Tag: Wintermar Offshore Marine Group

Wintermar group has been awarded a 5 year contract to provide 2 Offshore Support Vessels for a multinational oil and gas company in Indonesia.

Wintermar will supply 2 units of Anchor Handling Tug Supply vessels to support production off the northern coast of East Java for a period of 5 years. The vessels will support an FPSO (Floating Production Storage Offtake) unit in a producing field. The total contract value of the contract for this project amounts to US$ 22 Million.

“We are pleased to have been selected to support this project by a leading multinational oil and gas company. This affirms our clients’ recognition of Wintermar’s committed efforts to ensure high standards of quality, health and safety,” said Sugiman Layanto, Managing Director of PT Wintermar Offshore Marine Tbk. “This long term contract underlines the Indonesian government commitment to invest heavily to raise the country’s output of oil and gas after some years of decline. Wintermar as the leader in the domestic offshore vessel industry is ready to play our role.”

As at 24 May 2021, the Company’s contracts on hand amount to USD 76.7 million.

–Building growth and sustainability for the coming recovery
As the oil industry is recovering globally, there are more projects being reactivated again. The Management has been studying some potential projects to position for a recovery. During the past two years, the Company has sold many older vessels and reduced gearing to 31% by end December 2020. Overhead costs have been significantly reduced and the company has a strong commitment to sustainability.

–Commitment to Seafarers’ wellbeing
Wintermar has also signed our commitment to the Neptune Declaration on Seafarers Wellbeing and Crew change. Recognising that the COVID-19 pandemic has caused a lot of disruption and impacted thousands of crew around the world, signatories to the Neptune Declaration recognize that seafarers are key workers pledges to pursue best practices for health protocols, speed up access to vaccinations and collaborate to do what is necessary to protect seafarers and expedite crew change. More information can be read here: https://www.globalmaritimeforum.org/content/2020/12/The-Neptune-Declaration-on-Seafarer-Wellbeing-and-Crew-Change.pdf

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 an 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
Email: investor_relations@wintermar.com

Wintermar Offshore Marine (WINS:JK) has announced results for 1Q2021. Wintermar is back in the black with net profit before tax of US$0.2 million, after three quarters of net losses.

Business conditions have improved in 1Q2021 since the worst of the pandemic in 2020. Utilization still remains below the level achieved in 1Q2020, but the trend is positive. Total revenue of US$10.2 million recorded in 1Q2021 is still 21% below the level of US$12.9 million achieved in 1Q2020. Despite this, the Company was able attain a positive contribution at the gross profit, operating profit and also at the comprehensive net profit level for 1Q2021 due to cost control measures taken in 2020.

–Owned Vessel Division
Owned Vessel Revenue for 1Q2021 was 16% YOY lower at US$8.35 million as utilization remains at 61% compared to 69% in 1Q2020. There was a delay in the commencement of operations for a large project in Indonesia due to repairs needed on the rig which caused some committed vessels to be idle. However, due to a 29% YOY reduction in direct costs, the Owned Vessel division showed a YOY jump of 170% in Gross Profit of US$1.8 million compared to US$0.7 million in 1Q2020.

Maintenance costs fell significantly by 39% YOY to US$0.5 million, as there was less work compared to 1Q2020 when several vessels were being prepared for work. Crew and operating costs both reduced by 16% YOY as a result of fewer vessels after the sale of 5 vessels in 2020. Depreciation was also significantly lower as a result of a smaller fleet, asset impairment of US$4.5 million taken in 2020 and an adjustment in useful life of assets. Fuel bunker however, rose by 74% YOY to US$0.2 million due to a new wet contract in 2021.

–Chartering and Other Services
Chartering revenues of US$1.5 million for 1Q2021 recorded a 36% YOY decline while Revenues from Other Services fell by 45% YOY to US$0.4 million as these segments which were badly affected by the pandemic have not yet recovered. Both business segments continued to contribute gross profit of US$0.36 million in total for 1Q2021 compared to US$0.62 million in 1Q2020.

