Wintermar?s net profit returns to positive

By Romel S. Gurky

IDX-listed shipping firm PT Wintermar Offshore Marine Tbk (WINS) said that net profit in the third quarter (3Q2017) of this year returned to positive territory at US$1.56 million on the back of higher quarterly revenue of $14.7million and fleet utilization of 58 percent for the quarter compared to 56 percent in 3Q2016.

Wintermar said in a statement on Monday a sustained rise in fleet utilization for third quarter 2017 boosted revenue for 3Q2017, which grew 12 percent quarter-on-quarter to $15.3million. Gross Profit returned to the black in 3Q2017, making YTD gross profit of US$0.5million for the first 9 months of the year.

Revenue for the nine months ended 30 September 2017 was $44million. The upturn in 3Q 2017 was contributed by drilling projects in Indonesia and Papua New Guinea, the company said.

Activity has improved gradually over the course of the year, particularly in the mid and higher tier vessel segments which are involved in some deeper water development and production areas.

?Revenue has risen steadily each quarter so far for 2017, indicating the worst may be over,? Wintermar said. However, total Owned Vessel revenue for the first 9 months of 2017 was still down by 28 percent to $33.8million compared to $47.2million in the same period in 2016. Direct expenses for Owned Vessels was down by 7 percent for 9M2017 compared to 9M2016, as higher maintenance and operations costs related to preparing vessels for new contracts offset the lower crew and fuel costs.

As our vessels start to take on more work, we expect to be incurring higher direct expenses as vessels which were idle are now working with a full crew, and various certifications of equipment and sea trials have to be undertaken to fulfill our clients? pre-operations requirements.

On a Quarter on Quarter basis however, Direct Expenses for 3Q2017 were still slightly lower than the previous quarter which incorporated Ramadan bonuses that were paid in June.

The Owned Vessels Division recorded a gross loss of $ 0.8million for 9M2017 compared to a gross profit of $10.2million in 9M2016, but it was an improvement compared to a gross loss of $2.2million recorded for the first half of 2017.

Chartering revenue continued to fall, with only $7.3million revenue and $765,000 profit from this division for 9M2017, compared to a gross profit of $2.4million in 9M2016, although margins remained steady. ?We are hopeful that a continued recovery in utilization will eventually also benefit our chartering business.?

For the 9 months of 2017, the total gross profit was $0.51million compared to $13.5million in 9M2016. However, the quarterly trend has shown steady improvement in profitability in 3Q2017.

Total indirect expenses fell by 14 percent YOY to $5.4million for 9M2017, with the largest reduction in recorded in staff costs which fell 23 percent YOY to $3.2million for 9M2017, contributed by a selective hiring policy and management reduction in the number of senior and expatriate personnel. Marketing expenses also fell by 40 percent to $246,000.

Total other expenses for 9M2017 fell to $7.5million compared to $21.2million in expenses for the same period last year, largely owing to the absence of any large asset impairment in 2017 compared to impairment of $13.2million undertaken last year in 3Q2016. ?Earnings from associates remained negative with a loss of $0.7million for 9M2017 compared to a gain of $0.6million in 9M2016 as our associate companies were also affected by the poor industry fundamentals.?

EBITDA jumped by 64 percent in 3Q2017 to $6.6million compared to $4.4million in 2Q2017. For the nine months ended 30th September 2017, EBITDA totaled $15.5million.

Interest costs fell 11 percent to $5.8million for the first nine months of 2017 compared to the same period last year, as the company continued to pay down our debt. Net gearing remains conservative at 49 percent.

Wintermar said there was a sharp improvement in the quarterly trend as net loss attributable to shareholders for 3Q2017 narrowed to $1million compared to $4.7million for 2Q2016.

For 9M2017, total net loss attributable to shareholders was $9.7million, a YOY drop of 29 percent compared to the net loss of $7.5million attributable to shareholders in 9M2016.

Editing by Reiner Simanjuntak