the australian

Neptune Marine Immune to Global Gloom

OIL and gas contractor Neptune Marine has unveiled half-yearly revenue of $97 million and forecast buoyant times ahead despite stormy economic waters and the sinking oil price.

Managing director and chief executive Christian Lange said Neptune, which provides engineering, surveying and subsea welding services, was largely protected from the downturn because of its exposure to oil and gas producers.

"We see some impact in that some new field developments may get postponed, but to date we haven't had an impact from this taking place," Mr Lange said.

"The bulk of our business is related to inspection, maintenance and replacement services and we've seen no slowdown there.

"You would generally see seismic and exploration drilling are generally the first budgets to get cut -- we don't have a large role to play in that side of the business, because that's typically a drilling game."

The offshore oil and gas services company has been very acquisitive over the past three years, recently purchasing Aberdeen's Subsea Engineering Services and two vessels.

Mr Lange said there had been an increase in activity in Asia and in the US where hurricane repairs were continuing.

He said although some marginal projects would close down, deep water plays would be unlikely to slow down.

"A lot of the perceived industry slow down now is companies taking advantage of the economic climate and renegotiating their contracts -- any done in the last 2 years were done at the peak of the cycle," he said.

Neptune's quarterly result, released yesterday, showed a 15 per cent increase in revenue from the previous quarter, up 231 per cent on the previous year to $52 million.

"We are pleased with our revenue performance for the first six months -- that has us well placed to achieve our forecast," Mr Lange said.

Hartley's analysts Trent Barnett said the results were "pretty good" and set Neptune on track to meet full-year expectations of about $160 million in revenue.

"They should be able to make that," Mr Barnett said. "Anyone who can deliver anywhere near what they thought they could six months ago is doing really well.

"If there's one slight negative it's that operating cash flow is still lagging revenue and profit because they're growing quickly."

Mr Barnett said Neptune was relatively protected from the worst of the global economic downturn.

"They're not completely shielded, but they're a good business in a part of the market that has still got activity," Mr Barnett said.

Shares in Neptune Marine rose 0.015c to close at 0.305c.