- Shipping segment delivered net profits to TTA of Baht 530.3 million with TCE rate of USD 14,964 per day outperforming the net Supramax TC rate by 5% and the efficient OPEX cost lower than the industry by 20% in 2Q/2024.
- Offshore Service segment delivered net profits to TTA of Baht 59.5 million with the highest order book at USD 975.7 million in 2Q/2024.
- Agrochemical segment delivered net profits to TTA of Baht 34.4 million due to growth in Vietnam’s domestic fertilizer sales volume.
- Strong capital structure with low IBD/E at 0.42 times.
Thoresen Thai Agencies Public Company Limited (SET: TTA) reported revenues of Baht 9,541.6 million in 2Q/2024 which increased 46%QoQ driven by Offshore Service segment and the strong fertilizer sales of Agrochemical segment. Shipping, Offshore Service, Agrochemical, Food & Beverage, and Other Investments segments contributed 19%, 61%, 12%, 6%, and 2% to the consolidated revenues, respectively. In summary, TTA reported net profits of Baht 438.2 million in 2Q/2024, with cash under management of Baht 9.7 billion and low debt to total equity ratio and interest-bearing debt to total equity ratio of 0.42 times.
Mr. Chalermchai Mahagitsiri, TTA President and Chief Executive Officer, said: “Market disruption continued for a few months ago as conditions in the Red Sea remained challenged and the Ukraine war persisted, however, returned to normal levels in this period. In this environment, Thoresen Shipping continues to outperform the market. Mermaid has delivered higher revenues from decommissioning, transportation and installment (T&I) projects initiated in the Gulf of Thailand. Meanwhile, PMTA’s fertilizer sales revenues increased due to growth in Vietnam’s domestic fertilizer sales volume. However, we continue to operate in times of unprecedented change that come with unusual opportunities for growth across the areas in which we operate. We will try our best to ensure accretive performance of our assets and to deliver returns to our shareholders over the long term.”
Looking ahead to the full year of 2024 for the Shipping segment, Clarksons Research projects a 4.4% increase in ton-miles, while fleet expansion is projected at 3.1% in deadweight ton (DWT). The growth in dry bulk trade is primarily driven by increasing trade of grains (+4.4%), iron ore (3.1%), and minor bulks (+3.0%). In addition, global seaborne coal trade was estimated to increase (0.6%) driven by a recovery in steel-producing regions and the end of the ban on Australian imports to China.
Key Strategic Business Segment Performance
Shipping Segment:
Thoresen Shipping’s freight revenues were reported at Baht 1,800.9 million in 2Q/2024 which increased 7%QoQ mainly driven by revenues from chartered-in vessels aligned with the equivalent number of chartered-in vessels. Shipping segment TCE rate increased to USD 14,964 per day outperforming the net Supramax rate by 5%. Own fleet utilization rate remained high at 100% with the highest TCE rate of USD 21,985 per day. Meanwhile, vessel operating expenses (OPEX) were recorded at USD 4,157 per day. OPEX remained below the industry OPEX by 20%. In summary, Thoresen Shipping delivered net profits to TTA of Baht 530.3 million in 2Q/2024 and owned 24 vessels (22 Supramaxes and 2 Ultramaxes) with an average size of 55,913 DWT and an average age of 16.2 years.
Offshore Service Segment:
Mermaid Maritime Public Company Limited (Mermaid) recorded revenues of Baht 5,801.0 million in 2Q/2024, which increased by 85%QoQ largely from a new decommissioning and T&I project. Revenues from decommissioning, and T&I, subsea-IRM, and cable laying accounted for 60%, 30%, and 10% of Offshore Service revenues respectively.
Revenues from decommissioning and T&I significantly increased 224%QoQ driven by the commencement of a decommissioning and T&I project in the Gulf of Thailand as well as revenues from subsea-IRM grew by 7% QoQ, primarily due to expanding non-vessel projects in 2Q/2024. In addition, revenues from cable laying business significantly increased 36%QoQ mainly attributable to more projects, with no drydocking of cable lay vessels during this period. As a result, gross profits increased 18%QoQ to Baht 567.8 million. Therefore, EBITDA significantly grew by 20%QoQ to Baht 416.3 million.
In summary, Mermaid reported net profits to TTA of Baht 59.5 million in 2Q/2024, which strongly increased 764%QoQ and with the highest order book at USD 975.7 million in 2Q/2024.
Agrochemical Segment:
PM Thoresen Asia Holdings Public Company Limited (PMTA) reported revenue of Baht 1,151.0 million in 2Q/2024, which increased 62%QoQ from increasing fertilizer sales and factory area management incomes. Fertilizer sales revenues increased by 62%QoQ due to growth in Vietnam’s domestic fertilizer sales volume. Total fertilizer sales volume was recorded at 52.6 Ktons, increasing 63%QoQ from the domestic demand. Domestic fertilizer, in Vietnam, sales volume accounted for 88% of total fertilizer sales volume amounting to 46.1 Ktons. According to sales volume by product, single fertilizer sales volume was 12.5 Ktons, which increased 145%QoQ, and NPK fertilizer sales volume also increased 47%QoQ to 40.1 Ktons. However, sales of pesticides increased 83%QoQ to Baht 59.6 million. Service income from factory management grew 19%QoQ to Baht 32.4 million due to increasing warehousing demand and activities. Therefore, gross profits increased by 75%QoQ to Baht 174.8 million. Thus, EBITDA was Baht 102.6 million, rising 219%QoQ. In summary, PMTA delivered net profits to TTA of Baht 34.4 million, increasing 996% in 2Q/2024.
Food & Beverage
Pizza Hut is operated as a 70%-owned subsidiary of TTA. As of June 30, 2024, there were 186 outlets nationwide. All outlets were opened in the high traffic locations in major provinces.
Taco Bell, the leading American restaurant chain serving a variety of Mexican inspired food, is operated as a 70%-owned subsidiary of TTA. As of June 30, 2024, there were 29 outlets nationwide.
Other investments focus on the water and logistics sectors.
Asia Infrastructure Management (Thailand) Co., Ltd. (“AIM”), an 92.50% owned subsidiary of TTA, is the water contractor/service company. AIM also owns a concession to sell tap water in Luang Prabang, Laos, through a 100%-owned subsidiary.
