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Wintermar 2014 profit down 22%, sees weak market ahead

Wintermar 2014 profit down 22%, sees weak market ahead
Indonesian offshore supply vessel player Wintermar Offshore Marine saw 2014 net profit fall 22% to $21.7m.

Owned vessel revenue rose 3% on new fleet additions, however due to project delays in the second half it saw lower utilisation of higher end vessels, impacting gross margins which fell to 45.1% from 51.9% previously. Gross profit from this segment also fell 11% to $49.9m.

Meanwhile the chartering division saw revenues fall by 30% to $54.6m although higher gross margins helped gross profit rise by 11% to $5.8m. The reduction in chartering revenues was also blamed on the fall off in demand in Indonesia during the second half of the year. Operating profit for 2014 was 11% lower at $45.1m.

Utilisation rates rose from the third to the fourth quarter as the group refocussed marketing efforts in the region and was able to secure work in Myanmar and Vietnam for its larger vessels but margins were lower compared to the cabotage market in Indonesia, Wintermar said.

Looking ahead the group noted that the sudden sharp drop in the oil price since the fourth quarter of last year has had a significant negative impact on the oil and gas industry globally as well as in Indonesia.As a result, it expects price pressure amidst strong competition. for work.

Although its mid and low-tier vessels are able to serve the production phase and are less affected, Wintermar said it is less optimistic on the high-end vessels and expects a fall in utilisation rates for 2015 and ensuing negative impact on margins and earnings for the year.