Gulf Marine Services (LSE:GMS) reported a weaker first quarter after war-related disruption in the Gulf led to the precautionary evacuation of four vessels operating in a Gulf Cooperation Council state. The disruption reduced fleet utilisation to 74%, contributing to a 10% year-on-year decline in revenue to $38 million and a 24% fall in EBITDA to $19.5 million.
Despite the operational challenges, the company continued to benefit from higher average day rates and reported an increase in backlog to $660 million.
Fleet Expansion and Geographic Diversification Support Long-Term Strategy
The group has expanded its fleet through the addition of a new mid-class vessel, partly financed via a bridge loan facility. Gulf Marine Services has also redeployed assets into Europe and Latin America as part of efforts to strengthen its renewables exposure and diversify geographically.
Management said leverage remains below its target of 2x and reaffirmed 2026 EBITDA guidance of between $105 million and $115 million. The company also postponed a decision regarding shareholder distributions while crews continue returning to evacuated vessels and the order book improves further to $666 million. The developments highlight the balance between near-term geopolitical risks and the company’s broader long-term growth ambitions.
Financial Strength Offset by Free Cash Flow Weakness
Gulf Marine Services’ outlook continues to benefit from improving financial fundamentals, including ongoing deleveraging, sustained profitability and generally positive free cash flow generation.
However, these strengths are partly offset by a decline in net income during 2025 and a sharp reduction in free cash flow. Technical indicators remain mixed, while valuation metrics are viewed as broadly mid-range, providing limited additional upside support.
More about Gulf Marine Services
Gulf Marine Services is a London-listed offshore marine contractor established in Abu Dhabi in 1977. The company specialises in advanced self-propelled, self-elevating support vessels serving the offshore oil, gas and renewables industries. Operating a fleet of 15 vessels across the Middle East, Europe, the Americas and Africa, Gulf Marine Services supports activities including platform maintenance, well intervention and offshore wind installation for global energy clients.
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