Company snapshot: Maritime Industrial Services

Date Established 1979

Main business sectors Jack-up rig construction and renovation, operations and maintenance services, contracting

Main business region UAE, Kuwait, Saudi Arabia, Qatar

Chairman Karim el-Solh

Maritime Industrial Services structure

Maritime Industrial Services (MIS) is a publicly listed oil and gas equipment fabrication and engineering company. It was formed in 1979 as an oil rig repair and oil field services firm and subsequently built its own equipment fabrication yard in Sharjah. Since then the company has moved into engineering, procurement and construction (EPC) contracting and operations and maintenance work.

MIS net profits
   ($m)
2005 9.5
2006 19.3
2007 22
2008 8.1
2009 28.9
First half of 2010 16.3
Source: MIS

Although the company is incorporated in Panama and has been listed on the Oslo Stock Exchange since 2007, its corporate headquarters are in Dubai and its main fabrication yard is still in Sharjah. It has branch offices in Kazakhstan, Kuwait and Qatar and is a shareholder in Jubail-headquartered MIS Arabia. The latter has an 85,000 square metre fabrication yard at Jubail Industrial City on Saudi Arabia’s Gulf Coast and is a 30:30:40 joint venture of MIS, the local Shoaibi Group and Jubail-headquartered AYTB.

In September, MIS announced the acquisition of local engineering company Litwin PEL as part of its plans to take on larger oil and gas engineering, design and construction projects.

MIS made $29m in net profit for 2009, its highest to date. The company posted reven-ues of $190m and profits of $16.3m for the first half of 2010. Kevin Hudson has been the firm’s managing director since October 2008. The board of directors is chaired by Karim el-Solh, chief executive at MIS’ biggest shareholder, Gulf Capital.

Maritime Industrial Services operations

The MIS business comprises 10 units: fabrication; new build; refurbishment; operations and maintenance; technical services; its Sunbelt safety business; rig metals; EPC; engineering projects international (EPI); and production services. The EPC unit focuses on work in the northern emirates of the UAE, while EPI is charged with developing large EPC and EPC management deals in the rest of the Middle East and North Africa. The production services unit, which was formed in August 2010, will focus on gas compression contracts.

MIS revenue by division
(percentage of $190m)
New build 56
EPC 15
Fabrication 14
Sunbelt 6
Refurbishment 5
Technical Services 4
Source: MIS  

Some 56 per cent of MIS’s revenues came from its new build division during the first half of 2010. The unit works on the construction of jack-up rigs for offshore oil drilling, lift boats and other major offshore structures. To date, it has built six rigs and the firm is working on two further jack-up projects. However, following a legal dispute with the client on the latter schemes, with Norway’s Mosvold Middle East Jackup Limited, MSI has agreed to complete only one of the two rigs for the client and will retain ownership of the second.

The third-biggest revenue generator for the first half of this year, at 14 per cent, was the fabrication division, which builds pressure equipment for oil and gas processing facilities. The EPC division brought in 15 per cent of overall revenues, while the refurbishment, technical services and safety divisions brought in 4-6 per cent of revenues each. The backlog of orders for these units totalled $94.8m at the end of the first half of 2010, up more than a third from January.

MIS order backlog
($m)
End of second half 2009 800
End of first half 2010 304.7
Source: MIS

In March, Abu Dhabi’s National Drilling Company awarded the refurbishment unit a contract worth $55.4m to refurbish its Al-Bzoom drilling rig, the division’s biggest order ever, while the EPC unit completed a $9m overhaul of Dubai’s gas pipeline infrastructure in September.

MIS completed a number of major projects in 2008-09 and its backlog of work has fallen from $800m in mid-2009 to about $300m.

Although the EPI and production services divisions have yet to generate significant revenue for the company, MIS remains optimistic about the prospects for future business at both units. EPI is working on the front-end engineering and design for a new project in Yemen, which the company believes could translate into a $100m EPC contract.

Maritime Industrial Services ambitions

Although new build has been a consistent big earner for the company, MSI recently told shareholders that new orders are likely to slow down. The unit’s backlog of work fell to $209m, from $311m between January and June 2010, due to a lack of new projects and the Mosvold dispute. Half of its current orders are for a rig MIS will own upon completion (it intends to operate this under a separate business unit).

In response, the new build division is currently assessing opportunities in renewable energy, particularly wind farm installation. MIS is also looking to win work in new markets and is considering bids for onshore projects in Iraq. It intends to consolidate its position within the UAE through the recently purchased Litwin, while moving on to bigger jobs elsewhere. The management believes the company can generate revenues of more than $1bn by 2013-14.

The company is also eyeing further acquisitions, which will allow it to become an integrated energy services and engineering company, from rig construction and drilling to the design and installation of permanent oil and gas facilities and operation and maintenance.