Owned vessels
WINS' strategy of adding to higher value fleet has pushed owned vessel revenues up by 42%YOY in 9M2013, while margins on owned vessels expanded from 46% in the same period last year to 51% in the period under review. In line with stronger demand for offshore support vessels(OSV) in Indonesia this year following the rise in offshore exploration activities, WINS has revised up our fleet expansion to 12 new vessels against the original plan of only 8 new vessels. Furthermore, the strict implementation of the cabotage law since 1 January this year has limited the supply of available Indonesian flagged vessels, thus resulting in higher domestic charter rates.
By end September, WINS had taken delivery of 11 new vessels: 1 unit Platform Supply Vessel (PSV), 1 unit 5000BHP Anchor Handling Tug and Supply (AHTS), 4 units Fast Utility Vessels (FUVs), 4 units Anchor Handling Tug (AHT) and 1 unit Heavy Load Barge (HLB). In October WINS took delivery of another 1 unit of 8000BHP AHTS. The total capital expenditure was US$90million for the 12 vessels, which were financed by equity and bank debt. The sharp increase in revenue resulted in 9 months 2013 gross profit up by 64% to US$40.8million, as compared to US$ 24.9million in 2012.
Higher value vessels now account for 60% of our total fleet in numbers compared to 50% at the end of 2012. This reversal in fleet composition has also contributed to an improvement in gross profit margin for owned vessels to 51.0%. The average utilization rate remains at 75%. These results are the fruits of management strategy to increase the value added vessels in our fleet.
Chartered vessels
There has been a pick up in drilling activity in deep water concessions and this has led to an 82% jump in chartered vessel revenue in 9M2013 to US$54.5million compared to US$ 29.8million in the same period last year. The implementation of cabotage in 2013 has resulted in an improvement in gross margin from 5.4% to 6.2% this period, leading to a doubling of gross profit from chartering to US$3.4million in the first 9 months of 2013 compared to the same period in the previous year.
Gross Profit
The strong growth in owned as well as chartered vessel revenues this year has pushed our total gross profit for the first 9 months of 2013 to US$ 40.8 million, an increase of 64% from US$ 24.9 million last year. The strength in the US dollar exchange rate against the Indonesian Rupiah has also widened our margins as most of our personnel and head office costs are in Rupiah whereas our revenue and loans are all in US$. Gross margins were up in all segments of our business, leading to a blended gross margin of 31.2%, as compared to 29.3% in 9M2012.
Indirect expenses
Indirect expenses rose by 29%, largely from higher staff costs, marketing and professional fees. This is in line with our stated strategy to build up our operational capability to take on more high value vessels, through investing in human capital. Despite the cost increases, the strong growth of revenue outpaced the rise in costs, resulting in a rise in our operating margins to 25% from 22% for the same period in the previous year. At the operating level, profit increased by 75% from US$18.6million in 9M2012 to US$32.7million in 9M2013.
Other income/(expenses)
The higher capital expenditure associated with our increased fleet expansion plan was funded through internally generated cash as well as bank loans. Interest expenses therefore rose accordingly by 65% from US$ 3.2 million to US$ 5.8 million as loans were drawn down. During the 3rd quarter we sold an old vessel at a loss to raise cash for the reinvestment into our revised fleet expansion plan, therefore there was a loss in sale of fixed asset for the 9 months of US$ 1.1 million for the first 9 months of 2013, as compared to a gain of US$1.8million in 9M2012.
Net profit and EBITDA
Net Profit attributed to shareholders has increased by 27% yoy to US$ 18.3 million while EBITDA has risen by 60% from US$ 28.5 million last year to US$ 45.8 million this period.
Earnings per share for 9M2013 amounted to Rupiah equivalent of Rp 58 which is an increase of 25% from the previous corresponding period in 2012.
Total Assets and Gearing
The carrying value of our fleet amounts to US$ 281.5 million or 72% of total assets of US$ 390.4 million.
This reflects an increase of 15.2% year on year in total assets. The disbursement of loans to finance our investment in high value vessels has meant our Net Debt to Equity ratio at 30 September 2013 is 59% compared to 52% at year end 2012.
Outlook
Since the beginning of 2013, the demand for offshore support vessels(OSV) has been strong, particularly in the higher value OSV segment as the cabotage law has been strictly implemented in this segment. There is a high level of activity in deepwater drilling which feeds demand for higher value vessels, in particular vessels with Dynamic Positioning capability. However, as the industry is still at a very early exploration phase, the tenure of deepwater contracts is still short.
The limited supply of high value OSVs flying the Indonesian flag has led to firmer rates across the high value segment of the market, which are at a premium to global charter rates for the same class of vessels. There has admittedly been some delay in awards of longer term contracts due to the change in leadership at the upstream regulator, SKK Migas. However, we continue to be optimistic on the outlook for our business and our fleet expansion strategy is still very much on track.
Contracts
At 31 October 2013, the total value of contracts in hand is US$ 175 million.
About Wintermar Offshore Marine
PT Wintermar Offshore Marine Tbk (WINS) is an offshore marine services company that owns a fleet of over 64 vessels ready to handle a large variety of marine support services required in upstream oil and gas exploration and production activities including transporting crew, equipment and supplies, as well as providing services such as anchor handling, towing, and mooring of offshore rigs. Our young and growing fleet, comprising a wide variety of vessel types, enables us to offer innovative vessel and logistics solutions to serve our client base of multinational oil and gas companies. In 2011, WINS became the first shipping company in Indonesia to be certified with Integrated Management System by Lloyds Register Quality Assurance, comprising ISO 9001:2008 (Quality), ISO14001:2004 (Environment) and OHSAS 18001:2007 (Occupational Health and Safety). For more information, please visit www.wintermar.com .
Contact:
Ms Pek Swan Layanto
Wintermar Offshore Marine (WINS)
Investor Relations
investor_relations@wintermar.com
Editor: PR Wire
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