Liquid dreams: Thailand’s Pilatus Marine charts global growth with 1.05 billion baht vessel acquisition

Pilatus Marine, a SET-listed company and Thailand’s leading liquefied petroleum gas (LPG) transport operator, is set to acquire three large used liquid-carrying vessels for a total cost of 1.05 billion baht. This move is aimed at expanding their services overseas.

Operating in both marine and land transport of LPG, Pilatus Marine also leases vessels to other companies. The incoming ships, each having a charter time of 15 years, are set to boost the company’s gross profit margin. According to Pilatus Marine Chief Executive Varawit Chimtawan, the gross profit margin is predicted to surge to about 20-25%.

Each of the vessels, priced at 350 million baht, is set to be shipped to the company between 2023 and 2025. The first vessel is due to be delivered to Pilatus next month. These ships are intended to serve customers engaged in marine transport on international routes.

Pilatus Marine currently operates 19 vessels, with capacities ranging between 600 to 900 tonnes. Most of these are leased domestically under contracts of affreightment (COA), which are legal agreements between a shipowner and a charterer, Varawit explains.

“COA enables Pilatus Marine to achieve gross profit margins within 18 to 20%.”

PTT Oil and Retail Business (OR) is Pilatus’ largest customer, with COA accounting for 60% of the total. WP Energy Plc accounts for 35% of the COA proportion, with the remaining 5% attributed to other clients in the spot market.

Pilatus Marine is also targeting the Vietnamese market, with Varawit saying the company is planning to sign more COAs with prospective customers as the demand for LPG in the country is witnessing a rapid surge.

“We are conducting a feasibility study of the Vietnamese market and expect the business expansion to take effect next year.”

In the LPG transport sector, Pilatus Marine has landed a five-year contract from OR to transport LPG by trucks, revealed Thakrit Chimtawan, chief business development officer of Pilatus Marine. The service is slated to commence on December 1 of this year, reported Bangkok Post.

To enhance its service to OR, Pilatus Marine plans to add 43 new trucks to its existing fleet of 39 vehicles. The company anticipates a revenue growth of 7.6% to reach 850 million baht this year, up from 790 million last year, driven by the expected surge in demand for its services due to increased tourism.

For next year, Varawit projects the revenue to reach 1 billion baht. Currently, 84% of the total revenue comes from COA and marine transport, whereas 16% is derived from LPG truck transport. However, the proportion from truck transport is expected to drop to 6% in the future, he concluded.

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