Vallianz posts 12.5% rise in 1Q earnings to US$4.3 mil

Group revenue for 1Q decreased 35.2% year-on-year to US$41.2 million due mainly to the completion of various one-time vessel management projects in the second half of 2016.

However, its revenue in 1Q was an improvement from US$38.7 million in the preceding 4Q ended March, thanks to contributions from new long term charters contracts with its key National Oil Company (NOC) customer in the Middle East.

The group’s core vessel chartering & brokerage services accounted for 94% of group revenue in 1Q, an increase from 68% in the year-ago period.

While the group experienced lower utilisation for certain vessels outside of the Middle East region, this was mitigated by revenue contributions from ongoing long-term charters in the Middle East as well as the start of new long charter contracts during 1Q.

Gross profit margin for 1Q edged higher to 25.9% compared with 25.0% in the year-ago period despite lower revenue. This was attributed to a shift in revenue mix away from the vessel management services which command lower margins, as well as a reduction in depreciation expenses following asset write-downs the group made at the end of FY2017.

As at end June, the group has an order book of US$990 million with charter contracts stretching up to year 2025.

In its outlook, Ling Yong Wah, CEO of Vallianz, says, “We have grown our Middle East business to transform the Group into one of the largest OSV players in that region... Following the series of cost rationalisation, operations streamlining and restructuring initiatives, as well as an asset write-down exercise undertaken in the last financial year, we believe the Group is better positioned to overcome current market challenges and focus on building our future.”