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Jakarta Post

Sillo Maritime shares jump upon stock exchange debut

Oil and gas shipping company PT Sillo Maritime Perdana saw the price of its shares jump by double digits on its first trading day at the bourse on Thursday, as investors expect the company’s planned expansion to boost revenue growth this year

Stefani Ribka (The Jakarta Post)
Fri, June 17, 2016

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Sillo Maritime shares jump upon stock exchange debut

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il and gas shipping company PT Sillo Maritime Perdana saw the price of its shares jump by double digits on its first trading day at the bourse on Thursday, as investors expect the company’s planned expansion to boost revenue growth this year.

Sillo, the sixth newcomer on the Indonesian Stock Exchange (IDX) this year, saw its share price rise by 12.1 percent to Rp 157 (1 US cent) after Thursday’s opening from its initial public offering (IPO) price of Rp 140. By the closing of the trading day, the price surged by 70 percent to Rp 238 apiece.

IDX president director Tito Sulistio said investors were encouraged to tap the potential of Sillo, the country’s ninth biggest floating, storage and offloading (FSO) service provider in terms of revenue. FSO is a vessel or tanker that stands by offshore sites of oil and gas producers to deposit the oil and gas before being taken out by other vessels. Last year, the company booked US$15.6 million in revenue from the business.

“Sillo Maritime has the ninth biggest revenue in the [FSO] transportation sector. Not only employees
monitor [their shares] but also investors,” he said during the company’s IPO ceremony, which was also attended by Industry Minister Saleh Husin.

On its website, Sillo said that it provided various kinds of vessels for companies in the upstream oil and gas industry, including tug boats, crew boats, self propelled oil barges (SPOB), the FSO, and utility vessels.

Sillo financial director Theresia Herjati said the company’s decision to go public had been made at the “right moment”, as Sillo was seeking funds to acquire smaller shipping company PT Suasa Benua Sukses (SBS) to boost growth amid the plunge in global oil prices leading to lower rental prices.

SBS focuses more on gas shipping services, while Sillo focuses on oil shipping. The planned purchase 50.84 percent of the shares in SBS valued at around Rp 80 billion would be funded by the IPO proceeds, said Theresia.

“Our revenue is slowing down now, as one of the boats is undergoing upgrades, so it is not operating. The acquisition will help us boost revenue and profit,” she added.

Sillo ceased the operation of its sole FSO vessel, “CNOOC 114”, last July after 11 years in operation, as its client, China National Offshore Oil Corporation-Southeast Sumatra Ltd. (CNOOC SES), required upgrades for the vessel.

The halted operation of the CNOOC 114 saw the company’s revenue plunge by 23 percent on an annual basis to $15.6 million and its comprehensive profit slide by 24.7 percent to $4.4 million in 2015. The vessel is scheduled to be in operation again this November at the Cinta oil terminal in the Java Sea, until 2023, when its contract with CNOOC SES expires.

During the January-March period this year, Sillo booked more than $4 million in revenue and around $1 million in profit. It targets revenue of $20 million this year and profit of $6.8 million.

The acquisition of SBS, scheduled to be concluded this month, will add three new vessels to Sillo’s existing eight. All 11 vessels, except for CNOOC 114, are making money, as they are all operating under long-term contracts with various firms up to 2023.

Sillo operational director Sumanto Hartanto said the fluctuation of global oil prices over the past two years had not affected the firm significantly, as it served the oil and gas production sector, not exploration.

Nevertheless, some clients were asking to renegotiate rental prices, he said. The rental price for CNOOC 114, for example, had dropped to $28,250 per day from $35,000 in previous years.

“When the oil price rebounds, we believe revenue will not be affected, as clients will no longer request rental discounts,” he said.

—JP/ Stefani Ribka

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