SET-listed Pilatus Marine, Thailand's largest liquefied petroleum gas (LPG) transport operator by capacity, is purchasing three used, large liquid-carrying vessels for a total of 1.05 billion baht in a move to expand its service overseas.
The company provides marine and land transport of LPG and leases vessels to other companies.
The three ships, each with a charter time of 15 years, will help Pilatus Marine increase its gross profit margin, which is expected to rise to a range of 20-25%, said Varawit Chimtawan, chief executive of Pilatus Marine.
The vessels, each priced at 350 million baht, are scheduled for shipment to the company between 2023 and 2025. The first ship is slated to be delivered to Pilatus next month, he said.
The ships are to serve customers operating marine transport for international routes.
Pilatus Marine operates 19 vessels, with sizes between 600-900 tonnes. Most of them are leased domestically under contracts of affreightment, widely known as COA, which are legally binding agreements between a shipowner and a charterer.
COA helps Pilatus Marine make gross profit margin in a range of 18-20%, said Mr Varawit.
Pilatus' largest customer is PTT Oil and Retail Business (OR), with COA accounting for 60% of the total.
WP Energy Plc makes up 35% of the COA proportion, with other clients representing 5% in the spot market.
Pilatus Marine plans to sign more COAs with prospective customers in Vietnam as demand for LPG in the country is rapidly growing, he said.
The company is conducting a feasibility study of the Vietnamese market and expects the business expansion to take shape next year, said Mr Varawit.
In the LPG transport business, Pilatus Marine was awarded a five-year contract by OR to transport LPG by trucks, said Thakrit Chimtawan, chief business development officer of Pilatus Marine.
The service is scheduled to start on Dec 1 this year.
He said Pilatus Marine plans to buy 43 new trucks to add to its fleet of 39 vehicles in order to serve OR.
The company expects revenue growth of 7.6% to 850 million baht this year, up from 790 million in 2022, as tourism should increase demand for its services.
Revenue should reach 1 billion baht next year, said Mr Varawit.
Revenue from COA and marine transport makes up 84% of the total, while 16% is from LPG truck transport. The proportion from truck transport is expected to fall to 6% in the future, he said.