–Indirect Expenses and Operating Loss
The cost efficiency measures involving sale of vessels and a reduction in shore employees, plus the voluntary salary reductions taken by senior staff led to a 21% YOY fall in Indirect Expenses to US$1.2 million in 1Q2021 from US$1.5 million. Although the hiring freeze was lifted and the Company took on new employees in 2021, total salary costs were still 26% YOY lower at US$0.08 million. Administration, utility and travel costs were also 35%, 26% and 72% lower respectively on a YOY basis, as employees continued to work from home for most of the first quarter in line with higher COVID-19 precautions in Jakarta. Marketing costs in 1Q2021 rose by 159% compared to the previous year due to bid bond costs as the Company participated in several tenders. These increased costs reflect the more positive mood in the industry as more tenders are being issued in 2021 as compared to the negative environment a year ago.

For 1Q2021, the Company recorded an Operating Profit of US$0.95 million compared to an Operating Loss of US$0.23 million in the same period last year.

–Other Income, Expenses and Net Attributable profit
Interest expenses continued to reduce by 23% to US$0.7 million as debt levels decline. Associated companies reversed losses to turn in a small profit compared to losses the previous year. There were no vessel sales in the period under review whereas in the previous year the Company booked a profit of US$1 million from vessel sales. Total other expenses amounted to US$0.7 million for 1Q2021, compared to income of US$0.4 million a year before.

The Company recorded US$0.2 million in Net Income Before Tax for 1Q2021, nearly the same as the previous year. After tax expenses and minority interests, there was a Net Loss Attributable to Shareholders of US$0.3 million whereas the Company made a small profit in the same period last year.

EBITDA for 1Q2021 US$4.3 million, 16% lower compared to 1Q2020, but higher than the each of the preceding three quarters.

–Oil & Gas Industry
2021 has brought fresh optimism around the world as most major countries have been actively vaccinating their populations, resulting in more traffic and the opening up of some sectors of the economy. The new variants and alarming escalation of infections in India demonstrate that the recovery will not be smooth, but economic data around the world has turned more positive.

–Offshore Vessels
Similarly, there has been a turnaround of sentiment in the oil and gas industry, with most predictions showing a bottom in 2020-2021 and anticipating higher investment along with a stabilizing oil price above US$50/barrel. This has also been reflected in the Offshore Supply Vessel (OSV) market which has seen increased transactions of second hand vessels since the start of the year.

There are more tenders in 2021 compared to last year, although charter rates in the region have not yet risen as much as in the North Sea. The highest tendering activity has been in Malaysia and Brunei, while Indonesia has lagged.

–Strategy and Outlook
There is now more optimism in the OSV industry. Apart from participating in more tenders, the stronger balance sheet with the successful rescheduling of debt to longer maturities gives the Company room to consider new investments.

2021 marks the 50th year of operations of the Wintermar Group and the start of a leaner fleet, the achievement of the Company’s professed target since its public listing 10 years ago. The push towards more efficiency is continuing, as the Company has embarked on a project to use technology to improve crew management and reporting.

The pandemic has accelerated the Company’s use of technology and one positive impact is the stepping up of crew and staff training via video, while zoom meetings have actually increased the number of management interactions with vessel crew which in the past was limited to on physical visits on board. Crew development and training will continue to be a big area of emphasis as one of the Company’s sustainability strategies.

The debt equity ratio of the group is now 33% and there will be room to invest in the coming months should there be attractive opportunities.

Contracts on hand as at end March 2021 amount to US$64.8 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 an 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.

Ms. Pek Swan Layanto, CFA
Investor Relations
PT Wintermar Offshore Marine Tbk
Tel +62-21 530 5201 Ext 401
Email: investor_relations@wintermar.com

Wintermar Offshore Marine (WINS:JK) has announced results for 9M2020. Wintermar’s Owned Vessel revenue for 9M2020 was 17% lower YOY at US$24.6 million and there was a slight improvement on a quarterly basis in 3Q2020 compared to 2Q2020.

