SEAMEC Ltd Management Discussions

1. INDUSTRY STRUCTURE AND OUTLOOK

The global shipping industry is the backbone of International Trade. Considered to be the biggest sector in the World in terms of dollar value, the Oil and Gas Industry is global powerhouse employing hundreds of thousands of workers worldwide as well as generating hundreds of billions of dollars globally each year. In summary, the offshore oil and gas industry is for growth in 2025, driven by increasing demand, technological advancements, and favourable policy changes, despite facing challenges related to supply chain costs and geopolitical tensions.

Global Crude Oil Prices emanating out of geopolitical tensions often led to oil price volatility.

Global oil demand is anticipated to rise to 103.9 million barrels per day (mb/d) in 2025. The offshore drilling market is expected to grow significantly, with a forecasted value of USD 80.64 billion by 2033, up from USD 36.60 billion in 2023, indicating a compound annual growth rate (CAGR) of 8.22%.

On the technological advancement, deep water/ ultra-deep water excavation enabled by AUV, ROV and AI Driven analytics. Major oil companies, increasing in CAPEX, mostly in the vision of South America, West Africa and Brazil.

W estern sanctions on Russia have reshaped energy markets. However, India has benefitted from discounted Russian crude, helping to offset some of the economic pressures caused by high international oil prices.

U .S. sanctions on Iran have severely impacted ability to import cheaper Iranian crude. This has forced India to rely more on costlier alternatives, increasing its energy import bill.

High oil prices increase Indias import bill, leading to inflationary pressures as petroleum is a key input in transportation, manufacturing, and agriculture. Indias global commitments to reduce carbon emissions often come into conflict with its need to secure affordable fossil fuels. Geopolitical scenarios, such as European countries pushing for renewable energy investments, can influence Indias energy policies.

Geopolitics often accelerates Indias push for solar and wind energy projects as part of its energy mix to reduce reliance on imported oil and gas.

Advances in extraction technologies are making previously unreachable reserves accessible, particularly in deepwater and ultra-deepwater regions. Major oil companies are increasing their capital expenditures on offshore projects, signaling a robust investment climate.

A conservative growth is expected in offshore oil and gas-related Engineering, Procurement, and Construction (EPC) contracts, with a total projected value of approximately USD 54 billion. This growth reflects ongoing challenges such as supply chain cost inflation that have affected project timelines since 2022.

Geopolitical scenarios have a significant impact on Indias oil and gas industry, given its reliance on imports for meeting domestic energy demands. India imports over 85% of its crude oil requirements and around 50% of its natural gas. This makes the country highly vulnerable to global geopolitical shifts.

Geopolitical factors have also led to rising natural gas prices globally, affecting Indias domestic industries reliant on LNG, such as power generation, fertilizers, and transportation. Geopolitical tensions can deter foreign investments in Indias upstream oil and gas sector due to concerns about global supply chain stability.

The growth in offshore projects is expected to create a demand for skilled professionals, including drilling engineers, ROV operators, and health, safety, and environmental specialists. Competitive compensation packages are anticipated due to the high demand for technical roles.

Another dimension to geopolitical uncertainties, such as sanctions or trade restrictions, can deter foreign companies from investing in Indias oil and gas sector. The global shift toward renewables and reduced financing for fossil fuel projects make it harder to attract investment in exploration activities. Indias aggressive push towards renewable energy like Solar, Wind and Green Hydrogen is diverting attention and Investment from fossil fuel explorations. Growing awareness of climate change and environmental issues has reduced public and investors enthusiasm for fossil fuel projects. Fluctuations in global oil prices discourage exploration investments, as low oil prices make domestic production less competitive compared to imports.

Instability in neighboring regions attribute to geopolitical risk and adds another layer of complexity to Indias energy security, as disruptions in transit routes or pipelines affect supply reliability.

In India, there are some significant challenges.

Increasing domestic oil and gas exploration faces a range of obstacles. These challenges span across technical, economic, regulatory, and environmental domains.

Automation underwater vehicles (AUV) and

Remotely Operated Vehicles (ROV) are critical for operating underwater survey, pipeline inspection and maintenance in deep water and ultra deep water environments. These technologies reduce the need for diverse and improve safety in offshore operations. India needs more strategic planning for these resources.

