Topaz Energy and Marine, a leading offshore support vessel and marine logistics company, announced its results for the twelve months ended 31 December 2018.
Q4 2018 Results Highlights
Strong cash flow generation and increased profitability
· Q4 2018 revenue increased to US$106m, up 54% compared to Q4 2017; EBITDA increased by 100% to US$62m in Q4 2018 against Q4 2017.
· Operational efficiencies and the impact of all Tengiz project vessels being fully operational towards the end of the period ensured an increased EBITDA margin to 58% for the period, despite ramp-up costs for Tengiz.
· The company significantly enhanced profitability, with two consecutive quarters of profits (before exceptional items) and a positive PAT for the year.
Continued growth and significant contribution from the Tengiz project (part of Topaz Solutions)
· Record revenue and EBITDA contributions of US$45m and US$40m, respectively, from Topaz Solutions during the quarter.
· All 20 vessels for this project have been received from the shipyards and are earning full revenue as at 31st December 2018.
Market leading asset portfolio and fleet utilisation rates combined with improving market conditions
· Overall core fleet utilisation was at 86% in 2018 with significant improvements in MENA and Africa regions.
· BP contract in Azerbaijan extended up to 2025 (plus options), bringing the contract backlog to a record high of US$1.7bn, providing further revenue visibility and converting a significant portion of our backlog from “options” to “firm”
· Secured contracts for the two newbuild subsea vessels Topaz Tiamat and Topaz Tangaroa during Q4 2018, ahead of their Q1 2019 delivery from the shipyard
Robust financial performance driving balance sheet deleveraging
· Continued to be fully compliant with all financial covenants with sufficient headroom.
· Reaffirms corporate credit ratings by both Moody’s & S&P. Moody’s upgraded the outlook on Topaz from negative to stable.
Proven health and safety track record
· Topaz’s strong commitment to safety is illustrated by 36 consecutive months without Lost Time Injuries (“LTIs”).
René Kofod-Olsen, Chief Executive Officer, Topaz Energy and Marine said:
“Topaz delivered a strong financial performance in 2018, with full year profit after tax (before exceptions) of US$28m compared to a loss of US$24m in 2017. Cash generated from operations after tax increased by US$62m in the last quarter to reach US$146m for the year.
“Our market-leading utilisation rates increased to 86%, compared to 65% in the prior year, driven by higher deployment in our Solutions business through the Tengiz project, MENA and Sub-Saharan Africa fleets, as well as the addition of modern vessels. Our robust business performance was well reflected in our strong financial results for the year, with revenues and EBITDA up by 43% and 61%, respectively, compared to 2017, strengthening our balance sheet, while enhancing our profitability.
“With the stability of our home market position in the Caspian Sea, our transformational Tengiz project and the turnaround achieved in Sub-Saharan Africa, it’s satisfying that our strategies are progressing and delivering robust results, and that our revenue visibility has been further enhanced as our contract revenue backlog increased to US$1.7bn by the end of 2018.
“We remain agile in the management of our asset portfolio to ensure that we are at the forefront of industry innovation to drive growth in established and new markets. Following vessel divestments earlier in the year, we added two modern AHTSVs which were deployed into the growing market in the Kingdom of Saudi Arabia, to service a major oil company. Meanwhile, we secured contracts for the two modern subsea newbuildings which we took delivery of in Q1 2019.
“Tengiz, our strategic marine logistics project, part of Topaz Solutions, delivered better than expected returns in 2018 thanks to operational efficiencies and strict cost control. We expect to capitalise on these and continue delivering robust returns in 2019 as all 20 vessels of the fleet will be earning full revenue for the year.”