Overall revenue plunged 44% to $13.1m from $23.3m in the previous corresponding period due to a lag effect from the near standstill in tendering activity experienced in the second half of 2016, which resulted in lower charter rates while utilisation rates dipped below 50%, the company said in a press release.
Wintermar's owned fleet utilisation rate fell to 49% in the first quarter of this year from 57% in the first quarter of 2016. Among these, high-tier vessels saw a bigger dip in utilisation as several of them completed contracts last year and there were no significant new jobs the current quarter.
The chartering division was also hit by last year's slump, with revenue and operational profit falling by 59% and 39% to $ 2.9m and $600,000 respectively.
Although sentiment in the oil industry seems to have bottomed out and tendering activity has picked up in 2017, the OSV sector lags the oil price by six to nine months, Wintemar said. Poor first quarter results reflected the negative sentiment in the industry in the latter half of 2016 where few contracts were awarded, it added.
Assessing the results, Wintermar said that although the first quarter financial results continue to be weak, marketing activity has been trending up steadily for the first few months of 2017.
As a leading indicator, the contracts on hand which declined steadily last year due to a lack of activity have started to rise again with the award of new contracts of work in the past few weeks, the offshore marine services supplier noted.
Looking ahead, Wintermar was more upbeat. "Since the end of December 2016, there has been higher optimism that oil prices are settling into a more stable trading range. There is increased activity in Southeast Asia with a number of contracts awarded over the past few months," it said.
However it cautioned that despite the higher activity, there is still oversupply in the OSV industry, which has caused charter rates to fall even further in the latest rounds of tenders.
With new drilling activity in Southeast Asia, as indicated by some new tenders for drilling rigs in Vietnam, Indonesia, Myanmar and Malaysia so far this year, the group is optimistic that business conditions are improving.
However, of the oversupply situation and resulting price competition, it expects it will be several months before this is reflected in better numbers for the offshore support sector.
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