–Owned Vessel Division
For the 9M2020 period, Owned Vessel Division recorded a gross loss of US$2.8 million, largely due to cancellations and postponement of contracts caused by the pandemic. Cost efficiency measures and a streamlining of the fleet undertaken since last year led to a 14% YOY decline in Owned Vessel direct expenses, which helped mitigate some of the losses.

On a quarterly basis, revenue for 3Q2020 was slightly improved as compared to 2Q2020 while direct expenses fell.

Measures taken to improve cost efficiency resulted in a 14% reduction in direct expenses for Owned Vessels. Fuel costs dropped sharply by 71% YOY while depreciation fell by 14% YOY due to the sale of 4 vessels in the period 1 January 2020 until 30 September 2020. However, due to the cost of extra precautions taken to ensure the health and safety of crew and clients crewing costs were only 3% lower YOY for 9M2020.

–Chartering and Other Services
Chartering was also negatively affected, contributing US$0.4 million to gross profit as compared to US$1 million in 9M2019. Other Services experienced a similar decline and contributed US$0.3 million to gross profit for 9M2020.

–Indirect Expenses and Operating Loss
Overall, indirect expenses were 15% lower YOY, totaling US$4.5 million for 9M2020. The biggest contributor to these savings was a 15% YOY decline in staff salaries. This was due to lower headcount as well as a voluntary salary reduction supported by all levels of management and staff to mitigate the impact of the pandemic. Marketing and travelling expenses fell YOY by 74% and 43% respectively while lower depreciation also contributed to the cost reduction for 9M2020 compared to 9M2019.

The Operating Loss was 17% YOY higher at US$6.5 million for 9M2020.

–Other Income, Expenses and Net Attributable profit
Interest expenses fell by 27% YOY to US$2.5 million, largely due to lower debt as the Company paid off US$5.7 million of bank loans over the past 9 months. Vessel sale proceeds of US$4,9 million added US$1.2 million to other income, while share of associate companies’ losses widened to US$0.4 million from US$0.02 million.

For the nine months ending 30 September 2020, the net loss attributable to shareholders totalled US$7.4 million compared to US$5.7 million in 9M2019.

EBITDA for 9M2020 was US$9 million, compared to US$12.5 million booked in 9M2019.

–Oil & Gas Industry
Activity was slow during 3Q2020, as the world continued to grapple with measures to control the COVID-19 pandemic. In South East Asia, charter rates have been stagnant and are unlikely to drop much further as they are barely covering cash costs. However, leading indicators for oil and gas are turning more positive.

In its October report, the International Energy Agency (IEA) projected that world demand for oil would return to 96.1 million bpd by Q42020 compared to an average of 100.1 million bpd for 2019. This represents a sharp recovery from 2Q2020 where global oil demand fell to the lowest point at 83 million bpd. On the supply side, oil and gas production has been hit hard as many Exploration and Production companies have cut back on investments due to financial pressures. OPEC+ has shown high compliance in maintaining lower production. If IEA projections are achieved, excess oil inventories may be drawn down by end of 2020, which is potentially good news for oil price stability and strength in 2021.

A recent study by Rystad Energy has concluded that deepwater drilling costs have fallen to US$50/barrel, lower than US shale production costs. Should oil prices recover, there are several potential offshore projects in SE Asia which could provide increased gas supply.

SKK MIGAS, Indonesia’s regulator for the upstream oil and gas sector, has just reiterated in October 2020 their plans to boost oil and gas production to achieve their target of 1 million bpd by 2030 from 746,000 bpd in 2020. Since Indonesia has several discovered but undeveloped fields, this would actually be an achievable goal if the government is able to deliver on their plans for enhanced oil recovery and exploration.

