Jakarta - In line with fleet utilization which recovered from 46% in 1Q2019 to 77% by 4Q2019, revenue continued to pick up on a quarterly basis, totaling US$15 million in Q42019 from US$14.6 million the previous quarter. This was driven by high tier utilization which reached 85% in 4Q2019.*Owned Vessel Division
FY2019 started poorly as the Presidential elections in Indonesia caused delays in project commencement, meaning the vessels which had been prepared for operations stayed idle while operations were postponed until the second half of the year. Due to these project delays, Owned Vessel revenue for FY2019 fell 17% YOY to US$41.4 million compared to the previous year. As a result, the Owned Vessel Division recorded a loss of US$2.75 million for FY2019 compared to a loss of US$0.6 million in FY2018.
Towards the second half, the fleet utilization rose consistently, led by high tier vessels which were employed in drilling projects. Utilization for high tier vessels picked up to 85% in 4Q2019 compared to only 60% in 1Q2019. The Company was awarded a seven year contract (including options) for 2 Platform Supply Vessels supporting drilling in East Indonesia, which was the first long term tender in the high tier vessel market since 2013. Wintermar also successfully tendered for other contracts for over 2 year durations during the past year, boosting the contracts on hand to US$81.5 million by end of February 2020.
Due to the rising utilization of offshore vessels throughout the world, there is starting to be some upward pressure on crew salaries. The Company has tried to maintain some control over crew salary inflation and managed to cap the rise to 1% through exiting some smaller vessel segments. However, there is unlikely to be any more cost savings in crewing costs due to a higher proportion of foreign contracts which are more exposed to salary inflation.
The strongest recovery was in the Platform Supply Vessel segment, and our 4 PSVs have shown nearly 69% utilization for the year. We continue to be optimistic about this market as deeper water offshore projects are starting to be commissioned in the region, and charter rates in this segment have started showing a slight improvement.
The Company continued to streamline the Owned Vessel Segment by selling 5 more vessels in 2019 and laying up 6 vessels to reduce maintenance and certification costs. The total fleet size therefore continued to shrink to 48 by year end 2019 from 59 at the beginning of 2019. Most of the shrinkage in fleet resulted from selling and laying up low tier vessels.
*Chartering and Other Services
Building on management strategy to increase fee based income, more chartering business was won, resulting in a 33% increase in chartering revenue to US$11.28 million for FY2019 and a doubling of gross profit from Chartering to US$1.2 million for the year, compared to FY2018.
Other value added services fell in tandem with Owned vessel revenue, booking revenue of US$3.4 million (26%YOY) but still recorded a gross profit of US$0.3 million.
*Direct Expenses & Gross Profit
Total Direct costs fell 7%, largely driven by a fall of 12% in Owned Vessel direct cost. All cost categories recoded double digit reduction except for crewing due to cost pressures on crew wages as the industry has been picking up globally.
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