Topaz Energy and Marine, a leading offshore support vessel company, posted a net loss of $3.1 million in the first six months (H1) of the year as against a profit of $21.9 million during H1 2014, a fall of 114.2 per cent.

The company posted consolidated revenue of $175.4 million for the period, which is down 5.3 per cent compared to the $185.2 million revenue earned during the first half of 2014.

René Kofod-Olsen, chief executive officer, Topaz Energy and Marine said: “Our robust performance in the Caspian market and the relative stability of our Mena business, which together contribute over 86 per cent to group revenue, was offset by our Subsea and Africa operations.”

 “Our investment in Africa as a long-term growth opportunity is strategic and we expect it to continue to impact profitability for the rest of the year. Some of our Subsea vessels were out of contract for the second quarter and are now engaged for the second half of 2015.  

“Despite the challenges we face as the market adjusts to a low oil price, Topaz’s model continues to enable us to generate value. Our long-term contracts in the Caspian allow us to invest in long-term growth markets such as Nigeria and Angola as well as build our presence in the Mena region. Vessel utilization in the Caspian has risen to 98 per cent, up 5 per cent from 1H 2014, and the company’s overall fleet utilization maintaining strong levels at 85 per cent. We continue to see high levels of commercial activity in Qatar and Saudi Arabia and we are confident of securing additional long-term contracts in these regions.

“As outlined in the first quarter results, we are now fully registered in our key African markets of Nigeria and Angola. This quarter we established a Topaz licensed entity in Angola, received the key operating licenses, appointed a country manager and rented office space for a three year term. This means we can move from spot rate contracts to our proven model of securing medium to long-term contracts. Africa is a long-term strategic investment for Topaz as the offshore market is forecast to grow and clients will increasingly require our services.

“We continue to actively manage our costs by refinancing debt, conserving cash and postponing non-essential fleet upgrades. Our $550 million refinancing of existing debt in April 2015 on more favourable terms reflects the confidence of the banking industry’s support of our operating model and ensures we have the right capital structure to provide the financing to fund our plans and lower Topaz’s overall debt repayment profile.

“We will continue to focus on reducing costs for the remainder of 2015 without sacrificing safety or operational quality. Cash preservation is high on the agenda, balanced with a pursuit of growth opportunities, both organic and M&A, and which remain within our covenants,” Kofod-Olsen added.

“Our prudent cost management program, established relationships with leading industry players, young fleet and continued focus on securing long-term contracts, position Topaz to withstand the market adjustment to a lower oil price and we are confident of being able to deliver consistent results for the full year.”

Revenue from the Mena decreased by $3.8 million, or 8.9 per cent, to $38.7 million compared to $42.5 million for the same period last year.

This decrease is primarily due to revenue loss of $3.9 million on one vessel sold last year and loss of revenue of $1.5 million due to expiration of a long term contract for three vessels in Saudi Arabia.

However this decrease in revenue was slightly offset from better utilization on spot contract vessels of $1.6 million, a statement said. – TradeArabia News Service