PB Towage results have continued to strengthen due to improved market conditions and our increased market presence and penetration.

Increased offshore towage and support activity in Australasia

The offshore energy infrastructure sector has been the main growth driver for PB Towage over recent years, and our 2012 highlights include:

• increased involvement in the West Australian offshore gas sector principally through our OMSA joint venture, with one repositioned owned tug and two additional chartered-in tugs deployed in Western Australia;
• continued support to construction work on two projects in Gladstone, Queensland, where we deployed an average of two additional vessels; and
• formation of a marketing alliance with US-based Crowley Solutions allowing the two companies to combine their capabilities and jointly target marine logistics projects in South East Asia and Oceania.

Growth in harbour towage markets

Our harbour towage business showed improved results on an 11% increase in tug jobs reflecting market growth and our expanded market share.

We have entered a cooperation agreement with European-based Boluda Towage and Salvage to target LNG terminal towage opportunities combining Boluda’s LNG terminal experience and PB Towage’s local expertise.

We have recently finalised plans to open a harbour towage operation in the port of Newcastle in the middle of 2013.

Challenging towage environment in the Middle East

Despite some improvement in the general towage segment in the Middle East, this market remains challenging due to an oversupply. PB Towage has nevertheless maintained good utilisation of its Middle East assets.

Salvage support

Our tugs and barges have been called on to assist distressed vessels on the Australasian coast and were involved in supporting the salvors of the “Rena" in the initial phase of her salvage operation.

Organisation strengthening initiatives

We expanded our PB Towage team in 2012 to meet the operational needs of our customers and the growth in our business volume.

PB Towage Harbour Job Numbers

 

OPPORTUNITIES

• Growing project activity in Australasia and related demand for transportation of project cargoes and construction support both domestically in Australia and internationally
• Increased exploration and production leading to demand for platform support services
• Continued growth in Australian bulk export volumes offering scope for increased harbour towage jobs in bulk ports
• International transportation into Australia driving increased harbour towage jobs in container ports

THREATS

• Hesitation in global economic recovery – and especially a Chinese slowdown – impacting Australian port activity
• Labour market shortages and cost pressures
• Exchange rate movements affecting Australia’s global competitiveness

 

PB Towage has established itself as a safe and quality-conscious operator with a strong customer base in both harbour and offshore project towage sectors. We consider PB Towage to be well positioned competitively to participate in the opportunities in these sectors as the market develops further in Australia and internationally.

PB Towage has delivered increasingly profitable results since we diversified into this business and is expected to continue to be an important contributor to the Group’s results in 2013.

Strategy

We believe PB Towage has the capacity to expand. Offshore development activity and increasing bulk port volumes are expected to provide opportunities for growth, and they therefore represent the main focus of our towage operations in 2013.