Wintermar Offshore Marine Reports 1Q2022 Results; Total revenue up 3%

Wintermar Offshore Marine (WINS:JK) has announced results for 1Q2022. Total revenue was up 3% YOY to US$10.5 million, with stronger chartering revenues compensating for a drop in Owned Vessel revenue from COVID-19 delays.

Oil prices spiked in 1Q2022 as a result of the war in Ukraine and sanctions against Russian oil and gas. The ensuing oil shortage sparked a rise in investment in oil exploration and a resurgence in drilling programs in Asia.

The Company was impacted quite severely by a spike in Omicron infections on the fleet, which led to prolonged delays in the commencement of operations in international as well as domestic charters in 1Q2022. Owned Vessel revenues declined but this was compensated by a jump in revenues from the Chartering and Other Services Divisions.

Owned Vessel Division

Several vessels were infected with COVID-19 in 1Q2022 and had to be quarantined. Emergency crew changes were arranged, but revenues were penalized due to the resulting delays while higher costs were incurred as vessels had been fully crewed in anticipation of on-hire. Crew salary was flat YOY at US$2.1million, operations and maintenance costs rising by 40%YOY and 23%YOY respectively in preparation for new contracts. Fuel was significantly higher at US$0.67 million due to the one-off cost of international mobilization and demobilization of vessels due to different locations for on- and off-hire. This led to a 21% YOY decline in Owned Vessel revenue to US$6.6 million, while direct costs rose by 10% YOY.

During the quarter, the Company purchased an additional 4 vessels, comprising one PSV, 2 units of 5,000 BHP AHTS and 1 unit of 6,000 BHP AHTS. Two of these vessels are being modified for reactivation while the other two are finishing off existing contracts and providing some charter income. As 4 of the 6 vessels acquired since 4Q2021 were undergoing docking and reactivation in 1Q2022, there are no revenues arising whereas costs have started to incur. All these reasons led to a gross loss of US$0.58 million from the Owned Vessel Division.

Chartering and Other Services

Gross Profit from Chartering jumped by 260% YOY to US$0.37 million with the addition of three new contracts in Brunei, while Other Services Division saw a 49% increase in gross profit to US$0.38 million.

Total Gross Profit for 1Q2022 was US$0.18 million compared to US$2.1 million in 1Q2021.

Indirect Expenses and Operating Profit

The biggest contribution to a rise in Indirect Expenses was a rise in staff salaries which increased by 47% due to the annual discretionary bonuses paid out in March, and an increase in staffing. The Company also readjusted salaries in 2021 to reverse most of the salary reductions volunteered by employees when the COVID-19 started in 2020. With the increase in indirect expenses, the Company recorded an Operating Loss of US$1.18 million.

Other Income, Expenses and Net Attributable profit

Interest expenses fell by 51% YOY to US$0.36 million in line with much lower gearing while the stronger Rupiah also resulted in an FX loss of US$0.03 million. Loss in earnings of associate amounted to US$0.07 million after recording a small profit in 1Q2021 while there was a tax penalty of US$0.15 million in a subsidiary.

Net loss attributable to shareholders for 1Q2022 was US$1.8 million compared to a loss of US$0.34 million in 1Q2021. EBITDA for the quarter was US$1.7 million from US$4.3 million in 1Q2021.

Outlook for Oil and Gas exploration

After the sharp spike, releases of strategic oil reserves by the US and downward revisions to 2022 oil demand arising from COVID-19 lockdowns in China have taken some pressure off oil prices. With Brent crude oil prices settling around the US$100/barrel mark, and sanctions against Russian oil, there is still a huge incentive for oil exploration. In Asia, there is stronger demand for oil services as new drilling projects have been announced. In Indonesia, Pertamina has announced a plan to drill 29 exploration wells and 813 development wells in 2022 while private oil companies are also planning drilling campaigns.

In 2021, global offshore investment in EPC (Exploration, procurement and construction) grew by 200% YOY to US$42 billion and with the Ukraine invasion, 2022 is expected to see further growth. Below is a chart from Westwood Global Energy projecting sustained higher levels of global offshore investment.

Strategy and Outlook

The Company embarked on a capital expenditure plan in 4Q2021 and to date has acquired a total of 6 vessels ranging from 5000BHP AHTS to Platform Supply Vessels. After docking and reactivation, these vessels will be ready for operations in mid 2Q2022, in time for an anticipated pick up in demand as drilling campaigns start by mid 2022.

In Asia, there are projects starting in Thailand, Malaysia, Brunei and India which require higher value support vessels. Charter rates are still constrained in Indonesia due to low budgets set last year, but some projects which were delayed are now expected to commence operations in the coming months. We are optimistic that the long awaited recovery in drilling is underway.

