Market Update - First Quarter FY2011

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Neptune Marine Services Ltd (ASX:NMS) offers the following update of its major activities in the first quarter of FY2011.

As expected, activity in Q1 was subdued, however the company expects an improvement in the second quarter, underpinned by two project awards for the Neptune Trident, increasing utilisation of the ROV fleet in Asia, and improving trading conditions across most regions. The continued expectation is that the full year result will be biased towards the second half of the year.

During the first quarter of 2010 Neptune was awarded a number of key contracts, including:
•    A three year Inspection, Monitoring, Maintenance & Repair (IMMR) Services contract in the Timor Sea for a European multi-national operator.
•    A program of decommissioning support utilising the Neptune Trident and two ROVs.
•    An unexploded ordinance (UXO) geophysical survey utilising the Neptune Trident.
•    New and extended dive and vessel support services on the Gorgon Project.
•    A NEPSYS® scope for the Australian Navy that resulted in new Germanischer Lloyd (GL) classification.
•    A combined services project in Oman.
•    Pipeline stabilisation and remedial works offshore southern and eastern Australia.
•    Market leading bespoke engineering, design and manufacture of customised subsea hardware (deepwater) for one of the world’s leading integrated energy companies that is a direct result of the Macondo incident.

Neptune’s Managing Director and CEO, Christian Lange, said while it was encouraging that the business continued to secure new work and tender aggressively, the market was competitive.

Mr Lange said the company was confident of improved levels of performance in 2Q11 and 2H11 based on its primary workload, newly contracted work, the rescheduling of formerly delayed projects, and an encouraging tender pipeline.
“The consistent flow of regular, day-to-day work and our additional contract awards with new and return customers, continues to demonstrate the growing industry recognition for our integrated service model and the intrinsic value it provides,” he added.

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