The environment across the Oil & Gas industry remains challenging, to say the least, with impacts felt by our customers and suppliers alike. SMG’s management continues to take the necessary steps to maintain margins at healthy levels, including sustained operational cost savings to generate a positive cash flow.
In 2018, we successfully operated a diverse fleet of 42 OSVs across the Middle East, South East Asia, Nigeria and Angola. Utilization rate was at 74%, and 72 new contracts were secured throughout the year.
The teams’ focus on HSE could not be more reflective in the performance results with zero LTIs. This is a significant accomplishment that highlights everyone’s commitment to safety and continued focus on HSE. With a large and modern fleet, professional management team and certified HSEQ management systems, Stanford Marine reaffirms its position as one of the world class providers in the industry. These results would not have been possible without the hard work of our teams, both onshore and offshore, whom I would like to thank and salute for their exceptional efforts and work ethic.
Beginning 2018 Grandweld was awarded a $45million shipbuilding project for 10 vessels, and throughout the year focused on moving it forward.
We are proud to continue making positive contributions to social issues such as education, health and wellness, economic development and environmental sustainability. Year on year, we continue to support centers and initiatives outside our company such as Al Noor Training Centre for Children with Special Needs, the Rashid Pediatric Therapy Centre, and The Angel Appeal. At SMG we believe that giving back to society makes us a more socially responsible organization.
We plan to focus further on reducing our operational cost in 2019 across the Group companies; higher revenue and lower operational cost is what we are striving for.
At Stanford Marine, we anticipate sustained utilization levels above 80% despite the low utilization of the world OSV fleet.
As for Grandweld, despite the slow demand in the shipbuilding business we continue to identify potential opportunities to build vessels for clients within the GCC. This is on the back of lower building costs complemented with the improved efficiency and know-how of Grandweld shipbuilding team. As for the ship repair, it is expected to turn healthy due to the improved utilization of OSV fleet in the region hence the demand for dockings.
We continue to rely on the sustainable strength of our customer base and continued implementation of cost saving initiatives to deliver positive performance.
In summary, I would like to thank the SMG team for their continued support and hard work in 2018. I would also like to thank our shareholders for their ongoing guidance and cooperation during this challenging period.