–Strategy and Outlook
As countries have started to ease their COVID-19 restrictions on travel and business activities, there has been a gradual but steady recovery in oil and gas demand. China, which was early to emerge from lockdown, has shown a sharp recovery in economic growth.

The economic slump and spike in unemployment worldwide is being addressed through stimulus packages proposed by governments around the world. The threat of a resurgence of the virus seems to be handled with more localized lockdown measures to limit the harsh economic effects of COVID-19 “lockdown” restrictions. All this points to a gradual recovery of demand for oil in the coming year.

Although 2020 results will continue to be plagued by the pandemic’s effect on reducing oil demand, there has started to be more tendering activity in 4Q2020 which is indicative of better times in 2021.

Rystad Energy research is projecting growth in South East Asian gas production. Wintermar has been building up a presence in Malaysia, Brunei and Myanmar for the past few years, as we position the Company to be a major player in Asia.

Contracts on hand as at end September 2020 amount to US$70 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.

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

Wintermar’s Occupational Health and Safety Management System has attained the ISO 45001:2018 certification, demonstrating the group’s continued commitment to quality services for clients.

On 8 October 2020, PT Wintermar Offshore Marine Tbk (WINS:JK) received the certification of compliance with the new and improved ISO 45001:2018 certification for Occupational Health and Safety Management System. This milestone, achieved in the midst of the COVID-19 pandemic, underscores the importance placed on employee and client health and safety. It also marks the continuing move towards risk-based thinking in the management system. The Company Integrated Management system is now certified for the upgraded ISO requirements in all three areas: Quality through ISO 9001:2015, Environment through ISO 14001:2015 and for Occupational Health and Safety through ISO 45001:2018.

Wintermar’s actions during the pandemic

During the past months, the Company has worked to bring down the cost base, enforcing strict cost controls to improve efficiency. These measures help to offset some of the unexpected new costs related to COVID-19 testing, prevention and quarantining, which are new standard precautions to prioritise the health and safety of clients and personnel during the pandemic.

The initial downturn in oil prices in 2Q2020 caused some contract cancellation and postponement. However, the gradual recovery in oil and gas demand has signalled a return of oil price stability in recent weeks. There has been a pick-up offshore activity lately. Fleet utilization has recovered from the slump in 2Q2020 as the Company managed to secure some short-term work to mitigate some of the loss of work caused by the pandemic.

As at end of August 2020, the Company’s Contracts on hand amounted to US$ 69.5 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.

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 

Wintermar’s cash flow has improved after rescheduling short term loans, while oil prices have recovered as COVID-19 restrictions are easing across the world.

On 25 August 2020, PT Wintermar Offshore Marine Tbk (WINS:JK) held a Virtual Public Expose as a participant in the Indonesian Stock Exchange Public Expose LIVE 2020 event. The Company updated on three key issues:

I. Oil Shock
The sharp decline in oil prices at the end of March resulted from the lack of agreement from OPEC+ and the sudden decline in oil demand caused by global lockdown measures to contain the spread of the COVID-19 pandemic.

After a sharp decline in April 2020, oil prices have started to stabilize around US$40 per barrel as economic activity is recovering around the world. EIA’s short term energy outlook for July 2020 predicts that demand will rise more than supply. If oil prices start to rise again there are up to US$35 bn in oil and gas projects in Asia which are likely to be commissioned in the coming years.

II. Wintermar’s actions during the downturn
The Company explained the actions taken by management in the past few months to reduce cost and preserve cash to mitigate the effects of COVID-19. Despite the sharp decline in oil prices and cancellation of some contracts, the Company has been able to win short term contracts and are still tendering for longer term contracts. Through these measures, the Company has managed to maintain a positive cash flow.

III. Wintermar’s position
Wintermar’s fleet is engaged in the upstream segment of oil and gas industry. In South East Asia, Wintermar now ranks 7th in terms of number of vessels and has built a strong reputation as a high quality player operating internationally. With net gearing at 38%, the Company has managed to come out leaner and stronger from the crisis and is well positioned for a recovery in the oil and gas industry.

