Wintermar Offshore Marine (WINS:JK) has announced results for 9M2022. Total revenue for 9M2022 jumps by 38%YOY to US$41.6 million, while gross profit grew 29%YOY to US$5.3 million. Improvement in Owned Vessel revenues and strong contribution from our Chartering Division produced a stronger performance in 3Q2022.
Owned Vessel Division
During 3Q2022, several mid and high tier vessels commenced operations for projects in Indonesia and Brunei. This contributed to a rise in fleet utilization in 3Q2022 to 76% compared to 70% for 2Q2022 and only 61% in 1Q2022. Owned vessel revenue for 3Q2022 grew by 24.3%QOQ, while direct expenses only rose by 13.3%QOQ, leading to a higher gross margin of 18.1% in 3Q2022 compared to 10.1% in 2Q2022. This division recorded gross profit of US$1.77 million for 3Q2022 which was 122.4% higher QOQ as compared to 2Q2022.
For 9M2022, total Owned Vessel Direct expenses rise by 3% against a 1% fall in revenue, leading to a 29%YOY decline in gross profit to US$2 million compared to 9M2021, mainly from the poor conditions in 1Q2022 and higher fuel costs arising from the demobilization of a vessel returning from work in Africa.
Chartering and Other Services
The Chartering Division continued to provide a strong contribution to gross profit of US$1.5 million for 9M2022, which more than doubled, rising 129%YOY as compared to US$0.66 million in 9M2021. As business activity picked up, revenues from Other Services also jumped to US$4.4 million for 9M2022, +176%YOY from US$1.6 million in 9M2021, contributing US$1.8 million to gross profit for 9M2022.
The increase in fee-based incomes from Chartering and Other Services reflects the management strategy to leverage on the ship management strength of the Company and reduce reliance on capital intensive sources of income.
Total Gross Profit for 9M2022 was US$5.3 million, a 29%YOY increase from 9M2021.
Indirect Expenses and Operating Profit
Indirect Expenses for 9M2022 were 19%YOY higher at US$4.7 million. This was primarily due to higher salary expenses from the lifting of a hiring freeze over the past two years during the pandemic and the reinstatement of salaries for directors and senior management who had voluntary salary cuts from the past two years.
Operating Profit for 9M2022 was 290%YOY higher at US$0.6 million, reflecting the recovery of the underlying business.
Other Income, Expenses and Net Attributable profit
As total loans continued to be paid down, interest expenses fell by 36%YOY to US$1.1 million, while equity in net earnings of associates doubled to US$0.5 million for the 9M2022 period.
At the attributable level, the Company recorded a net loss attributable to shareholders of US$2.1 million for 9M2022 compared to a loss of US$0.1 million in 9M2021. This resulted from the sale of vessel during the quarter resulting in a loss on sale of fixed asset of US$2.6 million.
EBITDA for 9M2022 was US$9.8million, -4%YOY as compared to 9M2021.
Outlook for Oil and Gas Exploration
The third quarter has seen a marked increase in oil and gas activity globally. The rising tensions between Ukraine and Russia have heightened the risks of disruption to energy supply, and energy security has risen in priority as a topic of concern for most countries.
In Indonesia, several projects commenced in Sumatra, the Natuna sea, Makassar Straits and Papua. SKK Migas revealed that out of their plan for 42 exploration wells and 790 development wells to be drilled in 2022, only 43% was realized by June 2022. The higher oil price seems to be creating some urgency to catch up with the plan. Globally, the Middle East and Africa have been the most active in contracting for offshore rigs. There has been an increase in demand for larger numbers of high tier OSVs like PSVs and AHTS, as larger drilling campaigns are being planned. In the Middle East, there seems to be a structural shift from onshore to offshore production as new reserves are sought.
As demand for Offshore Support Vessels (OSVs) has risen steadily while operationally ready OSVs worldwide are not easily available, the management is optimistic that charter rates will continue to rise through 2023. In 3Q2022 contracts on hand have risen as a result of new contracts secured in Indonesia, Brunei and Thailand. By 4Q2022, two more of the recently purchased vessels are expected to be ready for work, while the remaining two PSVs are still undergoing refitting and reactivation until early 2023. As the net gearing is now below 11%, management will seek funding to continue purchasing assets to ride the upturn in the cycle.
Contracts on hand as at end September 2022 totaled US$65.9 million.
About Wintermar Offshore Marine Group
Wintermar Offshore Marine Group (WINS.JK), developed over nearly 50 years with a track record of quality that is both a source of pride and responsibility that we are dedicated to upholding, and sails a fleet of more than 48 Offshore Support Vessels ready for long term as well as spot charters. All vessels are operated by experienced Indonesian crew, tracked by satellite systems and monitored in real-time by shore-based Vessel Teams.
Wintermar is the first shipping company in Indonesia to be certified with an Integrated Management System by Lloyd’s Register Quality Assurance, and is currently certified with ISO 9001:2015 (Quality), ISO14001:2015 (Environment) and OHSAS 18001:2007 (Occupational Health and Safety). For more information, please visit www.wintermar.com.
For further information, please contact:
Ms. Pek Swan Layanto, CFA
PT Wintermar Offshore Marine Tbk
Tel (62-21) 530 5201 Ext 401