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Abu Dhabi, UAESunday 23 September 2018

Losses mount for Topaz Marine, pushed by cheaper spot rates

The Dubai oil services firm looks to next year as more promising

Topaz chief executive René Kofod-Olsen expects a growth revival next year. Jaime Puebla / The National
Topaz chief executive René Kofod-Olsen expects a growth revival next year. Jaime Puebla / The National

Topaz Energy and Marine, the Dubai-based oil services company, reported on Thursday deeper losses, rattled by the Middle East and Africa’s spot rates.

The company reported losses of US$10 million in the second quarter, compared to $700,000 in losses a year earlier.

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René Kofod-Olsen, Topaz chief executive, said that the company continued to face difficulties in both the Mena and African markets, which are mainly controlled by the spot market with the Mena region holding a lower overall core fleet utilisation rate of 51 per cent, followed by Africa at 26 per cent.

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“The outlook in both regions remains very challenging; however, we’ve witnessed a slight uptick in Mena tendering activities and as a result, reactivated three vessels from the Mena fleet and redeployed one vessel from Africa to Mena,” he said.

Revenues fell by a fifth to $57.4m in the three months ending in June, down from $71.8 a year earlier.

Topaz has six inactive vessels from the Mena fleet and one from Africa, which it plans to leverage to pursue other contracts in the region. “Mena and Africa remain long-term strategic markets for Topaz,” Mr Kofod-Olsen said.

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He added that there were some signs of recovery with next year expected to offer better opportunities for growth.

One positive is that Topaz completed its issuance of $375m in senior notes, which were due next year. The company’s debt buyback will help the next phase of growth, Mr Kofod-Olsen said.

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