As at end of July 2020, the Company’s Contracts on hand amounted to US$ 69 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.

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 

The COVID-19 pandemic and plunging oil prices cause contract postponement and cancellation, resulting in 17% YOY fall in Wintermar’s 1H2020 revenue compared to 1H2019, with a gross loss of US$658,855 for the first half of 2020.

–COVID-19 Pandemic Impact

After a strong first quarter where the Company made a profit, the combined effect of the global “lockdowns” caused by the COVID-19 pandemic and the breakdown in OPEC talks in March led to a sharp drop in oil prices in April.

When the COVID-19 pandemic escalated, the global economic impact was swift and severe. This uncertainty led to cancellations and delays in offshore drilling operations globally.

Travel restrictions imposed domestically as well as globally also impacted our ability to carry out crew changes. This meant that the crew who had completed their contracts were not allowed to travel home while relievers could not start work.

The Company implemented COVID-19 protocols to protect the health and safety of our staff and crew, including full Work From Home procedures from late March 2020 until end of June 2020. Strict controls were imposed on visitors on board the fleet. Masks, sanitisers, cleaning and disinfecting equipment were supplied to all vessels, and COVID-19 drills were carried out on board as well as on shore. Although absolutely essential, these also added to operational costs.

By early July 2020, in line with the Jakarta government’s move to Phase 1 of the “New Normal”, the Company started to allow some employees back to work in the office, subject to a guidance of 30% capacity, compulsory mask usage and social distancing measures. Some crew changes became possible with some safety protocols including compulsory quarantines imposed by some charterers.

–Owned Vessel Division

Stating COVID-19 as the reason for being unable to continue with safe operations, some clients postponed commencement or even terminated their drilling projects since May 2020. Outside Indonesia, two vessels which were delivered in March are still awaiting the commencement of a contract. The drilling project in the Makassar strait which was terminated in mid-May impacted several of the Company’s vessels. As a result, fleet utilization rate fell from 70% in 1Q2020 to 60% in 2Q2020, with high tier vessels the worst affected.

Revenue from Owned Vessels for 1H2020 declined by 7% YOY largely due to a 26% quarterly drop in revenue in 2Q2020 compared to 1Q2020. Despite the lower revenue, the gross loss from the Owned Vessels Division reduced by 42% YOY in 1H2020 compared to 1H2019. This can be attributed to the Company’s efforts to streamline the fleet and operational structure, which contributed to a reduction of 16% YOY in depreciation and 26% in maintenance costs.

Operational costs however, rose by 22% YOY to US$1.8 million due to increased international operations as well as extra costs related to COVID procedures and quarantine requirements.

–Chartering and Other Services

As economic activity shut down globally in 2Q2020, chartering revenues fell sharply by 42% to US$3.6 million, resulting in a 57% fall in the contribution from Chartering Division. Other services also fell in tandem to record a profit of US$325,941 for the first half, from US$879,759 in 1H2019.

The Company booked a gross loss of US$658,855 for 1H2020, -4% YOY compared to 1H2019.

–Indirect Expenses and Operating Loss

The success of the cost efficiency measures arising from the reorganization of the fleet can be seen in the 19% reduction in indirect expenses. The largest component of indirect expenses, which is staff costs, has fallen by 19% YOY to US$2 million in 1H2020.

Over the past 18 months, the Company has sold 7 vessels and laid up 6 older vessels and streamlined the shore team structure. The repositioning of the Company’s fleet to focus on mid and high tier vessels which has been in process over the past two years has resulted in a leaner shore base with lower overheads.

The Operating loss for 1H2020 fell 16% to US$3.7 million from 1H2019.

