KUCHING: Sealink International Bhd
is upbeat about the prospects of its offshore supply vessels (OSVs) as charter rates improve in a tight vessel market.
The Sarawak-based shipbuilder and ship charter company’s optimism is also based on the rising demand for the group’s OSVs and the “very limited” number of such vessels in the market.
Sealink made a significant turnaround and posted a net profit of about RM7.35mil in the April to June quarter from loss of RM1.1mil in the corresponding period last year as revenue nearly doubled to RM31.5mil in the period from RM16.1mil it made in the corresponding second quarter in the last financial year (2Q23) as a result of higher utilisation rate of its vessels.
Sealink was in the red, incurring after-tax loss of RM65.4mil in FY21 and RM20.2mil in FY22 on revenue of RM38mil and RM65.3mil respectively, due to the downturn of the oil and gas (O&G) industry and effects of the Covid-19 pandemic .
“The group is optimistic about its prospects going forward as we expect to achieve better results on the back of rising demand for our vessels as we continue to see strong momentum and demand from customers as reflected in our results,” the company said when releasing its 2Q23 financial results last Thursday.
Sealink group builds, owns and operates a diverse fleet of marine support vessels. It serves the global exploration and marine industry, spreading to some 20 countries.
The group’s charter fleet comprises 22 vessels.
Two other service providers – Dayang Enterprise Holdings Bhd and Petra Energy Bhd – also reported higher utilisation rates of their OSVs in 2Q23, sharply driving up their group earnings.
Dayang posted a 54% year-on-year (y-o-y) jump in net profit to RM64.7mil on revenue of RM305.7mil (RM263.4mil in 2Q22) while Petra Energy saw its 2Q23 earnings soar to RM16.2mil (RM1.39mil in 2Q22) on expanded revenue of RM185mil (RM83.1mil in 2Q22).
According to Dayang, the group’s vessel utilisation improved to 72% (66%) with improved daily charter rates.
Besides higher vessel utilisation, the 2Q23 earnings of both Dayang and Petra Energy were boosted by more orders for topside maintenance contracts being awarded by the oil majors.
Sealink chief executive officer/managing director Yong Kiam Sam expects the demand for OSVs to continue to strengthen.“Just as encouraging as the acceleration in demand for OSVs is the continued reduction in the available supply of OSVs. The number of OSVs available is very limited, indicating that the supply of vessels will continue to decline gradually.
“Accordingly, it is our view that the O&G industry is positioned to benefit from an increase in demand over the medium to long term with a slowly shrinking supply of vessels. We believe this imbalance in supply and demand will continue to provide the opportunity for day (charter) rate and utilisation to increase,” he said in the company’s annual report.
Sealink expects 2023 to be a bright year for the O&G industry, by and large, mirroring the outlook that Petroliam Nasional Bhd (PETRONAS) has cast on the prospect for the sector outlined in its “PETRONAS Activity Outlook 2023-2025” in line with the continued recovery seen throughout 2022.
Specifically, the national oil company stated that the outlook is positive for activities relating to repair and maintenance activities required to maintain the integrity of offshore facilities.
Yong expects steady demand for OSVs, especially for vessels supporting drilling and related projects.
As PETRONAS sees higher demand for OSVs in the 2023 to 2025 period compared with its previous forecast, “this is an opportunity for local players,” he said.
“With the pandemic a thing of the past, we are looking forward to secure more new charters. We have embarked on initiatives to enhance our bidding competitiveness. They will augment our business and operational resilience and help us deliver projects in line with our customers’ needs and expectations. We believe our efforts will drive better results for the group moving forward,” he added.
On its shipbuilding business, Sealink said it is looking at building new vessels that are more energy efficient and environmentally friendly in line with tighter environmental regulations in the maritime industry.
The group’s shipyard in Miri had built and delivered 68 vessels, including the fabrication of two work barges since 1999.
