Marine services business MMA Offshore Limited has posted strong revenue and profit rises for the second half but sees weaker business for the oil industry for the rest of the year.
But investors are still punishing the company for its association with the oil industry which has been hit by plunging prices.
Net after tax profit rose 55.8% to $37.7 million on revenue, up 80% to $456.3 million. There’s an interim dividend of 4 cents a share.
The ASX gave MMA a “speeding ticket” last month, asking the company to respond to a surge in the volume of its shares being traded and a rapid rise in its share price. Much of those gains have been erased, with the stock down more than 8% today.
The company says lower oil prices will impact drilling activity and margins as clients focus on costs. MRM will be looking to cost cutting and productivity.
The company expects activity in the second half to be weaker as a result of reduced Australian construction activity as the Gorgon gas project in Western Australia nears completio, combined with the impact of lower oil prices.
Chairman Tony Howarth foreshadowed a challenging international market.
“The recent plunge in the oil price has had a dramatic impact on the sector globally with oil and gas majors reacting by curbing capital expenditure and seeking to reduce their operating costs,” he said.
“The Australian construction market is less impacted in that most of the current offshore support work relates to the construction of large LNG projects which have already been sanctioned and are well into the construction phase.”
Its shares are down more than 12% to $0.86.