Topaz Energy and Marine, a leading offshore support vessel operating company headquartered in Dubai, recently announced a sharp reduction in bottom line results for 2016. Revenues were down by more than 21% compared with 2015, while profitability on an EBITDA basis slumped by over 14%.
René Kofod-Olsen, chief executive officer, Topaz Energy and Marine, said, “Our 2016 results are reflective of the prolonged downturn in the energy sector which is a consequence of an unpredictable oil price, and minimal capital spending by oil companies, which is now at a 10-year low. These factors have contributed to visibly low charter rates and utilisation across our industry segments and thus low profitability.”
Operationally, Topaz’ established foothold in the Caspian Sea helped achieve overall fleet utilisation of 79%. This, however, is lower than 2015 utilisation levels, due to the completion of some projects by clients in the region. In the Mena and Africa regions, Topaz experienced severe pressure on both rates and utilisation levels, with lower overall fleet utilisation of 60% and 47% respectively. This lack of demand led to 12 vessels being laid-up in these regions during the year.
“The outlook in both regions remains very challenging,” says Mr Kofod-Olsen in light of the halt in capital spending by oil majors and subdued demand for OSVs. “Despite the downturn, there are contracts to be won on safe and profitable terms and we will leverage our strong presence in the region to continue to pursue and win these contracts.”