Operations Update and Guidance

GMS, a leading provider of advanced self-propelled, self-elevating support vessels serving the offshore oil, gas and renewables industries, is pleased to share highlights on its unaudited operational management results for the nine months period ended 30 September 2024 (9M 2024) as well as to provide a revised adjusted EBITDA guidance for 2024.

The results are neither audited nor reviewed by external auditors.

Overview

Highlights:

• Net leverage ratio lowered to 2.31:1 (31 December 2023: 3.05:1). The Group's continuous focus on deleveraging has resulted in net bank debt reduced by US$ 46.1 million to US$ 221.2 million (31 December 2023: US$ 267.3 million and September 30, 2023 US$ 281.2 million). In addition to its contractual obligations, the Group made additional repayments and took further measures to minimise interest charges.
• Revenue of US$ 126.1 million was generated during the first nine-months of 2024, reflecting an increase of 11% compared to US$ 113.3 million in 9M 2023. The increase in revenue was attributed to improvements in fleet average day rates to US$ 32.8k (9M 2023: US$ 30.3k) as well as in the increase in other revenues and recoverable expenses such as mobilization, catering and manpower. The increase was partially offset by a decrease in fleet average utilization from 94% in 9M 2023 to 92% in 9M 2024, largely attributed to necessary downtime for the maintenance and drydocking of various vessels.
• Adjusted EBITDA increased by 12% to US$ 76.1 million (9M 2023: US$ 67.7 million) driven by the increase in revenue. Adjusted EBITDA margin is flat at 60%.
• Finance expenses decreased to US$ 17.9 million (9M 2023: US$ 24.6 million), driven by the lower level of gross debt, the cessation of 250 basis points (bps) Profit-In-Kind (PIK) interest and a reduction of the margin rate by 90 basis points (bps) when the Group's net leverage ratio dropped below 4:1 as of 31 March 2023, and a further reduction in the margin by 10 bps when the net leverage ratio passed below 3:1 as of 31 March 2024.

Strategic Progress and Outlook:

• Adjusted EBITDA guidance for 2024 increased to be in the range of US$ 96 - 101 million.
• We are in the process of revisiting the 2025 adjusted EBITDA guidance. We remain committed to the ongoing deleveraging of the Company throughout 2025.
• Demand in the market remains strong due to a combination of high market activity and limited vessel availability. An estimated 18-21 new vessels are expected to be operational in the next 2 to 3 years. We expect market growth and retirement of aged assets from 2025-2027 to absorb the supply increase.
• We are still in the process of preparing the new financing facility documentation, with completion expected in 2024.
• Secured backlog was US$ 465.5 million as of 30 September 2024 (30 September 2023: US$ 256.9 million), which reflects the additional contract awards announced over the last 12 months, offset by the revenue recognised. We subsequently announced that backlog has reached US$ 505 million as of October 10th, 2024.
• 34.2 million warrants were exercised, and 53.5 million shares were issued accordingly during the first 9 months of the year at the price of 5.75p per share. 53.4 million warrants potentially giving right to 83 million shares remain to be exercised up to June 30, 2025.

Board Update

On 3 September 2024, Hassan Heikal, Deputy Chairman of the Board, stepped down from the Board with immediate effect.

Alex Aclimandos, GMS Chief Financial Officer stated: "I am delighted to see the results achieved as well as the plans moving forward adding value to the shareholders of the Company. The solid fundamentals of the business are confirmed day after day and so is our ability to transition GMS into an agile Company serving offshore activities for Oil and Gas as well as windfarms customers worldwide."