Mermaid Maritime : Annual Report 2021 (PDF)

MERMAID MARITIME PUBLIC COMPANY LIMITED

TABLE OF CONTENTS

FINANCIAL HIGHLIGHTS

Year Ended 31 December

2019

(Consolidated numbers)

2020

2021

(in thousand US Dollars, except share, per share data, and ratios)

Revenue from rendering of services	105,933	83,779	111,592
EBITDA*	(1,467)	(11,761)	(294)
Net profits (losses)	(24,216)	(109,594)	(15,671)
Normalised profit/(losses)**	(19,860)	(29,842)	(16,929)
Book value per share	0.20	0.13	0.11
Return on shareholders' equity (%)	(8.05)	(47.21)	(9.27)
Net profits (losses) margin (%)	(22.86)	(130.81)	(14.04)
Total debt to total capitalisation (times)	0.16	0.25	0.24
Net gearing (%)	3.5	0.7	20.4

* EBITDA excludes non-recurring non-cash items (impairment losses and loss on disposal of investment in an associate) ** Net profits (losses) excludes non-recurring items

MESSAGE FROM THE CHAIRMAN

PRASERT BUNSUMPUN

CHAIRMAN OF THE BOARD

DEAR VALUED SHAREHOLDERS,

I am honored to present to you our 2021 Annual Report. This year, as you may once again recognize, was, globally, a very challenging year due to the continuing impact of the COVID-19 pandemic. However, as opposed to the volatility of the oil and gas prices experienced globally in 2020, the steady oil price rise in 2021 offers us a silver lining and our expectation is that this fundamentally bodes well for the Group going forward.

Nonetheless, 2021 has yet again demonstrated Mermaid's resilience in the face of adversity. Guided by our good governance, we are still a leading international specialist for marine and subsea engineering services with a view to business expansion and strong partnership management.

HOLDING THE FORT

2021 has been another difficult year for Mermaid: but the just rewards for the hard fought platform laid down this year places us in a very strong position to benefit from the global uptick going forward. Oil prices have increased over the past year as a result of steady draws on global oil inventories and high GDP growth. Brent crude oil spot prices averaged $71 per barrel in 2021, and have risen to more than $93/b as at early February 2022. As per EIA, Brent prices will remain high, averaging $75/b throughout 2022. Furthermore, the market for specialist subsea vessels tightened in 2021 and with the increase in the total number of global projects underway - or soon to be underway - in both renewables and traditional Oil and Gas, the active specialist subsea vessel fleet will be gainfully deployed. This will support both utilization and a further "soaking up" of third party tonnage. These factors are expected to contribute to an increase in vessel day rates going forward.

The most important factor continues to be the COVID-19 pandemic. It has materially impacted the market with commensuarate slowdown in business growth and further disruptions to the global economy. Global growth was reported at 5.9% (five point nine percent) in 2021 and is expected to moderate further to 4.4% (four point four percent) in 2022, reflecting the forecast markdowns in the world's two largest economies (the USA and the PRC).

In a continuation of the situation experienced in 2020, the additional costs incurred in order to maintain a COVID-19 safe work environment whilst maintaining operations throughout the pandemic has had a significant impact on line items such as vessel running cost, quarantine cost and vessel chartering cost due to schedule postponement. The combination of these factors have once again detrimentally affected our bottom line.

It is with my sincere appreciation to the Board, for their stirling efforts, along with the senior management and all company personnel, that the quickly evolving situation was addressed and managed as effectively as possible in a fast changing regulatory environment, considerably limiting any adverse impact.

Revenue earned in 2021 was USD 111.6 million and up from USD 83.8 million earned in 2020. Consequently, Mermaid unfortunately ended the year in a net loss position from operations of USD 17.0 million, albeit considerably improved from the previous years recorded loss from operations of USD 31.9 million. Once again, it must be underlined that the dedication and application in the current situation with heightened management focus led to significant impact minimization in an extremely challenging year. Correspondingly, our strategies are bearing fruit with the significant achievement of a more diversified forward book being greater at the end of the year than it was at the beginning of any year for the first time in any of the past four years, is testimony to the significant recovery