Advanced exploration and production activities require highly skilled professionals such as geologists, petroleum engineers and deep-water drilling specialists. India faces a shortage of such skilled personnels. Many skilled professionals in Oil and Gas sectors move to countries with more lucrative opportunities, leaving a talent gap.

Indias pipeline infrastructure for transporting Oil and Gas from exploration sites to refineries or consumers is under-developed, particularly in remote and offshore regions. Insufficient storage facilities for crude oil and natural gas as well as limited processing capacities, pose challenges to scaling up domestic production. Exploration in remote areas, such as North-East or Offshore regions faces logistic problems due to road, port and transport infrastructure.

Way Forward for India i. Diversification: Continue diversifying energy import sources to reduce dependency on the Middle East. ii. Domestic Exploration: Increase investments in domestic oil and gas exploration to reduce import reliance. iii. Energy Transition: Accelerate renewable energy adoption to decrease fossil fuel dependency. iv. Strategic Reserves: Expand SPR capacity to mitigate global supply shocks.

With a vast coastline over 7500 kms, India has potentiality to emerge as a significant player in global maritime industry. The Indian Government consistently pursuing to utilize its marine potential to unlock significant economic benefit. Two key initiatives, the "Maritime Vision 2030" and "Sagarmala" program already launched to propel further growth.

In India, in response to the rising demand, the government has implemented several regulatory measures. Multiple areas of the industry, like oil refineries, natural gas, and petroleum-based goods, have been able to attract 100% Foreign Direct Investment (FDI) as a result.

Despite some adversaries, Indias energy demand and economic development is poised to go hand in hand resulting likely greater demand for oil and gas in the coming years as well. This will undoubtedly make the sector attractive to new investors.

The Indian government efforts for E&P operations covering a total area of 1 million sq km offshore areas in West Coast, East Coast and the Andaman and Nicobar Islands is underway to provide a boost to the oil and gas exploration.

2. OPPORTUNITIES AND THREATS

SEAMEC continues its unchallenged reputation as a prominent player in DSV Sector in India. SEAMEC through a strategic planning increasing Fleet strength in consonance with the market dynamics and taking appropriate action complemented by strong vision. This makes SEAMEC a dynamic leader.

Age restrictions by Government are a threat for the older Tonnage. Management is closely monitoring these aspects to undertake appropriate timely redressal measures.

Diversifying to other sections of Fleet such as OSVs and Accommodation Barge has already been initiated.

The enhanced combination of Fleet will strengthen the Companys position in diverse area.

3. BUSINESS SEGMENT ANALYSIS

The business segment for the Company year under review has been the offshore segment in domestic market.

The performance of the Company and details of segment reporting are presented in the financial statements and notes annexed thereto.

4. FINANCIAL PERFORMANCE

F or meaningful comparison, the pertinent financial parameters are provided below: ( In Lakhs)

Particulars	FY 2024-25	FY 2023-24
Total Income	65,956	70,673
Total Expenses	39,591	41,720
Operating Profit	26,365	28,952
Operating Profit	0.40	0.41
Margin
Interest Expenses	1,356	1,135
Depreciation	11,574	10,582
Profit / (Loss) before	13,435	17,235
Tax & exceptional
item
Exceptional item	0	1,301
(income)
Profit / (Loss) before	13,435	18,536
Tax
Tax Expenses	1,880	(123)
Profit / (Loss) after Tax	11,555	18,659
Net Profit Margin	0.18	0.26
Debtor/Sales	3.23	4.06
Creditor/Purchase	4.32	4.64

 

Particulars	FY 2024-25	FY 2023-24
Inventory / Turnover	7.13	8.45
Current Ratio	1.58	2.35
Debt Equity Ratio	0.18	0.26
Net worth	98,658	87,094
Interest Coverage	10.91	16.19
Ratio

Note: With respect to details of significant changes in key financial ratios with explanations, please refer to Note 43 of the Standalone Financial Statements forming part of this Annual Report.

