GulfMark Reports 3Q Results and $130 Million Add to New Build Program
GulfMark Offshore reports results of $31.2 million in net income, or $1.35 per diluted share, for the third quarter ending September 30, 2007. The Company also provided details of a $130 million, five vessel addition to the existing new build program, including three 3,000 DWT Platform Supply Vessels (PSVs) built to U.S. flag requirements and two 10,000 BHP Anchor Handling, Towing, Tug Supply (AHTSs).
Revenue for the third quarter 2007 was $74.7 million resulting in net income of $31.2 million, or $1.35 per diluted share. Revenue benefited from marked improvement in Southeast Asia day rates offset by a moderation in North Sea rates from the year ago record levels. Net income during the quarter benefited from the gains on vessel sales of $4.1 million, including the previously announced sale of the Sea Explorer. These gains were partially offset by our share of a deficit in a U.K. based industry-wide pension plan equivalent to $1.7 million, as well as higher dry dock costs related to the acceleration of one dry dock from the fourth quarter into the third quarter. Excluding the gains on vessel sales and the pension expense adjustment, net income was $28.8 million or $1.24 per diluted share.
For the nine months ended September 30, 2007, revenues were $214.6 million resulting in net income of $86.3 million, or $3.73 per diluted share. For the same period in 2006, revenues were $181.9 million and net income was $59.1 million, or $2.84 per diluted share.
Bruce Streeter, President and CEO, stated: ''We were quite pleased with the development and results of the third quarter, despite the increased dry docking costs and slightly lower spot market rates in the North Sea when compared to either the same period last year or the second quarter of 2007. Our continued growth in earnings year over year will come from the expansion of the fleet, the improvements in fleet mix and the ensuing contracts we are able to obtain. Earlier in the year, the operating tempo and customer requirements caused us to postpone some dry dock activity. We have spent considerably more on dry docks in this quarter and, to some extent, have caught up to our expected level of activity. Late in the third quarter of 2007, we accelerated a dry dock, originally scheduled for October, and completed it late in the September. We also accomplished an additional dynamic positioning (DP) upgrade to one of the North Sea vessels, the third vessel to which we have added DP capabilities this year.
''During the third quarter, and carrying forward to the present, we have been extremely active in completing and delivering new vessels while disposing of several older, smaller ships. Late in the third quarter, we took delivery of a large North Sea PSV, and as mentioned earlier, sold a small anchor handling vessel in Southeast Asia. Subsequent to the quarter end, we also sold another vessel in Southeast Asia and took delivery of two new vessels in that region. The North Sea vessel delivered in the third quarter and the two Southeast Asia vessels that delivered in late October have all started term contracts. Earlier in the year, we had indicated concern about potential delays in vessel deliveries which might impede our ability to meet contract start up requirements. We commend Jaya Holdings Ltd. and the Keppel Singmarine Pte Ltd groups in Singapore for meeting our delivery expectations on the Sea Supporter and Sea Cheyenne delivered in October 2007, despite the late arrival of some equipment. They did an excellent job in delivering high quality ships, while completing the vessels to allow on-time contract startup. We also want to compliment Aker Yards and Aker Soviknes for delivering another outstanding large platform supply vessel, the North Promise, two days ahead of the scheduled delivery date designated in the original contract.
''During the third quarter of 2007, we signed agreements with two shipyards to add five new vessels for a total cost of approximately $130 million to our new build program. Of the five new builds, the two (AHTS) vessels will be constructed at Gdansk Shiprepair Yard ''Remontowa'' SA in Poland. The three PSVs, built to U.S. flag requirements, will be constructed by Bender Shipbuilding & Repair in Mobile, Alabama. The first of these vessels is scheduled to be delivered in the fourth quarter of 2009 with the last of the five scheduled in the third quarter of 2010. We are extremely excited about the new additions to our new build program, which will add twelve new ships over the next thirty-four months. We will also seek to upgrade and improve the mix of vessels in the fleet through additions and selective dispositions as those opportunities occur.
''We continue to observe strong market conditions in all of our operating regions and will take the appropriate actions to benefit from the available charter opportunities. We believe our strategy has established the foundation for the potential growth of earnings and shareholder value well into the future.''