Message from the Chairman

Prima Marine Public Company Limited (the “Company”) has stepped to be the listed company in the Stock Exchange of Thailand since 2019. Until present, the Company has developed and adjusted an investment and continuous investment strategy both in term of internal management, improvement of the operation standard to achieve the acceptance of both domestic and foreign oil companies, and adjustment of each type of business proportion to be consistent with the market and maritime transport industry situation under fluctuation based on the change of the global society context in environment and technological development affecting a national energy industry.

The year of 2019 has been regarded as “the Year of Leap Forward Growth” of the Company, particularly in the Floating Storage Unit Business (“FSU Business”) and Domestic Oil and Petrochemical Tanker Business. After adjusting an investment plan for business expansion from the end of 2018 to be consistent with the change in industrial situation, FSU Business could generate revenues up to 1,940.9 million baht, increasing by 39.1% from 2018 and generate the revenue from the Domestic Oil and Petrochemical Tanker Business for 2,268.1 million baht, increasing by 19.5% from previous year. As the result of the adjustment on the said business proportion adjustment plan, the proportion of the revenue from FSU Business which is the business with long-term charter was high up to 36.3% of total revenues in 2019. The proportion of almost of the revenue from the Domestic Oil and Petrochemical Tanker Business with Long-Term COA Contract with oil companies both in Thailand and overseas was high up to 42.4% of total revenues. The vessel service fee of the Domestic Oil and Petrochemical Tanker Business is mutually agreed with the customers in a long-term agreement whereas the Company can increase the rate of service fee based on market price of the fuel oil, resulting in no impact on the Company’s gross profit due to a fluctuation of the fuel oil price. Such business expansion has caused its revenue from rendering of services 5,346.7 million baht and net profit 1,122.5 million baht in 2019, increasing by 19.4% and 52.6 % from 2018, respectively.

According to an enforcement of IMO2020 measure by International Maritime Organization (IMO), the said measure prescribes that the international shipping operators must use Low Sulphur Fuel Oil (LSFO) (0.5% by weight) as fuel in replacement of High Sulphur Fuel Oil (HSFO) (3.5% by weight) from 1 January 2020 onwards, except few vessels installed with air pollution treatment system or Scrubber on the vessels to capture Sulphur from air pollution derived from the vessel operation. Thus, the usage demand of LSFO (0.5% by weight) has been highly increased, resulting in an increase of the furnace oil traders in using FSU Vessels for storing and mixing furnace oil to acquire LSFO (0.5% by weight) in accordance with the IMO requirement for selling to the international sea-going vessels. Due to FSU Vessel’s ability to store and mix various kinds of oils, and flexibility in oil transfer from oil tankers of all types and sizes when compared with oil storage and mixing in the on ground storage tanks with limitation of their sizes and number of wharfs. In 2019, the transnational oil companies both from Europe and Asia have selected to use FSU services of the Company for more three vessels due to the Company’s success on the international standardization of its operation, decision flexibility, and rapid investment to meet the customer demand. Upon combination with the existing five vessels that have rendered services, total of 8 FSU Vessels of the Company for services at the end of 2019 consist of one Vessel which is the first FSU Vessel of Thailand and seven Vessels for services in Malaysia, or market share of 41% of FSU Business that have entirely on service in Malaysia. Moreover, the Company has been able to negotiate for increasing service fee of FSU Vessels based on an increase in LSFO mixing and storage demand.

The continual growth of the Company’s Domestic Oil and Petrochemical Tanker Business has been corresponding to an increasing ratio of the domestic fuel oil consumption at average of 4% per year. The Company has been the top dominant of Thailand market share.

The Company’s business expansion purpose in the past 2019 by accepting five new built 3,000 DWT capacity vessels has supported the replacement of three old vessels (with 1,800 - 2,000 DWT capacity) and the fulfillment of an increasing customer demand for two vessels. All of the new vessels are the vessels with Double Hulls and designed as surfboat to ensure an increase in tonnage. Moreover, the Company has held shares in Big Sea Co., Ltd. (“Big Sea”) for 80% of total ordinary shares in 2019 due to its purchase of the additional ordinary shares of Big Sea for 10% under the agreed purchase and sale agreement for shares. Big Sea has also expanded its business by accepting the additional one new built 5,300 DWT capacity vessel to support an increasing customer demand. Therefore, upon combination of all domestic tankers of the Company and Big Sea, there have been total of 31 vessels with tonnage capacity of 101,363.03 DWT at the end of 2019 when compared with 26 vessels with tonnage capacity of 83,251 DWT at the end of 2018.

The successful operation of the aforesaid expansion of the FSU Business and Domestic Oil and Petrochemical Tanker Business will create a secure business foundation for the Company in long run. Meanwhile, the Company has established the strategy for retaining the customer base and service levels in other areas consisting of Offshore Business, International Oil and Petrochemical Tanker Business, and Ship Management Business in 2019. The Company has been ready to expand its business to continuously satisfy the customer demand at the time of which market situation is favorable, and has still aimed at looking for an extension opportunity of Trading Business to the neighboring countries in Southeast Asia Region, and similar businesses for expanding revenue base and creating a variety of businesses in order to ensure the Company’s long-term efficiency in coping with market fluctuation.

Domestic trading
vessel totaling 31 vessels

tonnage capacity of 101,363.03 DWT

revenue from rendering of services 5,346.7 million baht

net profit 1,122.5 million baht

in 2019

In respect to the management, the Company has observed the Principle of Good Corporate Governance and created sustainability for business operation in accordance with good governance at the same time, under responsibility on all parties of the stakeholders and environmental and social care. In 2019, the Company was graded for assessment of Five Stars or “Excellent” CG score from a survey of the 2019 Corporate Governance Report of Thai Listed Companies (CGR), conducted by Thai Institute of Directors (IOD) under support of the Stock Exchange of Thailand. The Company has been certified as Collective Action Coalition Against Corruption (CAC) due to its serious emphasis on anti-corruption, to be 1 of 417 companies being certified by 953 companies which have declared their intention to participate in the Project.

In this occasion, on behalf of the Board of Directors, I would like to deliver the gratitude to the group of the executives and all employees in working collaboration with will and dedication, resulting in the Company’s high success in 2019; as well as deliver the gratitude to the shareholders, supporters, and stakeholders, as well as all related parties, for their well consistent trust, confidence, and support on the Company. You can rest assured of the Company’s business operation by observing the good governance for the stable growth and maximum benefit of the stakeholders in all sectors.

Accepting new build vessel
cupacity 3,000 DWT

5 vessels

Mr. Bowon Vongsinudom
Chairman of the Board of Directors