SEAMEC Q1 FY27 earnings call

SEAMEC Ltd reported a strong Q1 FY27, with consolidated revenue growing 41% year-on-year to INR 297 crores, up from INR 211 crores in the previous year. Consolidated Profit After Tax (PAT) increased to INR 81 crores, compared to INR 76 crores in Q1 FY26, representing a 6.5% YoY growth. The company achieved a consolidated EBITDA of INR 124 crores, translating to an EBITDA margin of approximately 41.75%, which aligns with management's target range of 40-42%. This performance was driven by healthy fleet utilization, efficient project execution, and disciplined cost management.

Management highlighted a healthy structural growth in the global offshore energy industry, fueled by increasing focus on energy security, offshore exploration and production, and infrastructure investments. Geopolitical developments have reinforced the importance of conventional oil and gas, supporting continued investment. This environment is creating sustained opportunities for specialized offshore vessels and marine services, with strong demand and encouraging charter rates. The company remains bullish on DSV demand for the next 3-5 years, expecting stronger demand once potential restrictions in regions like Iran are lifted.

The Middle East is a key growth market for SEAMEC, with Saudi Arabia, Qatar, and Abu Dhabi identified as high-opportunity regions. The company's operations in the region have consistently delivered strong performance. SEAMEC is actively pursuing fleet modernization and expansion, with an intent to grow its fleet over the next two years. This strategy includes selectively evaluating opportunities that enhance capabilities while maintaining disciplined capital allocation, aiming for a 15-20% revenue CAGR over the next 3-5 years.

SEAMEC is in the final stages of acquiring the Seamec ANANT vessel for USD 70 million, with the transaction expected to close by the end of August 2026. This acquisition is a binding agreement and will be financed through a 50-50 mix of internal equity and loans. The vessel is anticipated to commence operations on its existing ONGC contract within Q2 FY27, following statutory formalities and without requiring a dry dock. Management expects Seamec ANANT to achieve a high utilization rate of 95-98% from its deployment.

While overall fleet utilization was healthy, the Paladin vessel was non-operational in Q1 FY27 due to a conflict in the Middle East, leading to incurred costs without revenue; however, it has since resumed operations in Q2. Additionally, Seamec Princess, Seamec III, and Seamec Glorious were off-hired during the monsoon period (May to October), a known idle period for EPC contracts. The company utilized this time for planned dry docking of Seamec Princess to minimize future revenue loss. SEAMEC is also progressing with the liquidation of a bulk carrier and is involved in arbitration for the Pearl vessel.