Wintermar Offshore Marine (WINS.IJ Rp 412; BUY TP Rp 610) Robust FY25 outlook Intact, driven by LT Contracts

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Wintermar Offshore Marine (WINS IJ)

Robust FY25 outlook Intact, driven by LT Contracts

WINS is mulling over another LT contract to secure the persistently strong daily charter rates.
Mgmt guides for a slightly higher utilization rate of 70%, but a lower capex of US$20mn as it looks for further vessel acquisitions.
We maintain a Buy rating on WINS with a TP of 610. Key risks include lower charter and utilization rates.

Utilization should grow upon more LT contracts

WINS is mulling over another LT contract for one of its PSVs in the international market. The vessel is currently undergoing maintenance and modification to fulfill the contract prerequisites, with the aim of securing the contract within 1H25. Thus, at present, there are 2 PSVs under LT contracts (at c.US$19k/day), 3 PSVs on spot contracts, and 2 PSVs under maintenance and modification, where all contracts cover domestic jobs. We noted that daily spot charter rates for PSVs in Asia-Pacific have been flattish at c.US$22,000/day since 4Q24 through Feb25. Thus, we expect stronger 4Q24 performance from higher utilization and rates.

Eyeing for heavy load barges

WINS bought 3 HLBs in FY24, of which 1 was delivered in late FY24, while the other 2 will be delivered by Feb25. After delivery, the ship will need to undergo a flagging procedure before taking on contracts. Mgmt. sees demand for HLBs to remain robust as the vessels are compatible with the construction of O&G rigs and renewable wind farms. Thus, it is considering building or acquiring more in FY25 as the backlog for newbuilds is considerably shorter at c.8 months vs. PSVs at c.2 years. Through the revamp of its mid-tier vessels, WINS has successfully achieved an avg. rate of US$5.8k/day in FY24, higher than its peak rate in 2014 of US$5.7k/day. Meanwhile, high-tiered vessel rates have yet to reach their peak of US$22.4k/day (FY24: US$14.6k/day).

FY25 outlook leads to a brighter path

The company has budgeted a lower capex of US$20mn for 2025 (vs. US$38.8mn in FY24), slated for vessel purchases such as PSV and HLB. However, this budget is tentative depending on potential deals and vessel availability for acquisition or sale. Furthermore, the FY25 vessel utilization target is set at 70% (vs. 68% in FY24) due to more ongoing LT contracts. Finally, management aims to continue paying dividends during this upcycle as the company is poised to record consistent profits with elevated daily charter rates.

Maintain Buy rating with a TP of Rp610

We maintain our Buy rating on WINS on robust growth outlook, with a TP of Rp610, based on 0.8x PBV and 6x FY25E PE. Our FY25 forecast assumes a utilization of 70% and a +15%/+7.5% increase in daily charter rates for its high-tier and medium-tier vessels. Key risks include lower daily charter rates and utilization.

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