Topaz Energy and Marine, a leading offshore support vessel company, has posted a net profit of $20.8 million before exceptional items for 2015.

The company also reported impairment charge of $71 million on vessels and a one-off charge of $8.3 million associated with debt re-financing.

The key Caspian region continued to perform strongly with robust core fleet vessel utilization of 96 per cent (94 per cent in 2014). Topaz signed long-term contracts with BP in the Caspian, further strengthening contract backlog and long-term earnings visibility.

Proactive focus on cost management contributed to mitigation of the EBITDA reduction.

Continued rigorous cash management program; focus on working capital cycle as well as deferring non-essential capex.

Conservative fleet expansion with two new-build Subsea vessels commissioned in September 2015 adding to the two vessels already under construction (1 MPSV and 1 AHTSV). The MPSV was delivered in January 2016 with other vessels due in 2017. The new ERRV, Topaz Responder, has won a medium-term contract in the Mediterranean (Dec 2015).

René Kofod-Olsen, chief executive officer, Topaz Energy and Marine said, “Despite a strong performance in our key Caspian market, which makes up 63 per cent of revenue, our financial results reflect subdued demand for offshore support vessels in our nascent market in Africa and rate pressure in Mena.”

“Our net profit was impacted by two exceptional items, one being impairment charge of US$71 million on vessels as the current oil and gas environment materially impacted the valuation of our fleet. While our valuation principal of “Value in use” has not changed, weaker industry fundamentals mean we have had to re-base the valuation to align with the environment. Second being the unamortized arrangement fees written-off during the re-financing of debt. Excluding these exceptional items, Topaz delivered a net profit of $ 20.8 million during 2015,” he added.

“Utilization in our Caspian market is up by 2 per cent to 96 per cent compared with 2014 and revenue increased by 4.5 per cent during the period. We recently secured 14 OSV contracts with BP in the Caspian Sea for a period of five years plus two one-year options, extending the tenure of our existing contracts for the 14 vessels until 2023,” Kofod-Olsen continued.

This significant deal increases our backlog to nearly $1.4 billion and gives us better long-term visibility of revenues. Our robust performance in this region throughout the year, despite a challenging market, demonstrates the strength of our relationships with long-term clients and our ability to generate returns in a lower oil price environment and we expect our performance will hold steady in this region through 2016.

“The decrease in revenue in our Mena region is primarily due to the sale of a vessel during December 2014 of $21.6 million; however we are also being impacted by the expiration of contracts in this region. In January 2016, we acquired a new AHTSV ‘Topaz Mamlaka’ which will be deployed to Saudi Aramco on a long-term contract of three years plus options from February 2016. We have been operating in the Mena region for more than two and a half decades and are confident we will maintain a satisfactory performance this year though we can expect the next few quarters to be challenging,” he added. – TradeArabia News Service