PRM Expanding Fleet to Boost Capacity, Confident of Continued Growth Driven by Surging Regional Oil Demand
PRM believes its stock, with its first trading day on 14 Sep, would be warmly welcomed by investors. Its management are seeking to increase the number of vessels in its fleet continuously over the next three years from the current number of 24 (as of 30 June) to support its qualitative and quantitative operational expansion due to its introduction of new routes to tap the demand for ships for transport of crude oil, petroleum products and liquid petrochemicals that is rising along with the greater oil demand as generated by the ongoing economic growth in the Asia-Pacific region.
Mr Chanwit Anakkul, Chief Executive Officer (CEO), Prima Marine Public Company Limited ("PRM"), Thailand’s largest integrated service provider for the marine transport and storage of crude oil, petroleum products, semi-finished oil products and liquid petrochemicals, which also provides transport ships to support the exploration and production of offshore petroleum and manages the oil and petrochemical industry’s fleet of vessels, serving domestic and overseas clients in the Asia-Pacific region, revealed that, after a well-received initial public offering (or IPO) of 650 million shares with a par value of THB 1 each, PRM has begun trading as a listed stock in the Stock Exchange of Thailand (or SET) on 14 Sep, under the ticker symbol “PRM”.
The company plans to increase its capability in the transport and storage of crude oil, petroleum products, semi-finished oil products and liquid petrochemicals, as well as improve support for exploration work and petroleum production offshore and the management of fleets. Major plans to expand the fleet between 2017-2019 include:
- Nine transport vessels of between 3,000-10,000 DWT each, with a projected cost of THB 2.340 billion. This will give the company an increased transport capacity of 3.800 billion litres a year. Investment will also be made on 11 large transport vessels composing of a 14,000 DWT ship, a Medium Range (MR) vessel, a Large Range (LR) vessel, an Aframax tanker and a Very Large Crude Carrier (VLCC), to handle the growth of the transport business and support the marine transport and FSU business. The total value of the project is THB 6.890 billion and is expected to increase the transport volume by another 16.700 billion litres per year.
- Expansion of the marine transport and FSU business to increase the capacity to store oil with the purchase of another four vessels. The project is worth THB 4.200 billion and will meet the growth of the marine transport and storage industry for crude oil and petroleum products in South-East Asia.
- The purchase of two floating, storage and offloading (FSO) vessels for oilrigs. Total project value is around THB 1.090 billion and will meet the growth of offshore oil exploration and production in Thai waters as well as those of neighbouring countries in South-East Asia.
“As of 30 June, we have 24 vessels. We seek to increase the number continuously over the next three years to improve our potentials in oil and liquid petrochemicals transport, both quantitatively and qualitatively, as well as expand the boundary for transport to new shipping routes, both domestic and overseas, such as those from Thailand to Myanmar, China and Japan. We will also expand the client base, especially those from neighbouring countries in South-East Asia with good growth prospects”, said the CEO.
Mr Manpong Senanarong, Managing Director of Kasikorn Securities Public Company Limited, in his capacity as financial advisor and co-lead underwriter, added that PRM, Thailand’s largest private firm that provides integrated service for the marine transport and storage of crude oil, petroleum products, semi-finished oil products and liquid petrochemicals, which also provides transport ships to support exploration and production of petrochemical offshore and manages the oil and petrochemical industry’s fleet of vessels, possesses more than 30 years’ experience in the business. This allows the firm to manage its fleet to cope with the growing oil demand in the Asia-Pacific region. It has also adopted a plan to increase its liquid petrochemical transport activities. Its post-IPO debt-to-equity (or D/E) ratio is expected to drop from the existing level of about 2, he said.
Miss Veena Lertnimitr, Executive Vice President, Primary Distribution Division, Siam Commercial Bank Public Company Limited, as financial advisor and on behalf of SCB Securities Co Ltd, co-lead underwriter for the IPO, noted PRM’s bright growth prospect, as the company seeks to enlarge its fleet to enhance competitiveness and the oil consumption demand in the Asia-Pacific region is growing at 3% annually. She added that the demand level reached the world’s highest at 1.557 billion tonnes over the previous year, which will contribute positively to the company’s future growth, and that the company’s annualised revenue growth rate over the past three years (2014-2016) stood at approximately 11%.