Monday, August 10, 2009


“ Profitability increases even though utilization declines “
QUARTER ENDED JUNE 2009 RESULTS Great Offshore recorded 22% increase in its revenue for QFY2010 to Rs2,470 million as compared to Rs2,027 million in Q1FY2009. For Q1FY2010, consolidating all the wholly owned subsidiaries viz. Deepwater Services (India) Ltd. (which has inchartered “Badrinath”, one of the two rigs), Great Offshore (International) Ltd. (which owns and operates a modern high end AHTSV) and KEI-RSOS Maritime Ltd & Rajamahendri Shipping & Oilfield Services Ltd. (on completion of all procedural formalities in November 2008) the company's revenue stood at Rs2,657 million, registering a net profit of Rs306 million. In Q1FY2010, revenue from EPC contract stood at Rs350 million.

In Q1FY2010, overall operating costs increased by 10% y-o-y to Rs1,307 million, which grew at lower rate than revenues, resulted in OPM rising by 550 basis points to 47% in Q1FY2010 as compared to 42% in Q1FY2009.

Interest expenses increased by 44% y-o-y to Rs251 million in Q1FY2010. Depreciation expenses increased by 16% y-o-y to Rs298 million in Q1FY2010. PAT increased by 244% y-o-y in Q1FY2010 to Rs413 million, as compared to Rs120 million in Q1FY2009. However, after giving effects of EO (invocation of Performance Bank Guarantee for non-delivery of new build Jack Up rig as per terms of the contract) for Q1FY2010, the reported PAT grew by 85% y-o-y to Rs222 million. PAT margin for Q4FY2009 increased by 1,080 basis points to 16.7% y-o-y.


Lower utilization rates : During Q1FY2010, drilling rigs were fully utilised y-o-y. Of the eligible revenue days, offshore supply vessels registered a utilisation of around 72% y-o-y (previous period 88%). The marine construction barge at a utilisation of 91 % ( corresponding period 58%) worked largely for in-house project execution work while the harbour tugs clocked a utilisation of 91% (corresponding period 72%).

Asset profile: As on July 30, 2009, the fleet comprises 41 vessels ( 2 drilling units, a construction barge and a heavy lift vessel , 26 offshore support vessels and 11 harbour tugs). The Company took delivery of a new build tug during June 2009 and would be deploying the same for Gangavaram port operations. More than 90% of its vessels are on long term charter.

Outstanding Debt: GOL's debt has increased to Rs17,000 million in Q1FY2010 as compared to around Rs12,000 million in Q1FY2009.

Revised open offer by ABG Shipyard: ABG Shipyard has raised its offer for control of Great Offshore by 20% to Rs 450 a share, bettering a bid by rival Bharati Shipyard. ABG bought 1,926,721 shares, or 5.2%, of Great Offshore from the open market at an average of Rs450 a share. With this the total shareholding of ABG shipyard is around 7.3%. Rival Bharati owns 19.5% of Great Offshore and is expected to increase its price from Rs405 to exceed ABG's offer. The two companies have time till August 24 to change their offer price.

To see full report: GREAT OFFSHORE LIMITED