Bangkok--Jan 25--Thoresen Thai Agencies
In response to the rising growth of the offshore oil and gas industry, Thoresen Thai Agencies Plc (TTA), a leading shipping conglomerate, has acquired a majority share in its former affiliated company, Mermaid Maritime Ltd. (Mermaid), and plans to expand its offshore maritime business.
The expansion should increase Mermaid’s multinational client base from the lucrative offshore oil and gas sector and is considered a significant strategic move in line with the dramatic rise of world oil prices and strong energy demand.
M.L. Chandchutha Chandratat, managing director of TTA, said TTA has spent Baht 1.174 billion to increase its shares in Mermaid to 63.14 per cent. The company also raised Baht 2.214 billion in loans from financial institutions, and together with the new equity capital, acquired more assets to serve the growing offshore-related services.
Mermaid has operated various offshore-related services for more than 23 years. During the initial period, Mermaid focused on safety, with particular emphasis on the maintenance and servicing of life rafts and the provision of SOLAS equipment.
The company decided a year ago to embark on an aggressive program to further expand its operations in sub-sea service work and develop a regional contract drilling business for the offshore oil and gas industry.
Its two drilling rigs, the MTR-1 and the MTR-2, were acquired in April and July 2005, respectively. The company’s offshore sub-sea operations plan to acquire two more vessels to expand business.
“The energy-related services sector is a growing industry as seen by rising oil prices. Offshore oil and gas exploration is expected to grow considerably over the next five years. Our expansion will serve the growth of oil and natural gas businesses in the Southeast Asian region.
“Our two drilling rigs have been contracted by major oil companies through 2007 and 2009, respectively. This will translate into long-term steady income.” said M.L. Chandchutha.
Meanwhile, TTA still focuses on its fleet of dry bulk vessels. In addition to consistent attention on its existing clients, it is seeking new clients around the world to cover the shipping of various types of cargo, including coal, cement, steel, fertilizer, rice, and other agricultural products.
With a variety of services, expertise, and quality built up for over 101 years in the maritime business, TTA has more than 800 regular clients around the world. It also prides itself as Thailand’s largest Thai-flagged carrier with 48 vessels in operation.
At the end of September 2005, TTA’s shipping business increased its cargo volumes by 69 per cent to 13.11 million tons. Its voyage revenues grew to Baht 14.518 billion, or a rise of 43 per cent. Its net operating cash flow totaled Baht 7.022 billion, or a rise of 35 per cent, and its net profit from shipping-related businesses amounted to Baht 166.483 million, or a rise of 9 per cent. The company’s consolidated net profits were Baht 5,948 million, or a rise of 37 per cent.
Due to the strong demand for dry bulk shipping, the company last year was able to time charter almost 50 per cent of its available capacity. The company has been able to time charter another 39 per cent of available capacity for 2006 and 21 per cent of available capacity for 2007. These contracts ensure TTA of steady cash flows, which enables the company to have enough reserves to spend more on improving its fleet and invest in related businesses.
TTA remains confident in its policy to strengthen its existing core businesses and increasing new streams of revenue, which should result in a stronger balance sheet and increased cash flow. The company’s debt-to-equity ratio was 0.95 x at the end of September 2005. During the next four years, the company will retire more than 60 per cent of its debts. Therefore, its financial performance will be more strengthened, allowing the company to acquire new vessels in the future.
For further information
Khun Bang-orn Kaewbovorn, 02-663-3226-9 Ext 68
Mobile: 01-904-7907 End.