PT Wintermar Offshore Marine Tbk (WINS:JK) reported US$5 million Gross Profit and US$2.2million Net Attributable Profit for 1Q2024, driven by Owned Vessels gross margin expansion.
Total Gross Profit increased 66.8%YOY to US$5.0 million for 1Q2024 as compared to US$3 million in 1Q2023, while total revenues were 16.3% YOY higher at US$18.4 million compared to 1Q2023. Higher charter rates resulted in a widening of gross margins from the Owned Vessel Division.
Owned Vessel Division
In 1Q2024, Owned Vessel gross profit experienced an increase to US$3.9 million (+129.4% YOY) as compared to 1Q2023, generated from revenues of US$14 million (+44.6% YOY). This was achieved despite only a modest rise in fleet utilization from 67% in 1Q2023 to 69% in 1Q2024, because of rising charter rates and additional revenue from vessels acquired in 2022 and 2023 coming onstream.
If compared to the previous quarter, revenue from Owned vessels fell by 8% for 1Q2024 compared to 4Q2023, as some vessels came off spot contracts, reflecting the short term nature of the projects in operation at the present moment. However, gross profit was maintained at US$3.9million (-1%QOQ) compared to US$4million in 4Q2023, as the effect of wider margins arising from better charter rates for Spot contracts offset the lower utilization.
Owned Vessel Direct expenses increased by 26.4% YOY to US$10.1 million for 1Q2024, primarily driven by a higher number of operational vessels as compared to 1Q2023. The biggest increases were in maintenance expenses which rose +104.2% YOY to US$2.4 million, and crewing expenses of US$2.5 million (+17.9% YOY). Apart from a higher number of vessels, maintenance costs were higher due to the preparation of several vessels for overseas operations. Crewing costs have risen in line with the increased number crew and vessels operating internationally, necessitating a higher crew cost to meet charter requirements. Additionally, depreciation expenses climbed to US$3.5 million, up 17.2% YOY, reflecting the growth in fleet size.
Chartering Division and Other Services
Chartering Division saw a 25.3% YOY decline in revenue to US$ 3.0 million for 1Q2024 compared to 1Q2023, as two vessels which were previously chartered were purchased last year and are now reflected in Owned Vessel Division. Gross profits in the Chartering Division also decreased by 49.4%YOY to US$ 0.2 million. Revenue from Other Services decreased by 33.0% YTD, while gross profits in this division remained relatively stable, showing a slight increase of 1.2% YTD to US$ 0.9 million.
Indirect Expenses and Operating Profit
Indirect Expenses increased by 61.4% YOY to US$ 2.3 million. A significant factor was the one-time reversal in employee benefit expenses in 2023 due to the Company’s adoption of the changes in the Omnibus Law, which did not recur in 1Q2024. Salary expenses also rose to US$ 1.7 million, up 41.4%YOY from 1Q2023, primarily due to increase in permanent employees following business expansion.
Operating Profit for 1Q2024 was US$2.7 million, which increased 71.7% YOY.
Other Income, Expenses and Net Attributable Profit
Interest expenses decreased by 5.9% YOY to US$0.2 million for 1Q2024 with ongoing reduction in debt as the Company’s net gearing ratio has now fallen to only 0.9% as of 31 March 2024.
Income from equity in associates turned positive, reaching US$0.2 million in 1Q2024 compared to a loss of US$0.4 million in 1Q2023. This improvement reflects higher utilization and better profits from an associate’s recovering business.
The net profit attributable to shareholders for 1Q2024 amounted to US$2.2 million, marking a significant increase compared to US$0.18million in 1Q2023.
Industry Outlook
The rise in global energy consumption demand is leading to investments in oil and gas exploration and production, emphasizing the industry’s resilience and adaptability amid geopolitical tensions and a shifting energy landscape. In 2024, the global oil market remains robust, with IEA projecting demand growth of 1.2 million barrels per day.
Indonesia’s oil and gas sector aligns with this trajectory, showing signs of renewed activity and expansion. Recent discoveries and the final approval of the Masela Field plan of development will likely drive increased deepwater exploration and development work, which will create increased demand for higher value OSVs. Progress in bringing offshore gas discoveries like the Mako field into production, along with the drilling of a significant ultra-deepwater gas prospect in the Andaman Sea, further highlight the potential growth for OSV services in the region.
OSV demand has strengthened further, driven by a continuation of increased offshore activities, including drilling and maintenance. The market is seeing tightening conditions due to rising requirements for OSVs arising from an increase in active rigs while OSV supply remains limited. These conditions have pushed up utilization of OSVs globally, and are likely to persist due to current limited orderbooks for newbuilds, which will support even higher charter rates.
Business Prospects
In 1Q2024, the Company further expanded operations beyond Indonesia, securing contracts in Brunei and Thailand, and commencing a long-term contract in India. These contracts offer improved charter rates and diversify service offerings, including specialized support for subsea and geo inspection tasks.
Subsequent Events
In line with plans to rejuvenate our fleet composition, the management took advantage of an attractive bid and sold one of our earliest purchased PSVs at a very favorable price in April 2024. The proceeds of this sale will enable the Company to reinvest in more attractive yielding assets in the market at present.
The Company had been locked into 2 long-term contracts since 2019 at charter rates much lower than the current market level. These contracts were not extended and have concluded by late April, thus freeing up the vessels to benefit from higher market rates.
Contracts on hand as at end March 2024 amounted to US$71.6 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
Investor Relations
PT Wintermar Offshore Marine Tbk
Tel (62-21) 530 5201 Ext 401
Email: investor_relations@wintermar.com