Gulf Marine Services delivers fifth year of double-digit growth, but geopolitics clouds 2026
Gulf Marine Services PLC posted another year of solid operational progress in 2025. Revenue rose 12% to US$ 188.1 million and adjusted EBITDA increased 12% to US$ 112.9 million, keeping margins at a healthy 60%. Pricing strengthened across the fleet and an additional leased large vessel contributed eight months of income. However, statutory net profit fell to US$ 19.5 million as impairments and a one-off tax charge bit into the bottom line.
With a rising backlog and lower debt, the business looks financially fitter than it has in years. The near-term swing factor is the escalating geopolitical situation in the Gulf in early 2026, which has already led to a customer declaring force majeure and put 2026 guidance under review.
Key numbers investors should know
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | US$ 188.1m | US$ 167.5m | +12% |
| Adjusted EBITDA | US$ 112.9m | US$ 100.4m | +12% |
| Adjusted EBITDA margin | 60% | 60% | – |
| Adjusted net profit | US$ 41.8m | US$ 32.2m | +30% |
| Net profit | US$ 19.5m | US$ 38.3m | -49% |
| Average utilisation | 87% | 92% | -5% |
| Average day rate | US$ 36.6k | US$ 33.1k | +11% |
| Backlog (year-end) | US$ 606m | US$ 480m | +26% |
| Net bank debt | US$ 156.6m | US$ 201.2m | -22% |
| Net leverage | 1.39x | 2.0x | -31% |
| Finance expenses | US$ 15.0m | US$ 23.5m | -36% |
| Operating cash flow | US$ 88.4m | US$ 103.6m | Lower |
Definitions: adjusted EBITDA is operating profit before depreciation, amortisation, non-operational items and impairments; utilisation is the percentage of available days under contract.
Why revenue and EBITDA climbed despite lower utilisation
GMS’s fleet worked fewer paid days on average in 2025 – utilisation dropped to 87% as vessels were prepared for new contracts, drydocked, and briefly impacted by June 2025 disruption in the Gulf. The offset was stronger pricing and more capacity. Average day rates rose 11% to US$ 36.6k across all vessel classes, and a leased large-class vessel entered service from Q2, adding eight months of contribution.
Operationally, downtime stayed impressively low at 1%, and safety performance was spotless again with zero Lost Time Injury Rate and zero Total Recordable Injury Rate.
Headline profit fell – here’s what hit the bottom line
Adjusted net profit rose to US$ 41.8 million, but statutory net profit halved to US$ 19.5 million. The bridge between the two is important:
- Impairments: a net impairment charge of US$ 10.1 million on non-financial assets, mainly reflecting updated assumptions for the smaller K-Class vessels. E-Class saw some reversals.
- Tax: US$ 16.3 million tax expense, driven primarily by a one-off ruling announced on 14 May 2025. The Board expects this to be non-recurring.
- Higher depreciation and amortisation: US$ 48.1 million versus US$ 36.2 million due to the larger asset base and drydock spend.
On the positive side, the December 2024 refinancing paid off quickly. Finance expenses fell 36% to US$ 15.0 million thanks to a lower margin, reduced gross debt and softer base rates. GMS also added interest rate and FX hedges in 2025 to steady future cash flows.
Debt sharply lower; liquidity fine but watch the near-term moving parts
Net bank debt fell to US$ 156.6 million after US$ 56.8 million of repayments, bringing net leverage down to 1.39x. That’s a long way from 8.06x five years ago and gives the Group far more room to manoeuvre. Operating cash flow stayed strong at US$ 88.4 million, albeit lower year on year due to higher receivables (reflecting stronger Q4 revenue), higher tax settlements, and advance payments/mobilisation for upcoming work.
Post year-end, GMS took a bridge loan of US$ 37.4 million to acquire a brand-new mid-class vessel. Even including that, net leverage remains below 2.0x before any EBITDA contribution from the new asset.
Backlog, pricing and the 2030 ambition
The order book is moving the right way. Year-end backlog was US$ 606 million (up from US$ 480 million) and had increased further to US$ 660 million by 1 April 2026. New charters and extensions totalled 15.4 years in 2025. Management also notes that average secured day rates for 2026 are 8% higher than the 2025 actual levels – a useful buffer if utilisation wobbles.
Strategically, GMS aims to double 2024 adjusted EBITDA by 2030. The additional leased large vessel in 2025 and the newly acquired mid-class vessel are the first steps. Geographic diversification is also in play: 90% of 2025 revenue came from Qatar, UAE and Saudi Arabia, but another vessel is set to deploy to Europe in 2026 to expand renewables exposure.
Geopolitical risk watch: guidance under review, force majeure declared
The main caveat in this update is the fast-evolving conflict across the Gulf since early January 2026. One customer has declared force majeure and GMS is reassessing its previously issued 2026 adjusted EBITDA guidance of US$ 105 million to US$ 115 million. A temporary two-week ceasefire has been reported, but management is rightly cautious.
Going concern analysis is detailed and reassuring up to June 2027. Even in a downside scenario where disruption runs to 31 August 2026 and average utilisation drops to 63% over 18 months, GMS expects to remain covenant-compliant with sufficient liquidity. A reverse stress test points to potential covenant pressure only if disruption extends further to 30 September 2026, a scenario the Board views as low probability at this stage.
Dividend decision: policy intact, payout paused
The Board has held off declaring a dividend given current uncertainty, but it reaffirmed the policy to distribute 20%-30% of annual adjusted net profit via dividends and/or buybacks when conditions permit and covenants are met. In plain English: the intention to return cash remains, but prudence wins for now.
What I think this means for GMS shareholders
The good news
- Pricing power is back: day rates up 11% and secured 2026 day rates another 8% higher than 2025 actuals.
- Balance sheet transformed: net debt down 22%, net leverage at 1.39x; finance costs down 36% after refinancing.
- Backlog building: US$ 606 million at year-end, US$ 660 million by 1 April 2026, giving welcome earnings visibility.
- Operational discipline: 1% downtime and clean safety record underpin client relationships.
The watch-outs
- Geopolitics is the swing factor for 2026. Force majeure has already been triggered by one customer and guidance is under review.
- Statutory earnings volatility: impairments and tax can still overshadow strong underlying performance.
- Utilisation dipped to 87% as vessels transitioned; further disruption could pressure near-term revenue recognition.
What to watch next
- Updated 2026 adjusted EBITDA guidance once the situation in the Gulf becomes clearer.
- Contract awards and extensions to keep the backlog ticking up, especially in Europe.
- Deployment and earnings contribution from the newly acquired mid-class vessel.
- Any resumption of dividends or initiation of buybacks once uncertainty eases.
Bottom line
GMS ended 2025 with stronger pricing, higher EBITDA, a larger backlog and a meaningfully de-risked balance sheet. On those fundamentals, the story remains on the right track towards the 2030 ambition. The near-term depends on how the Gulf situation unfolds. If disruption proves temporary, the combination of higher secured day rates, a bigger fleet and lower interest costs sets GMS up well. If it persists, management’s contingency plans and lower leverage provide valuable resilience.
