SEAMECLTD - Seamec Ltd Share Price

During the earnings call held on August 14, 2025, Seamec Limited's management provided an optimistic outlook highlighting the ongoing growth trajectory of the offshore oil and gas industry. They noted that global oil demand is expected to reach 103.9 million barrels per day in 2025, with the offshore drilling market anticipated to grow from US$36 billion in 2023 to over US$80 billion by 2033, representing a compound annual growth rate (CAGR) exceeding 8%.

Key points mentioned include:

1. Operational Efficiency: Seamec achieved a 93% efficiency factor across its fleet during Q1 FY '26, with the Seamec Princess generating additional revenue by completing Pipeline Replacement Projects ahead of schedule.

2. Fleet Expansion: The acquisition of two vessels, Nusantara and Seamec Anant, is in progress. Nusantara's acquisition is expected to be finalized in August 2025, with operational deployment planned for December 2025. Seamec Anant's acquisition is expected to be completed by October 2025.

3. Financial Performance: Consolidated Q1 FY '26 revenue reached INR 231 crore, a 4% increase year-over-year. Consolidated EBITDA rose significantly by 45% to INR 117 crore, with profit after tax growing to INR 76 crore from INR 50 crore year-over-year.

4. Strategic Focus: Management reaffirmed their commitment to optimizing the fleet and securing value-accretive contracts, ensuring sustained financial discipline. They anticipate FY '25-'26 to be a year of execution, consolidation, and growth bolstered by the vessel acquisitions.

5. Market Positioning: Seamec is poised to take advantage of government initiatives like the Maritime Vision 2030 and the Sagar Mala program aimed at boosting India's energy sector, focusing particularly on offshore support vessels and accommodation barges to diversify operations.

Overall, Seamec's management expressed confidence in their strategy and the financial sector's fundamentals, setting a positive tone for the future.

Questions and Answers from the Earnings Transcript of Seamec Limited:

1. Harshit Jain: "The management fees has been around 3% to 4% of the sales and it's a significant increase over the years. So when can we expect it to come down?"

Rajeev Goel: "The management fees we are currently paying are within market benchmarks. We have appointed Grant Thornton for a comprehensive review, and we'll act on their recommendations. If it suggests that it should be reduced, we'll gladly consider it. If not, we believe it's justified."

2. Harshit Jain: "How much have we invested in our U.K. business, and when do we expect to bring back the money?"

Rajeev Goel: "We planned to complete this project by March '25 but now expect approximately 12 to 15 months more. Once finished, we will bring half of the investment back for global operations."

3. Harshit Jain: "What is the cumulative loss projection until FY '27, and how much will it affect ROCE?"

Rajeev Goel: "Costs incurred for our U.K. operations are capitalized as capex, thus not affecting operational loss significantly. Last year's operational loss was INR 28 crores and is expected to reduce further. We converted loans to preference shares to stop interest costs."

4. Harshit Jain: "What's the status on the Anant and Nusantara acquisitions and their revenue potential?"

Sunil Gupta: "Nusantara's acquisition will be completed in August, followed by dry docking for 3 months. For Anant, we expect regulatory approvals by October. Revenue potential for FY '26 and '27 should achieve margins of about 30% to 35%."

5. Hitesh Agarwal: "How is Seamec positioning itself for the growth in deepwater projects, particularly in West Africa and Brazil?"

Rajeev Goel: "Currently, we're focused on long-term charters with our fleet, primarily on the East Coast of India. We're not exploring Africa, as we see significant opportunities in our domestic market."

6. Hitesh Agarwal: "Do you have the capability for ultra-deepwater assignments and are you considering partnerships?"

Rajeev Goel: "We are expanding our scope from diving operations to subsea operations, particularly in the Middle East, where we have established credibility. However, ultra-deepwater diving requires different capital and strategy, which is not our focus right now."

7. Jayshree Bajaj: "How are you balancing maintenance with replacement capex, and what ROCE would you retire a vessel at?"

Rajeev Goel: "We are actively monitoring the aging of vessels and have brought in new ones, planning to gradually retire older vessels. An effective ROI of $30,000 per day on older vessels provides substantial returns."

8. Darshan Shah: "With the Seamec Princess demobilized for monsoon, how does this affect utilization in Q2 and margins?"

Rajeev Goel: "Monsoon limits deployment, historically resulting in minimal revenue. Our strategy focuses on maintaining a breakeven in Q2 while planning for robust deployments in the subsequent quarters."

9. Deepak: "Regarding the insurance claim for Seamec Diamond, what was the nature of this claim and its implications?"

Rajeev Goel: "The claim was related to maintenance issues upon acquisition, covered by insurance. After verification, we received the claim which is now treated as other income; no further claims are expected."

10. Deepak: "Can you elaborate on the reason behind exiting the tunnel construction JV?"

Rajeev Goel: "Yes, we decided to close the tunnel project as it signified a strategic shift back to our core MSV operations. All financial implications were accounted for, and we have no further intentions to engage in infrastructure projects in the near term."