Wintermar Offshore cuts 2015 Capex by 40% on subdued oil and gas exploration activities

[image: Wintermar]
[image: Wintermar]
JAKARTA (rambuenergy.com) – PT Wintermar Offshore Marine Tbk, an offshore supporting vessel provider, said it has decided to cut its planned 2015 capital expenditure (capex) by 40 percent to US$30 million, which is funded 70 percent by bank loans and 30 percent equity.

The company will also postpone two out of three deliveries of vessels to the second half of the year as the company wants to see a more visibility on the oil and gas industry outlook. Currently, the company is working toward increased efficiency in the management of its vessels.

The domestic oil and gas industry market was subdued in 2014 because of the delay in regulatory approvals for some projects. This resulted in one large international oil company having to terminate its drilling program after not receiving approvals for the continuation of their program following the completion of only the initial phase. The contracts with oil and gas operators to support their production, however, were not affected.

“With the new government installed only in late 2014, we do not expect a significant change in the first half of 2015,” Wintermar said in a statement.

“Our strategy for facing these very challenging times in the short term has been to continue seeking new markets for our vessels while also implementing cost reduction measures,” it said.

Wintermar Offshore however is upbeat about the prospect in 2016 as it expects higher activities in Indonesia stemming from some development projects in Eastern Indonesia where production is on the horizon – in Papua (Tangguh LNG Train 3), the Arafura sea (Masela Block) and in the Makassar Strait.

As these projects have already incurred significant development expenses, we are optimistic that they will continue as planned.

The company expects the government to attract investments into oil and gas exploration as well as the maritime sectors next year.

“Therefore the outlook for 2016 and beyond looks markedly better because of domestic factors. We believe we will have a better competitive environment arising from the domestic cabotage regulation when Indonesian activity starts to pick up again,” he noted.

Wintermar’s 4th quarter 2014 saw higher utilization rates for its fleet as compared to 3rd quarter 2014. This was driven by its marketing efforts in the region which bore fruit. The company was able to secure work in Myanmar and Vietnam for its larger vessels. However, the margins on these contracts are lower than in Indonesia as it doesn’t have the benefit of the Indonesian flag and have higher agency costs overseas.

The company’s contracts on hand as at end February 2015 amount to US$142 million.Wintermar posted net income of US$30.44 million in 2014, down from US$38 million in previous year. Its revenues were US$176.91 million, down from US$195.47 million  a year earlier.(*)

 

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[image: Wintermar]

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