PT Sillo Maritime Perdana Tbk has allocated US$100 million of capital expenditure (Capex) to procure new ships. This year’s Capex is 82% higher compared to the 2021’s.
Founded in 1989, the publicly listed company is specializing in offshore support vessels for the oil and gas industry. It currently operates 22 ships, 13 of which are owned by the company’s subsidiaries.
Sillo President Director Herjati said most the US$100 million Capex came from both internal cash and bank loans. The company aimed to increase its volume capacity by purchasing new ships. Herjati did not go into details, but only said the company would at least buy a tanker among the planned procurement.
“As of the first half of this year, US$10 million has been absorbed and the remaining capital expenditure will be used in the third and fourth quarters of 2022,” she explained at the company’s public expose on July 20, 2022.
Samuel Sekuritas Indonesia analyst Farras Farhan said the vessel procurement was in line with the increasing production from Sillo’s partners. Big players in Indonesia’s oil gas and gas industry – including Petrochina International Jabung Ltd., Pertamina Hulu Energi OSES, PT Pertamina International Shipping and ConocoPhillips (Grissik) Ltd. – are among Sillo’s partners in short- and long-term rental contracts.
“We see that this capital expenditure is a positive effort from the management to encourage revenue growth from vessel charter contracts, both short-term and long-term contracts. Looking at the target of increasing oil production activity by one of the company’s clients, namely Pertamina Hulu Energi who set a target for oil and gas production in 2022 to reach 1 MMBOEPD [million barrels of oil equivalent per day] or up 16 percent yoy [year-on-year],” he wrote in his research.
While there has not been any major disruption on the shipping industry recently, Sillo’s major partners in oil and gas industry must take into account on the increasing gas prices due to the Ukraine-Russia war which may directly or indirectly affects the company’s growth.
