WINS rekomendasi beli by Danareksa

Wintermar Offshore Marine

On the right course

WINS posted solid FY11 earnings of Rp132bn, up 25% YoY, on the back of 13 additional vessels, the majority in the mid to high tier category. With additional AHTS required for the BP Berau Ltd contract, we raise our FY12 EPS estimates from 51 to 55. Another positive is the higher portion of the company's owned vessels going forward, as this will boost income. More offshore blocks offered by the government will also create opportunities. We upgrade our target price at Rp600, implying FY12F-13F PE of 10.7-6.8x.

New contracts in hand

US$ 172 million worth of contracts were in hand by March 2012, or US$53 million higher than in 2011 when most of the vessels rented were categorized as mid to high tier vessels. In FY11, the majority of WINS' revenues were still driven by its chartering business for which owned vessels contributed 51% and the remainder came from third party vessels. With its current composition of vessels, we expect a high utilization rate of about 75% on average for mid to high tier vessels and 70% for low tier vessels. We also expect an average rental price for mid to high tier vessels of about US$4,600 and US$19,150, per day respectively. In our estimate, the company will book total revenues of Rp 1,225bn in FY12. Hence, earnings are also expected to increase to Rp 196 bn in FY12, up from Rp 181bn in 2011. Our earnings estimate is higher than before, since we now include the additional AHTS for the BP Berau Ltd contract, i.e. two 8,000 BHP AHTS vessels, as the operations are expected to commence in the second half of 2012.

Solid financial performance

WINS' gearing ratio surpassed 50% in FY11 after the company drew down its facilities to fund the additional 13 vessels during the period. Nonetheless, the company's gearing is relatively low compared to its peers who have gearing of above 75%. Furthermore, the company's interest coverage remains very solid at 8 times, thanks to the sound EBITDA of Rp281 bn recorded in FY11. Cash flow from operations was lower in FY11, down by about Rp 55bn, mainly due to higher payments to suppliers as the portion of owned vessels to third party vessels declined from 56:44 to 51:49. Yet going forward, this trend should reverse due to the additional vessels. Hence, we expect this ratio to become 58:42 in FY12, thus resulting in more solid cash from operations. WINS shall book about Rp400 bn cash flow from operations in FY12, in our estimate.

Shifting offshore

The first round of 2012 bidding announced by the Ministry of Energy and Mineral Resources a couple of weeks back provides further evidence of the shift in the EP sector from onshore to offshore. Over 19 blocks, either under regular tender or the direct proposal mechanism, were offered. About 50% of the blocks are offshore and the remainder are either offshore or onshore. The offshore blocks offered include the West Pelikan Block, the East Sokang Block, the Offshore South East Mangkalihat Block, the East Aru Block, the Bengkulu I Mentawai Block, the Marlin Block, the Telen Block, the East Sepinggan Block, and the Aru Block. In our view, this shall create potential opportunities for the company.