Wintermar Offshore Marine (WINS:JK) has announced results for 1H2021, achieving a gross profit of US$3.3 million for 1H2021, compared to gross loss of US$0.66 million for the same period last year, with fleet utilization recovering to 63%.
Utilization improved from 61% in 1Q2021 to 63% in 2Q2021 as oil prices climbed, bringing total revenue for 1H2021 to US$20.1 million, just 8% lower than 1H2020. Due to the cost control measures and streamlining of fleet carried out, total direct costs reduced by 26% thus producing a gross profit of US$3.3 million for 1H2021.
–Owned Vessel Division
Owned Vessel Revenue declined slightly by 3%YOY to US$16.7 million in 1H2021, but total direct costs for the division for 1H2021 fell sharply by 25% to US$14 million, thereby contributing US$2.7 million of Owned Vessel gross profit. The cost reduction was mainly due to the sale of vessels and a reorganization of the vessel management structure to reduce overheads.
–Chartering and Other Services
Although chartering revenue fell by 27% YOY to US$2.6 million for 1H2021, the Division still recorded a gross profit of US$0.36 million, up 22% YOY. Gross profit from other services fell by 32% YOY to US$0.22 million.
–Indirect Expenses and Operating Loss
Indirect expenses fell by 14% in 1H2021 to US$1.2 million compared to 1H2020, largely due to a 10% YOY drop in staff salary to US$1.8 million, as the number of employees declined as a result of a smaller fleet and cost efficiency measures. Office Utilities fell by 33% YOY as the Company implemented Work from Home for most of the past few months to reduce mobility in the pandemic. As tendering activity picked up, marketing costs in 1H2021 rose by 140% YOY to US$0.15 million.
The Company booked an operating profit of US$0.7 million for 1H2021, compared to a loss of US$3.7 million in 1H2020, reflecting a marked improvement in the industry environment this year.
–Other Income, Expenses and Net Attributable profit
Interest expenses were 37% lower in 1H2021 to US$1.2 million as the Company has continued to pay down debt. Associated companies turned in a very small loss, but there was a gain of US$1 million from the sale of vessels. Profit before tax for 1H2021 amounted to US$0.35 million compared to a loss of US$4.2 million in 1H2020.
Net income before tax for 1H2021 was US$0.35 million, compared to a loss of US$4.2 million in 1H2021. After tax and minorities, the net loss attributable to Shareholders amounted to US$0.56 million compared to US$4.0 million loss attributable to shareholders in 1H2020.
EBITDA for 1H2021 also rose by 11% YOY to US$7.4 million.
–Oil & Gas Industry
Since the beginning of 2021, the oil price has consistently trended up, providing strong support for the offshore industry. Although the delta variant of the coronavirus has presented challenges for many countries, the rising vaccination rates around the world have also brought mobility. The gradual opening up of economies again has added to the demand for oil and gas, prompting offshore oil and gas projects to commence, with some energy industry experts are projecting a shortage of supply coming up due to the declining productivity of existing oilfields.
Since early 2021 there has been a rising trend for offshore activity, with more tenders being issued. This can be seen in higher utilization rates and charter rates in most offshore vessel segments.
Most vessel operators are seeing better utilization as a result. However, the delta variant which has spread globally has caused some disruptions to operations, as COVID19 infections suddenly spiked in June and July. Although this will have a short term impact on vessel utilization, the longer term outlook still remains more positive.
–Strategy and Outlook
In recent months, there has been an increase in new proposals as the outlook for offshore vessels continues to look more favourable for the years ahead. Offshore Wind is an industry which is expected to see a sharp rise in investment, with Taiwan leading the Asian investments in this new field.
The Company is considering several proposals at the moment and is planning to start investment in new assets to grow the business. One of the strategies is to continue selling some vessels and keep a more focused fleet, while managing the gearing and cash flow.
The Company has proposed an issuance of non pre-emptive shares to be approved at the upcoming AGM on 19th August 2021, to provide the flexibility to raise some equity should the opportunity to invest arise.
In addition, the Company continues to build up ship management capability through investment into software and digitization of processes to provide more cost efficiency and better controls. With these capabilities, the Company will be able to grow the third party ship management business to provide more fee based income without heavy capital investment.
Contracts on hand as at end July 2021 totalled US$69 million.
About Wintermar Offshore Marine Group
Wintermar Offshore Marine Group (WINS.JK), developed over nearly 50 years with a track record of quality that is both a source of pride and responsibility that we are dedicated to upholding, and sails a fleet of more than 48 Offshore Support Vessels ready for long term as well as spot charters. All vessels are operated by an experienced Indonesian crew, tracked by satellite systems and monitored in real-time by shore-based Vessel Teams.
Wintermar is the first shipping company in Indonesia to be certified with an Integrated Management System by Lloyd’s Register Quality Assurance, and is currently certified with ISO 9001:2015 (Quality), ISO14001:2015 (Environment) and OHSAS 18001:2007 (Occupational Health and Safety). For more information, please visit www.wintermar.com.
Ms. Pek Swan Layanto, CFA
PT Wintermar Offshore Marine Tbk
Tel +62-21 530 5201 Ext 401