Contracts on hand as at the end March 2022 totalled US$64 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 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
Investor Relations
PT Wintermar Offshore Marine Tbk
T: (62-21) 530 5201 Ext 401
E: investor_relations@wintermar.com

DISCLAIMER
Certain statements made in this publication involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. Certain statements relating to business and operations of PT Wintermar Offshore Marine Tbk and Subsidiaries (the Company) are based on management’s expectations, estimates and projections. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such statements. The information contained in this release is not intended to qualify, supplement or amend information disclosed under corporate and securities legislation of any jurisdiction applicable to the Company and should not be relied upon for the purpose of making investment decisions concerning any securities of the Company.






Topic: Press release summary

Wintermar Offshore (WINS:JK) Reports Turnaround 9M2021 Results

Wintermar Offshore Marine (WINS:JK) has announced turnaround results for 9M2021 with a net profit of US$0.49 million following a loss of US$7.44 mil in 9M2020.

Stronger oil prices and measures to streamline the fleet and reduce gearing helped in turning the Company around after several years of heavy losses. In line with the positive outlook for oil prices, utilization also improved to 66% in 9M2021 compared to 63% in 9M2020.

Owned Vessel Division

Owned Vessel Revenue for 9M2021 was reduced by US$0.2 million to US$24.4 million compared to 9M2020. During July and August, the delta variant of COVID-19 hit Indonesia hard and affected our operations in Asia. A few of our vessels were infected while crew change was delayed due to quarantine and travel restrictions, leading to unplanned downtime. This and the completion of some high end vessel contracts led to a lower margin for 3Q2021. However, since September the pandemic has waned significantly in Indonesia and business operations have recovered back to normal.

Despite the disruption from COVID-19, due to a much lower cost base and a smaller fleet, the Company made a US$4.1 mil gross profit this year for 9M2021 compared to a loss of US$2 million in 9M2020 on nearly the same revenue. Fuel costs rose to 37% as some high tier vessels were idle between contracts.

Chartering and Other Services

Contribution from the Chartering Division in 9M2021 jumped by 64% YoY from US$0.4 million to US$0.66 mil while contribution from other services also jumped 85% YOY to US$0.62 million in 9M2021 from US$0.34 million in 9M2020. These reflect the underlying improvements in offshore vessel demand.

Indirect Expenses and Operating Profit

Indirect expenses totaled US$3.92 million in 9M2021, falling 13% YOY from US$4.5 million, reflecting a much leaner organizational structure with lower overheads as compared to 2020. This has resulted from the fleet efficiency exercise over the past couple of years to sell less efficient vessels and reduce overheads. 9M2021 operating profit amounted to US$0.15 million.

Other Income, Expenses and Net Attributable profit

Since January 2021, the Company has sold 3 vessels and has already entered into a MOA to sell another three, registering in a US$2.4 million gain on sale of vessels. The total fleet now stands at 40 vessels. A total of US$9.5 million in vessel loans was repaid, bringing the Company’s net gearing down to 21.7% by end September 2021. Interest expenses for 9M2021 fell by 33% YOY to U$1.66 million in line with lower debt. Associated Companies generated income of US$0.24 million due to better operational results, bringing the other income to US$0.79 million for 9M2021 compared to a loss in 9M2020.

The stronger operational environment has boosted the bottom line, with net income attributable to shareholders of US$0.49 million for 9M2021, as compared to a US$7.44 million loss.

EBITDA for 9M2021 also rose by 13% YOY to US$10.2 million.

Oil & Gas Industry

As expected, the opening up of travel restrictions across the world has led to a spike in oil prices as supply has not been able to keep pace with growing demand for oil and gas. Global oil demand is expected to recover to pre-virus levels in 2H2022 and the 3rd quarter saw Brent crude oil prices breaking above US$85/barrel, levels not seen since 2014. This reflects the optimism in the oil and gas industry which has finally shown a cyclical recovery. In Indonesia, there are tenders for drilling projects due to start in early 2022.

Offshore Vessels

In line with the oil price spike, there has been an increase in purchases of second hand offshore vessels, and prices have turned around as vessels which had been on offer for a while were bought up. The international rig count has also picked up as more investments have commenced. This is in line with our optimistic outlook for the industry in 2022.

Strategy and Outlook

Over the past few months, the Company has stepped up the sale of older and less productive vessels to take advantage of the improvement in second hand OSV prices. The fleet now stands at 40 vessels, and more are planned to be sold in 4Q2021. This strategy to reduce bank debt as well as keep some cash on hand has created a stronger balance sheet. As banks are still reluctant to lend for vessel acquisition, the Company now has the flexibility to acquire assets as and when the opportunity arises without having to wait for bank loan approval.

Contracts on hand as at end September 2021 totalled US$64 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 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
Investor Relations
PT Wintermar Offshore Marine Tbk
Tel +62-21 530 5201 Ext 401
Email: investor_relations@wintermar.com


Topic: Earnings

Wintermar Offshore (WINS:JK) Reports 1H2021 Results

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.

–Offshore Vessels

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
Investor Relations
PT Wintermar Offshore Marine Tbk
Tel +62-21 530 5201 Ext 401
Email: investor_relations@wintermar.com


Topic: Earnings