (NPAT) of $62.5 million which included an impairment reversal of $23 million.
At a macro level, the company said market conditions continue to be buoyant with strong demand from both the oil & gas and offshore wind sectors. Demand for both MMA’s vessels and subsea services was strong throughout the first half with positive momentum continuing.
“The medium-term outlook for offshore activity remains strong with over US$500 billion in greenfield oil and gas projects forecast to be sanctioned globally over the next five years including over US$180 billion in our key operating regions,” said MMA’s Managing Director David Ross .
“The offshore wind sector is also seeing unprecedented growth in our operating regions with more than 5,000 turbines expected to be installed in the Asia Pacific alone between 2024 and 2031.”
For its subsea business , MMA reported an “excellent first half” , delivering a 91% increase in EBITDA to $10.3 million as a result of improved margins and enhanced project delivery, and similarly, the vessel business delivered a strong result, generating a 74% increase in EBITDA to $57 million, on the back of solid utilization and strengthening rates.
According to Ross, newbuild vessel orders are at a historic low, and with limited additional vessel supply expected to enter the market in the coming two to three years, favorable market conditions are expected to continue.
“With earnings improving and vessel values continuing to increase globally, we reversed the remaining $23 million in prior years’ vessel impairments during the half. This unwinds all remaining vessel impairments recorded in previous financial years,” Ross said.
MMA recently added two new vessels to its fleet with the purchase of the Offshore Solution multi-purpose support vessel (MPSV) which was funded through cash reserves and has been utilized by the subsea division since joining the fleet. Reactivation of the previously chartered vessel MMA Harmony was recently completed with the vessel joining the fleet and commencing its first contract this month, contributing to second-half earnings.
The company also reported that its diversification strategy continues to progress very well, with more than 50% of first-half revenue generated from outside of traditional oil & gas markets, including approximately 25% from offshore wind, 10% from government and defense, and 14% from decommissioning services. Furthermore, approximately 50% of the first half revenue was generated from outside of Australia/New Zealand.
In the second half, MMA said it was expecting market conditions to continue being positive with momentum in all of its key markets. According to Ross, both the vessel and subsea business have contracted well through the traditional monsoon period and into the second half, with second-half earnings currently anticipated to be in line with the first half.