PT Trans Power Marine Tbk (TPMA) has allocated a capital expenditure or capital expenditure (Capex) of Rp120 to Rp150 billion this year. The company will use the funds to purchase 5-6 sets of tugboats and barges.

"The company will use the purchased fleet to increase its transportation capacity and replace the old fleet. We hope that the addition of these vessels will increase the company's performance," said the company's management in an information disclosure submitted to the Indonesia Stock Exchange on Thursday (25/2).

The company has also obtained a bank loan facility to launch the action.

The company's management said that the company was always committed to fulfilling its responsibilities to banks and suppliers during the pandemic, with strict and well-managed cash flow arrangements.

"The company can still make installment payments during 2020, so that bank debt will decrease to US$21 million as of September 30, 2020, compared to a balance of US$26.7 million as of September 30, 2019. With this decrease, we hope that the interest expense will be smaller and alleviate. Companies, "the company management said.

In early 2020 the utilization of Trans Power Marine ships was high. The company has even rented more than ten sets of tugboats and barges to serve customer requests.

However, entering the second quarter of 2020, after the COVID-19 pandemic, demand for cargo transportation began to decline, so the company had to stop chartering third-party vessels.

"The main reason is that PLN has overcapacity due to the closing of office buildings, malls, schools and shopping centers, and so on. The utilization of vessels reached 60 percent in mid-2020, "said the company management.

In the fourth quarter of 2020, utilization began to recover with an increase to around 90-95 percent, one of the impacts of increasing coal exports to China due to the halt to coal shipments from Australia by China.

Previously in 2020, the company had budgeted a capital expenditure of Rp45 billion. The company used this Capex for the repair and maintenance of the vessels.

According to Rudy Sutiono, the Director of Trans Power Marine, the Rp45 billion Capex was aimed to use for 30 ships. Of which capex amounting to Rp25 billion has been absorbed until mid-2020 to repair and maintain around 17-18 ships.