Wintermar Offshore sees increase in revenue and profitCompany News // March 20, 2017
Wintermar Offshore Marine in Indonesia has announced FY2016 financial results. Operating profit rose 68 per cent year of year to US$4.9 million, EBITDA rose 8 per cent to US$33 ,illion, and net gearing fell to 50 per cent as at end 2016.
"In what was an extremely challenging year, management took certain actions to preserve cash flow and generate higher utilization," said the company. "As a result Wintermar was able to generate higher operating profit and cashflow, thereby reducing the net gearing to 50 per cent at the end of FY2016 compared to 57 per cent the year before."
In the Owned Vessel Division, full year revenues of US$58.9 million were 11 per cent lower than the previous year. Gross profit from Owned Vessels fell 5 per cent to US$8.6 million for FY2016 compared to the previous year.
"To mitigate the slump in domestic demand for OSVs, we marketed our vessels more aggressively in international markets, resulting in some lump sum costs for mobilization and maintenance to prepare for international work in the fourth quarter," said the company. "The continuation in 2015 of some older contracts which had been suspended since the oil crisis started also led to higher utilization of high tier vessels for 2016 compared to 2015.
"Our fleet cost reduction programme continued, reducing direct costs by 12 per cent year on year. By the end of the third quarter of 2016, however, most of the pre-oil crisis contracts had been completed, which impacted our utilization rate.
"The poor visibility for oil prices for much of 2016 meant that only very few and very short contracts were given out during the year resulting in sporadic utilization of our high tier vessels. Our average fleet utilization remained around 56 per cent for FY2016 compared to 57 per cent the previous year."
Gross profit from chartering rose by 53 per cent to US$3.7 millionand from other income was flat at US$1.3 million compared to the previous year.
"For most of 2016, the outlook for oil prices was very volatile with little confidence in a recovery. Over the two years 2015 and 2016 there were significant reductions of 26 per cent and 23 per cent respectively in global E&P spending. This prolonged lack of spending will significantly slow down supply growth in the long term, according to research by the International Energy Agency (IEA), which warned that demand and supply trends point to a tight global oil market.
"OPEC's decision to cut production by 1.2 million barrels per day in November 2016 set a floor to the oil price causing it to rise to above US$50/bnl. This, combined with the supply constraints from the two year investment slump has triggered a sustained recovery in oil prices and a general consensus that the bottom of the oil cycle is behind us. After two difficult years of spending declines, 2017 is expected to be the first year that global upstream spending is rising again."