Improving offshore markets have helped Malaysian offshore support vessel (OSV) builder and charterer Sealink International to cut the red ink.
The company saw losses for the first three months of 2023 shrink to MYR 7.2m ($1.56m) versus the loss of MYR 8.8m seen in the corresponding period last year.
The Kuala Lumpur-listed company attributed the improvement in its financial performance to higher vessel utilisation during the quarter.
Sealink said it was “optimistic about its prospects going forward” as it expects to achieve better results on the back of rising demand for its vessels.
“We are of the opinion that 2023 could be a bright year for the oil and gas industry, by and large, mirroring the outlook that Petronas has cast on the prospects of the sector,” the company said.
“Based on the release of the Petronas Activity Outlook 2023-2025, the activity outlook for Petronas remains positive, in line with the continued recovery that we have seen throughout 2022.
“Specifically, Petronas mentioned that this is positive for activities relating to repair and maintenance activities required to maintain the integrity of offshore facilities.”
As a result, Sealink said it expects the demand for offshore support vessels is expected to remain steady for the rest of this year, especially for vessels supporting drilling and wells projects.
The company said it expects capital-expenditure spending to “continue its upwards trend in 2023”, surpassing pre-pandemic levels, on the “heels of the massive under-investment throughout the past few years”.
Sealink said just as encouraging as the acceleration in demand for OSVs is the continued reduction in the available supply of OSVs.
“The number of OSVs currently available is very limited, indicating that the supply of vessels will continue to decline gradually,” it said.
“We believe this imbalance in supply and demand will continue to provide the opportunity for day rate and utilisation to increase.”
The improving markets have also enabled Sealink to improve its balance sheet with an 11% reduction in its term loans to MYR 17m.
“This speaks well of the viability of the group’s business and, at the same time, with reduced gearing the group will have a stronger balance sheet to take on additional financing to fund expansion when opportunities arise,” it said.
