WINS reports 34% rise in net profit

By Romel S. Gurky

IDX-listed PT Wintermar Offshore Marin Tbk (WINS) said that net profit attributed to shareholders in 2013 increased by 34 percent to US$27 million year-on-year (YOY) as fleet expansion during the year boosted revenue from owned vessels.

WINS said in a statement obtained Tuesday that accelerated fleet expansion in 2013 drove gross profit from owned vessels up by 71 percent YOY to $51.4million on revenue growth of 50 percent.

Rising charter rates and the strength of the US dollar against the rupiah underpinned expansion in an environment of strong demand vessels, the company said. A total of 12 vessels were delivered, 7 in the first half and 5 in the second half of the year, adding up to $90 million of total capex.

New vessels comprised : 1 unit Platform Supply Vessel, 1 unit 8000 BHP AHTS, 1 unit 5000 BHP AHTS, 1 unit Heavy Load barge, 4 units Fast utility vessels and 4 units Anchor Handling Tugs.

WINS explained that cabotage implementation in 2013 for offshore operations support vessels of 5000 BHP and higher, including Platform Support Vessels and Dynamic Positioning vessels, ?means that all our fleet is now fully covered under the cabotage law.?

Domestic rates have therefore risen vis a vis international rates as supply of Indonesian flagged vessels has become restricted.

?Higher demand for deepwater drilling has also contributed to a pickup in our chartering business, which has seen a 71 percent jump in revenues to $78.1 million and nearly doubling of profit to $5.2million for FY2013,? WINS said.

?However, these contracts are mainly on short term tenures given the high proportion of exploration activity, and we are not expecting the same growth in 2014 as we focus our efforts on our new owned vessel fleet. The implementation of cabotage in 2013 has also reduced the number of vessels available for chartering,? it added.

Indirect costs saw more modest growth of 31 percent to US$11million, mainly from personnel related costs. ?However, the increase in indirect cost was more than offset by higher gross profit, resulting in a 76 percent YOY jump in operating profit to $46.7million,? it said.

?The combination of higher exploration activity and the strict implementation of cabotage in 2013 led to strong growth in all areas of our business, and margin expansion. We continue to be optimistic about the longer term trend of offshore oil and gas in Indonesia as several larger development projects are due to start in the coming months,? WINS said.

There have also been more foreign vessels reflagged into Indonesian flag which supports the longer term viability of the Indonesian deepwater drilling industry. There continues to be strong activity in deepwater drilling which feeds demand for higher value vessels, in particular vessels with Dynamic Positioning capability, it added.

Although most of the contract tenures for deepwater vessels are still short because most are engaged in exploration work, the commencement of some larger development projects willbe very welcome news for the industry.

The limited supply of high value OSVs flying the Indonesian flag has led to firmer rates across the high value segment of the market, which are at a premium to global charter rates for the same class of vessels.

?There has admittedly been some delay in awards of longer term tenures. However, we continue to be optimistic on the outlook for our business and our fleet expansion strategy is still very much on track.?

Editing by Reiner Simanjuntak