Wintermar suffers $1.4m loss in Q1 2016

By Ruli Setiawan

IDX-listed offshore oil and gas service provider PT Wintermar Offshore Marine Tbk announced on Friday a loss of US$1.4 million in the first quarter of the year (Q1 2016), citing losses on sale of vessels as the reason.

?Because of the book losses on sale of vessels, there was a loss of US$1.4million attributable to shareholders,? the firm said in a statement filed with the Indonesian Stock Exchange.

In line with the strategy to raise cash and reduce financial risk of the company, there were two vessels sold in Q1 2016, resulting in a book loss of US$1.9 million from sale of fixed assets. This was partially offset by a turnaround in equity in net earnings of associated companies, which recorded a profit of $0.5 million compared with a loss of $0.17 million in Q1 2015, the firm said.

Gross profit was $4.6million for Q1 2016, 16 percent lower year on year (yoy) but it was a significant improvement on the gross profit of $2.2million in the previous quarter (Q4 2015).

Tighter cost control and a hiring freeze resulted in a 31 percent yoy fall in indirect expenses for Q1 2016 with salary related expenses contributing to more than half of the reduction in indirect expenses.

As a result, operating profit rose 3 percent to $2.6million in the Q1 2016 compared to Q1 2015.

Interest expenses fell 7 percent yoy to US$2.3million as a result of net debt reduction as the company continued to pay down debt over the past 12 months.

EBITDA rose 3 percent yoy to $9.4million despite revenue falling over the same period last year, reflecting tighter cost control amidst the difficult industry environment. However, if compared to the last quarter of 2015, EBITDA actually increased by 28 percent from $7.6million.

Owned Vessels
Depressed oil prices continued to impact the oil and gas industry in Q1 2016 as intensified price competition pushed down charter rates. This resulted in a 19 percent yoy fall in revenue to $15.4million for the Owned Vessel division.

Although utilization at 57 percent in Q1 2016 was lower than the 61 percent achieved in the same period the previous year, it was an improvement compared to Q4 2015 where the quarterly utilization was lowest at 53 percent. The better utilization in 2016 compared to the final quarter in 2015 was due to some increased activity which saw the commencement of operations for a few high tier vessels which had been idle most of the past year.

Chartering
Chartering Division revenues remained flat in Q1 2016 compared to the same period the previous year, but margins were slightly better, resulting in a 7 percent increase in gross profit to $0.8million.

Other revenue
Due to the completion of a one off project, during Q1 2016, other revenue fell to $194,000 from $2.9million in Q1 2015. However, contribution from this Division is small, falling to $195,000 from $234,000 over the same period last year.

Direct expenses
Depreciation rose by 3 percent yoy for Q1 2016 because of two new vessels in the firm?s fleet during the past 12 months, the latest addition being a mid-tier AHT vessel that joined the firm?s fleet in Q1 2016. Although direct costs in our owned vessel division are generally fixed in nature, the measures taken to reduce our cost base succeeded in bringing down direct vessel costs by 19 percent yoy to $11.8 million, despite having more vessels. This was largely due to a fall of 36 percent yoy in crewing costs, the largest component of direct cash costs, in Q1 2016. The gross margin was the same at 23.3 percent for Q1 2016 compared to a year ago.

Editing by Johannes Simbolon