SEAMEC LIMITED
Q1 FY26
Call date · August 14, 2025
1 · Management Commentary
Key Positives
- Consolidated revenue for Q1 FY26 grew 4% YoY to INR 231 crores.
- EBITDA rose 45% YoY to INR 117 crores; PAT increased to INR 76 crores from INR 50 crores.
- Operational efficiency factor at 93% for the quarter.
- Successful completion and extension of key projects (e.g., Seamec Princess on Pipeline Replacement Projects).
- Accelerated dry dock completion for Seamec 2, saving 20 days.
- Strong contract visibility with most fleet on long-term charters.
- Acquisition of Nusantara and Seamec Anant vessels progressing as planned.
Key Negatives
- UK subsidiary continues to incur losses, though reduced YoY (INR 28 crores loss in FY24 vs INR 66 crores in FY23).
- Q2 expected to be seasonally weak due to monsoon-related fleet demobilization.
- No specific revenue or margin guidance provided due to business volatility.
- Management fees as a percentage of sales have increased, pending review.
Forward Guidance
- Capex: Acquisition of Nusantara to complete in August 2025 (deployment from December 2025); Seamec Anant acquisition expected by October 2025.
- New products/segments: Continued diversification into offshore support vessels and accommodation barges.
- Expected client wins/losses: No major losses indicated; strong contract pipeline with ONGC and Middle East clients.
- Revenue/margin outlook: Support vessels expected to deliver 30–35% margins; Q2 to be seasonally weak, but full-year outlook positive.
- Strategic initiatives: Focus on operational excellence, cost control (crew pooling, reduced dry dock periods), and expanding presence in Middle East and North Sea markets.
2 · Q&A Highlights
Q 1 (Composite): What is the outlook on management fees, and will they be reduced?
A (Management):
• Fees are within market benchmarks; Grant Thornton is reviewing related party transactions and recommendations will be implemented as appropriate.
Q 2 (Composite): What is the status and financial impact of the UK business?
A (Management):
• UK investment is for global operations and North Sea market entry; project completion delayed by 12–15 months, but losses are reducing and part of the investment will be repatriated post-completion.
Q 3 (Composite): What is the deployment and revenue potential for new vessels (Nusantara, Seamec Anant)?
A (Management):
• Nusantara acquisition to complete in August 2025, deployment from December; Anant by October 2025; both to be on long-term charters with expected margins of 30–35%.
Q 4 (Composite): How is Seamec positioned for deepwater/ultra-deepwater projects and overseas expansion?
A (Management):
• Focus remains on air and surface diving; not entering deepwater segment currently; expanding presence in Middle East (not Africa/Brazil); technical capability for ROV operations already present.
Q 5 (Composite): How is the company managing fleet aging, maintenance, and replacement capex?
A (Management):
• Actively replacing older vessels with new ones; older vessels to be phased out over next 5 years; maintenance costs declining due to younger fleet.
Q 6 (Composite): What is the order book status and contract visibility?
A (Management):
• Strong order book with most vessels on 2–4 year contracts; only one vessel on spot market; high fleet utilization expected for FY26.
Q 7 (Composite): What are the cost control measures and margin sustainability plans?
A (Management):
• Focus on reducing maintenance/dry dock costs, crew pooling, and deploying newer vessels to improve cost efficiency.
Q 8 (Composite): What is the impact of government initiatives and sector tailwinds?
A (Management):
• Positive for long-term business; Seamec will benefit as new oilfields become operational over next 5–7 years.
3 · Other Key Numbers
- Consolidated revenue Q1 FY26: INR 231 crores
- Consolidated EBITDA Q1 FY26: INR 117 crores
- Consolidated PAT Q1 FY26: INR 76 crores
- Standalone revenue Q1 FY26: Not disclosed
- Standalone EBITDA Q1 FY26: INR 116 crores
- Standalone PAT Q1 FY26: INR 80 crores
- ROC for the quarter: 11%
- ROE for the quarter: 10%
- Operational efficiency factor: 93%
- UK subsidiary operating loss FY24: INR 28 crores (vs INR 66 crores in FY23)
- Seamec 3 average charter rate: $50,000 per day
- Typical support vessel margin: 30–35%
- Seamec Princess additional revenue days in Q1: 18 days
- Seamec 2 dry dock completed 20 days ahead of schedule
- Insurance claim for Seamec Diamond: Not disclosed (amount)
- Number of vessels in fleet: Above 10 (exact number not disclosed)
- Percentage of fleet on long-term contracts: All except one vessel
- Q1 operational efficiency: 90% (also stated as 93% elsewhere)
- Management fees as % of sales: 3–4%
- Order book duration for new vessels: 3–4 years (Nusantara, Anant)
- Seamec Glorious barge works 7 months/year (non-monsoon period)
- Seamec 2 expected to return to field by September 10, 2025
- Seamec Princess completed season on June 17, 2025 (vs projected May 30, 2025)
- No specific revenue/margin guidance for FY26 provided