Wintermar?s revenue drops 38%
Tuesday, August 4 2015 - 01:58 AM WIB
IDX-listed shipping company PT Wintermar Offshore Marine Tbk (WINS) said revenue fell 38 percent to US$53.8million in the first-half of this year (1H2015) compared to corresponding period of last year, impacted by aggressive cost cutting in the oil and gas industry globally.
The company said that the aggressive cost cutting in oil and gas industry dragged down vessel utilization and margins in the second quarter of this year (2Q2015).
?Our high tier fleet which was more exposed to exploration and development projects in Indonesia suffered disproportionately as exploration projects were the worst hit. Through mobilizing our international marketing network, we were able to deploy some vessels in regional markets, which mitigated the slide in utilization,? WINS said in a statement last week.
?However, overseas spot contracts typically provide lower margins as there are additional costs to fulfill other regulatory requirements as well as agency fees and broker commissions,? it added
The company said owned vessel utilization for 1H2015 was 61 percent compared to 73 percent in 1H2014, whilst gross margins for the division fell to 20.5 percent compared to 53 percent the previous year.
?There was a scarcity of contracts being tendered in 2Q2015. The whole industry contracted globally and sentiment was at its low in line with the lack of visibility on oil price trends,? WINS said.
The firm said revenues and gross profit from its Chartering Division were also badly affected, falling 55 percent and 59 percent year-on-year (YOY) respectively.
WINS said that as a result of the sharp downturn, the management embarked on a cost reduction program. This included cold- stacking of lower tier vessels which had been earmarked for sale, while warm-stacking mid and high tier vessels to reduce crew and fuel expenses.
As a result of these initiatives total direct expenses for Owned Vessels fell 15 percent in 1H2015 as compared to the preceding semester, 2H2014, WINS said.
Total indirect expenses were down 20 percent YOY from US$6.96million in 1H2014 to US$5.55million in 1H2015, primarily from a 24 percent fall in staff expenses.
?Due to the capital intensive nature of our business, there is a limit to the scope of cost reduction possible without affecting the quality of the assets and service that we provide,? WINS said.
Therefore operating profit was still 88 percent lower at US$3.23 million compared to the previous year. Operational gearing is high and any recovery in revenues when the industry recovers will flow through to our bottom line.
Although indirect expenses fell 20 percent and total other expenses fell by 30 percent to US$4.59million compared to US$6.55million in 1H2014, these cost savings were insufficient to offset the sharp drop in revenues experienced this year. For the first half of 2015, the company recorded a net loss attributable to shareholders of US$ 0.66million compared to a profit of US$12.82million in 1H2014.
EBITDA for 1H2015 was US$17.05million compared to US$39.4million in the same period the previous year.
Interest expenses fell by 16 percent to US$4.92million as there were no new loans disbursed in 1H2015 whereas we repaid US$18.6 million in loan principal during the first half 2015. Net gearing was 60 percent as at 30th June 2015 compared to end December 2014 was 67 percent.
There were no new vessels acquired in the first half but the company h taken delivery of a new 6000 BHP AHTS vessel in July 2015. This vessel will be marketed in Indonesia as well as regionally. ?We have 2 more vessels to be delivered before the end of the year. This represents a scaled down capex plan of US$31million for the year. Bank financing for these three vessels has been secured,? WINS said.
Total contracts on hand as at end June 2015 amount to US$150million, the company added.
Editing by Reiner Simanjuntak