Comments on Current Years Financial Performance:

Revenue :	Lesser deployment of Vessel Seamec Swordfish resulted into decrease in revenue by 7% as compared to previous year
O p e r a t i n g :	The Operating cost has reduced
theCost	by 41.82 crore in line with
	reduction in revenue
Depreciation :	Higher depreciation is due to
	acquisition of Vessel Seamec
	Diamond and Dry docking of
	Vessel Seamec Princess, Vessel
	Seamec Glorious and Vessel
	Seamec Swordfish
O p e r a t i n g :	Operating Profit has reduced by
Profit	25.88 crore In line with reduction
	in operating revenue and
	operating margin has reduced
	by 1%
Current Tax :	Current year tax expenses is
Expense	18.80 crore that is 14% of
	total profit as the Company is
	being assessed under Tonnage
	Tax Scheme hence lower tax
	expenses as compared to
	normal tax rates
Net Profit :	Decrease in PAT is due to tax
(Loss) after tax	expenses of 18.80 crore against
	previous year NIL and further
	profit decreased due to lesser
	deployment days of Seamec
	Swordfish and Seamec II
E x c e p t i o n :	No such Gain /loss in current year
Gain/Loss

5. HUMAN RESOURCES AND INTERNAL CONTROL ADEQUACY

Human Resources and Internal Control System and adequacy thereof have been stated in the Directors Report that forms part of this Report.

Ten Years at Glance

	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
SHARE CAPITAL	2,543	2,543	2,543	2,543	2,543	2,543	2,543	2,543	2,543	2,543
RESERVE & SURPLUS	39,455	24,497	24,530	32,195	45,199	54,475	62,050	66,153	84,552	96,115
NET WORTH	41,998	27,040	27,072	34,738	47,741	57,018	64,592	68,696	87,095	98,658
LOAN FUND
SOURCES OF FUNDS	41,998	27,040	27,072	34,738	47,741	57,018	64,592	68,696	87,095	98,658
GROSS BLOCK OF FIXED ASSET	22,039	29,966	29,857	33,495	35,797	36,277	56,186	84,938	87,453	92,945
RESERVE FOR DEPRECIATION	4,683	9,361	13,009	17,817	22,405	22,011	28,664	37,922	45,935	57,509
NET BLOCK OF FIXED ASSETS	17,356	20,605	16,848	15,678	13,392	14,265	27,522	47,016	41,518	35,436
INVESTMENTS	3,400	3,732	4,458	9,749	18,017	22,702	27,380	16,123	22,608	47,559
DEBTORS (NET)	18,655	10,878	11,736	16,354	15,351	7,675	3,757	10,500	22,258	15,920
TOTAL OTHER ASSETS	18,291	7,921	7,948	7,611	18,237	18,802	17,553	11,576	38,090	30,555
TOTAL LIABILITIES & PROVISION	15,704	16,096	13,918	14,654	17,257	6,426	11,620	16,519	37,380	30,812
NET ASSETS	2,587	-8,158	-5,970	-7,043	981	12,375	5,933	-4,943	710	-258
APPLICATION OF FUNDS	41,998	27,040	27,072	34,738	47,741	57,018	64,592	68,696	87,095	98,658
REVENUE FROM OPERATION	32,792	20,757	19,360	30,383	36,525	22,924	29,352	39,902	66,557	61,733
OTHER INCOME	2,297	1,760	1,877	2,661	3,038	3,404	4,423	1,547	4,116	4,223
EBITDA before extra ordinary	5,918	-9,632	5,196	12,935	18,247	8,668	14,647	13,116	28,953	26,364
items
EXTRA ORDINARY ITEMS	-	-	-	-	-	-6,188	-	-	1,301	-
INTEREST EXPENSES	27	115	78	62	103	64	336	329	1,135	1,356
DEPRECIATION	4,737	4,799	4,891	4,817	4,588	4,284	6,624	9,267	10,582	11,574
PROFIT BEFORE TAX	1,153	-14,546	227	8,056	13,556	10,508	7,687	3,520	18,537	13,435
TAX	577	413	197	385	544	746	112	-608	-123	1,880
PROFIT AFTER TAX	576	-14,959	29	7,671	13,012	9,763	7,575	4,128	18,660	11,555