Wintermar Offshore Reports 1Q2023 Results

JAKARTA, Apr 27, 2023 - (ACN Newswire) - PT Wintermar Offshore Marine Tbk (WINS:JK) has announced results for 1Q2023. Operating Profit rebound to US$1.6 million from a loss of US$1.4 million in 1Q2022 after strong increase in Revenues. Stronger charter rates contributed to the 51%YOY increase in total revenue to US$15.9 million and gross profit of US$3.0 million for 1Q2023.

Owned Vessel Division

During the first quarter of 2023, charter rates were higher, boosting Owned Vessel revenue by 46%YOY to US$9.7 million, and generating a turnaround in the division with a positive gross profit of US$1.7 million for 1Q2023 compared to a loss of US$0.6 million for 1Q2022. Quarterly utilization for 1Q2023 was 67%, higher than 61% in 1Q2022, but lower than the high utilization of 82% in 4Q2022, as several longer-term contracts completed in 1Q2023 and vessels underwent interim maintenance while being prepared for new contracts.

Direct Expenses were 10.6% higher, mainly due to higher maintenance (+154.4%YOY) and operations (+30.6% YOY) costs for parts and consumables. Depreciation was slightly lower at US$3 million (-2.5%YOY) as some of the additional vessels were not yet activated. Crewing costs rose by 2.6%YOY to US$2.1 million for 1Q2023.

Chartering and Other Services

Gross Profit from the Chartering Division rose by 16.6% YOY to US$0.4 million while Gross Profit from Other Services rose by 124.9% to US$0.9 million as demand for ancillary services also improved.

Total Gross Profit jumped to US$3.0 million for 1Q2023, compared to only US$0.2 million in 1Q2022, reflecting more robust conditions in the industry.

Indirect Expenses and Operating Profit

During 1Q2023, total Indirect Expenses fell by 9.4%YOY to US$1.4 million. Staff salaries increased by 5.1%YOY due to new hires during 2022 after a hiring freeze ended during the COVID-19 pandemic. However, this was offset by lower employee benefit expenses as actuarial liabilities were adjusted to comply with the new Omnibus law. Office utilities rose 39%YOY to US$0.1 million as most employees returned to work in the office compared to 1Q2022 where employees were still working from home.

Operating Profit saw a convincing turnaround for 1Q2023 at US$1.6 million, compared to a loss of US$1.4 million in 1Q2022.

Other Income, Expenses and Net Attributable Profit

The better operating conditions has contributed to higher cash flow as EBITDA saw a sharp increase to US$4.6 million in 1Q2023 from US$1.7 million in 1Q2022.

As the Company's borrowings fell to US$16.1 million by 31 March 2023 compared to US$24.3 million at end March 2022, net interest expenses continued to fall by 28.6%YOY to US$0.26 million.

Associate companies recorded a loss of US$ 0.4 million, from the cost of preparing an additional vessel for operations. For 1Q2023, Total Net Income before tax and minorities stood at US$0.85 million compared to a loss of US$2.0 million for 1Q2022.

Net Attributable Profit to Parent Entity for 1Q2023 amounted to US$0.18 million compared to a loss of US$1.8 million for the same period in 2022.

Business Outlook

OPEC+ members announced a voluntary production cut beginning from May 2023 to the end of the year, indicating that oil prices should remain firm. This confirms the positive outlook for oil and gas exploration as more new projects are being announced.

There has been an increase in optimism in upstream activities in Asia where more drilling projects are being approved. During the first quarter there were several new requests for proposals in the region, including in Brunei, Thailand, Malaysia as well as Indonesia. Charter rates are rising as demand for OSVs has picked up while supply has been stagnant.

Rystad Energy has estimated that South East Asian upstream investments will grow by 10% in 2023 and 15% in 2024, largely in offshore fields. This is positive for our fleet expansion strategy.

Fleet utilization fell in 1Q2023 because some vessels have come off longer term contracts when charter rates were lower. The Company will be looking to deploy these in contracts with higher charter rates in the coming months.

Contracts on hand as at end March 2023 amounted to US$72 million.

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