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Wintermar Offshore (WINS:JK) Reports 1Q 2019 Results

JAKARTA, Apr 30, 2019 - (ACN Newswire) - Wintermar Offshore Marine (WINS:JK) has announced results for 1Q 2019, with an EBITDA of US$4 million, up 109% QoQ compared to 4Q 2018, while revenue was down 3% QoQ in the same period.

As expected the first quarter 2019 was characterized by a slowing of demand ahead of the Presidential elections in Indonesia. Revenues were flat compared to the previous quarter but fell 26% YoY compared to 1Q 2018, when the Company had a lucrative seismic contract.

Owned Vessels Division

Revenue was 9.1% lower QoQ for the Owned Vessel division, as some vessels came off charter in 1Q 2019 but were not contracted for new jobs immediately due to a slowdown in activity. However, margins improved from the previous quarter, largely due to lower fuel and maintenance costs.

Fuel costs declined due to the docking of the vessel with the "wet contract" (in which the vessel owner is responsible for fuel costs). We expect better utilization in the second quarter after the Indonesian government elections are over.

Chartering and Other Services

Chartering revenue was 13% higher on a QoQ basis, and on a YoY basis Chartering revenue was up by 69% to US$2.9 million, contributing a gross profit of US$0.33 million for 1Q 2019. There was also an improvement in the Other Services Division, which contributed US$0.6 million in gross profit compared to US$0.4 million in 1Q 2018.

The Company has targeted to grow the Chartering and Other Services Division, as these businesses are not constrained by the Company's balance sheet but provide a good source of fee income.

Direct Expenses & Gross Profit

Total Direct Expenses fell 20% QoQ to US$13 million in 2019 compared to US$16.1 million in the fourth quarter of 2018 as all expenses were reduced in line with lower utilization.

For the first quarter 2019, the Company reported a Gross Loss of US$0.73 million compared to a profit of US$3.3 million in 1Q 2018. However, on a QoQ basis, there was an improvement compared to the gross loss of US$3.55 million in 4Q 2018.

Indirect Expenses and Operating Loss

Indirect Expenses declined by 6% YoY to US$1.7 million, mainly as a result of lower salary and marketing costs. Operating Loss for 1Q 2019 amounted to US$2.45 million compared to a profit of US$1.49 million in the same quarter last year.

Other expenses and interest bearing debt

Interest expenses at US$1.1 million were 29% lower YoY compared to 1Q 2018 as the Company's debt has been paid throughout the year. Reflecting better utilization of fleet, there was a decline in the loss in Equity from Associate Companies of 76% YoY to US$0.10 million compared to US$0.41 million the previous year.

RESULT FOR THE YEAR

The net loss attributable to shareholders for 1Q 2019 was US$2.2 million. This was 73% higher than 1Q 2018 but on a QoQ basis significantly lower than the loss of US$17.5 million recorded in 4Q 2018 which included large impairment provisions.

EBITDA

1Q 2019 EBITDA of US$4 million was 109% higher than 4Q 2018, but still lower than the corresponding quarter last year.

Oil and Gas Industry

There has been more optimism in the oil and gas industry worldwide in 1Q 2019. In the North Sea and Middle East, utilization of Offshore Support Vessels (OSV) has improved due to more drilling activity. In Indonesia, however, as expected there was a slowdown in business activity prior to the Presidential elections in 1Q 2019, which caused a delay in project commencement.

Outlook for Offshore Support Vessels (OSV)

There has not been much of a change from the slightly positive outlook we presented in our last newsletter announcing the 4Q 2018 results. Activity is picking up and rigs pricing has stabilized and starting to firm up.

There is certainly more consensus that investments in upstream are beginning to trickle through to increased utilization in the OSV sector. This can be seen in the slightly improved charter rates in one or two vessel categories for recent vessel fixtures in Asia Pacific, as shown in the previous chart.

In Indonesia a peaceful and smooth election process has been positive for the business outlook. We expect better utilization in the rest of the year, but charter rates are unlikely to improve significantly as most tenders are still showing very low engineering estimates.

Strategy

The Company continues to seek improvement in utilization by tendering internationally in addition to domestically. Management are still in process of negotiations with bankers to seek a longer term relief through lower bank installments to better match projected cash flows.

About Wintermar Offshore Marine Group

Wintermar Offshore Marine Group (WINS.JK), developed over 40 years with a track record of quality that is both a source of pride and responsibility that we are dedicated to upholding, sails a fleet of more than 70 Offshore Support Vessels ready for long term as well as spot charters. All operated by experienced Indonesian crew, tracked by satellite systems and monitored in real time by shore-based Vessel Teams.

In 2011, Wintermar became the first shipping company in Indonesia to be certified with an Integrated Management System by Lloyd's Register Quality Assurance, comprising ISO 9001:2008 (Quality), ISO14001:2004 (Environment) and OHSAS 18001:2007 (Occupational Health and Safety). For more information, please visitwww.wintermar.com.

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