Wintermar reports $5.43m loss
Friday, October 30 2015 - 10:14 AM WIB
IDX-listed shipping firm PT Wintermar Offshore Marine Tbk reported Friday a loss of US$5.43 million for the first nine months of this year (9M2015) as oil and gas activity continued to decline in the third quarter.
Wintermar said this is the company?s worst quarterly performance in its history. ?Because the high tier vessels which are the hardest hit are held in joint ventures, the minority interest shared $2.67 million of net loss for the nine month period under review, leaving a loss attributable to the shareholders of US$ 2.76 million,? it said in a statement.
The company said total revenue declined 42 percent to $76.4 million compared to the same nine-month period of the previous year.
Interest expenses fell by 23 percent year-on-year to $7.2million for 9M2015, because of debt repayment. EBITDA for the nine months period was US$23.1million, 59 percent less than the first nine months 2014.
Wintermar said despite the poor financial performance in the third quarter 2015 (3Q), there was more tendering activity in 3Q2015 than what the company had experienced in 2Q 2015. ?This is a good leading indicator of better utilization in the final quarter of the year.?
Meanwhile, operating profit for the first nine months of 2015 was $2.4million, a sharp fall of 93 percent from 9M2014, reflecting the combination of low utilization and price competition.
Total indirect expenses were down 17 percent for the period 9M2015 compared to 9M2014 mainly from not replacing staff who have resigned. ?We expect salaries and salary related cost to fall further in 4th quarter.?
?Our cost cutting measures have yielded results, as shown in the 13 percent fall YOY in crewing expenses to US$11.1 million for 9M2015,? Wintermar said.
However, the quarter on quarter (QOQ) comparison shows a steeper fall of 36 percent in crewing expenses from the second to third quarter.
Total direct expenses fell 22 percent to $65.9million in the 9M2015 as compared to the preceding year.
?Our owned vessel segment saw a 39 percent drop in revenue to $50.5million for 9M2015 compared to the previous year,? Wintermar said.
The average utilization rate was lower at 59 percent for the nine months compared to 61 percent for the first six months, ?reflecting a third quarter dip in utilization across our fleet to 51 percent.?
Margins were down to 16.5 percent for owned vessels in the nine-month period ending September 2015, compared to 48.9 percent for the corresponding period last year.
Revenues from the Chartering Division were halved in 9M2015 as compared to 9M2014, in line with the poor industry sentiment this year. However, the gross margins from chartering were able to hold up relatively well, Wintermar said.
The company explained that activity in the oil industry continued to reduce in the third quarter as the previous quarter saw very few tenders for projects. This led to lower utilization across the board. ?As a result of this, there was more competition from other vessels in available tenders and charter rates were lower for the new jobs secured in the quarter,? it said.
To prepare for the possibility of an extended period of low oil price, Wintermar has secured a US$10 million working capital line to anticipate potential cash requirements. ?We are taking action to downsize our shorebased teams and have implemented more stringent cost monitoring. There have been delays in the delivery of the remaining two vessels which were planned for 2015 to 2016, while the 2016 newbuilding has been postponed to 2017,? the company explained
?Our cost reduction efforts on direct costs have already slashed direct costs by 12 percent QOQ. Our balance sheet is relatively strong with net gearing at 64 percent which underpins our ability to ride out the downturn,? it added.
The company said it has been successful in tendering for some work recently. Total contracts on hand as at end September 2015 amount to $ 139 million.
Editing by Reiner Simanjuntak