OPERATIONS REVIEW
7
Trading for the period commencing 1 July 1999 to 30 June 2000 for Mermaid Marine
Australia Ltd ( “Company”) and its controlled entities, experienced a 43% turnover reduction
from last year. The result was almost entirely due to a heavy fall in oil prices, which reached their
low of US$10 in February 1999, leading to the lowest level of offshore activity for many years.
In September 1999 Mermaid exercised its option to acquire the utility vessel “Mermaid
Achiever” for $3,250,000. Previously the Achiever operated under a bare boat charter. 
In February 2000 Mermaid received approval in principle from the Western Australian Minister
for the Environment for the development of a supply and engineering base at Dampier (Dampier
Base). Since that time a detailed environmental management system has been produced for final
approval and as a guide to daily environmental management and compliance. Refinements to
the design have proceeded, together with the preparation of bid packages and negotiations with
Banks for project finance.
Subsequent to years end, the subscription of a further $5 million from Mr Mark Bradley and Clough
Engineering will see an extremely robust balance sheet, with cash on hand approaching $10 million.
As construction commences at Dampier, a level of project finance will be arranged providing a
comfortable mix of debt and equity and allowing the retention of a significant cash balance.   
The year saw considerable progress with Base activities at Dampier, Broome and Darwin. They
are dealt with in detail under following headings.
Mermaid recorded an after-tax loss for the Period of $207,957. Compared with an after-tax
profit for the previous period of $2,454,919. Revenue for the Period was $15,124,774, a decrease
of 43% over the previous period. Fixed cost reductions enabled the Company to ride out the
market reversal with a minimal loss and positive operating cash before capex of $1.6m. This
result, achieved against a major drop in turnover, was possible through a vigorous attack on
overheads, which included more beneficial ownership costs, insurance savings, management
salary savings, including voluntary sacrifice from certain senior executives in recognition of the
tighter conditions. In all the changes contributed approximately $1.5million to the bottom line. 
Bare boat charters, although useful for the busy times encountered in 1998 exposed the
Company to a high level of fixed costs. The vessels were valuable earners and the transfer of the
Mermaid Achiever, Mermaid Eagle and Mermaid Reunion to Company ownership has proved
to be the right decision for all market conditions. Although there have been no contracts yet let
for work of any significance by producers on the North West Shelf, underlying day to day activity
has returned. Expressions of interest for major project work have been issued and as an indication
of better trading conditions, an unaudited profit of $496,721 has been recorded for the two
months to 31st August 2000. The trend has continued in September.
OVERVIEW
FINANCIAL