–Other Income, Expenses and Net Attributable profit

In line with the reduction of debt, interest expenses fell 17% YOY to US$1.9 million in 1H2020. Unfortunately, the pandemic also impacted the equity in net earnings of associated companies, which recorded a loss of US$0.22 million for 1H2020 compared to a profit in 1H2019. The Company booked a profit of US$1.2 million on the sale of a vessel in 1H2020 and a forex gain of US$0.4 million.

For 1H2020, the Company booked a net loss attributable to shareholders of US$3.97 million, reduced by 16% YOY from 1H2019.

EBITDA was lower at US$6.7 million for 1H2020, compared to US$8.1 million for 1H2019.

–Oil and Gas Industry

The second quarter of 2020 made history as oil prices became negative for the first time, as the lack of demand caused inventory build up, while the lack of US Oil storage capacity caused WTI Oil prices to sink to a negative US$37 price in April. On the oil supply side, OPEC+ responded with a coordinated production cut of up to 9 million bpd, while US Shale producers started shutting in their wells. Oil demand bottomed out in April 2020 and started improving in May 2020 as many countries started to ease the “lockdowns” necessitated by the COVID-19 pandemic. This has allowed oil prices to gradually normalize again at around US$40 per barrel.

The unprecedented scale of the simultaneous shut down of cities and countries has triggered an oversupply of oil which will take months to be drawn down. For the full year 2020, most researchers predict oil demand to be 9% below that of 2019. Equilibrium in demand and supply of oil is expected to be reached only in 2021.

According to Clarkson research, at the start of 2020 there were 65 fields scheduled to commence this year but after the outbreak of COVID-19, most were delayed and only 28 projects are still expected to continue this year, with others delayed till 2021.

The worst hit sector is US Shale production, where producers have been forced to shut in wells, and it is looking unlikely for some of these wells to be reinstated when prices recover. Should oil prices recover, it is likely that offshore oil activity will resume since US Shale producers may find it hard to fund future capex. Therefore the outlook on oil and gas in the coming years is more optimistic.

–Outlook for Offshore Support Vessels (OSV)

2020 was supposed to be a year of recovery as utilization rates picked up and charter rates were starting to rise and the beginning of the year. The offshore vessel industry had been enjoying a better equilibrium due to high scrapping activity in the past few years. Due to poor charter rates, there has been hardly any new building orders in DP vessels in the past years.

COVID-19 related project postponements arising from May this year will cause lower utilization rates for the rest of 2020, resulting in more financial stress for the industry. It will again require resilience for OSV companies to weather the next few months.

Because of the poor charter rates and reluctance of banks to finance OSVs, there is unlikely to be any new supply of OSVs in the coming year. This bodes well for a recovery in the industry when the oil market reaches a balance again in 2021. Some researchers also suggest a shortage of oil is likely from 2023 due to the lack of investment in reserves over the past few years.

There are still ongoing drilling projects being tendered in Indonesia, Brunei and Malaysia for commencement in 2021 and beyond. Although the pandemic has pushed out start dates, these projects are likely to continue when oil prices show some stability.

–Strategy and Outlook

During 2Q2020, management has already put in place several measures to reduce costs through down manning vessels, a freeze on new hires and postponing non essential expenses. To improve revenue, the Marketing team has fixed some spot contracts to mitigate the impact of contracts which had been postponed or terminated due to COVID-19.

As cash flows were impacted by delays in invoicing and slowing accounts receivables from the lockdown measures, management approached bankers and were successful in securing a rescheduling of principal repayments. With the agreement of major lenders, US$15.6 million of principal repayments have been reclassified from short term to long term loans, providing a higher degree of comfort for the Company’s cash flow outlook in 2020 and 2021. The lightened debt repayment for the next 18 months will underpin the financial sustainability of the Company during this uncertain year.

Management efforts in the past few years to expand internationally have repositioned Wintermar. The Company is now ranked 7th in the Asia Pacific region by Clarksons and is well positioned to compete as the regional oil and gas industry recovers from the aftermath of the pandemic.

Contracts on hand as at end June 2020 amount to US$71.7 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.

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