SINGAPORE (Feb 12): Vallianz Holdings, the provider of offshore support vessels (OSV) in the Middle East, reported 3Q17 earnings increased 26.1% to US$5.9 million ($7.8 million) from US$4.7 million.
Group revenue in 3Q17 grew 29.6% year-on-year to US$53.64 million due mainly to the commencement of new charter contracts with a key National Oil Company (NOC) customer in the Middle East and revenue contributions from provision of vessel management services.
A reduction in depreciation expenses and the group’s strategic focus on its core chartering and brokerage services business drove an expansion in its gross profit margin to 33.4% in 3Q17 compared to 26.7% in 3Q16.
As a result, the group registered a 71.1% rise in operating profit to US$7.7 million in 3Q17 from US$4.5 million previously.
For the nine months ended Dec 31 (9M17), group revenue declined 14.9% to US$136.1 million from US$159.8 million previously due mainly to lower utilisation of certain vessels and the absence of various one-time vessel management projects which were completed during the second half of 2016.
Nevertheless, the group’s PATMI for 9M17 jumped 64.3% to US$15.4 million from US$9.4 million in 9M16, thanks to lower operating and finance expenses.
As at Dec 31 2017, the group maintained a robust chartering services order book with total value of approximately US$900 million, comprising mainly long term charter contracts that stretch up to 2025 inclusive of two-year extension options.
Following the completion of a rights cum warrants issue in Dec 2017, the group’s strategic partner Rawabi Holding has emerged as its largest shareholder with a stake of 57.67%.
Ling Yong Wah, CEO of Vallianz, says the group expects to continue deploying additional vessels over the course of the next two quarters as there are tentative signs of a recovery in crude oil prices as the strategies by OPEC and Russia to curb crude oil production have led to a tighter demand-supply situation.
"Notwithstanding the improved conditions in the global oil and gas industry, the OSV segment continues to face a challenging operating environment. Due to an overhang in vessel capacity amid slow demand, intense competition among OSV operators continues to depress vessel utilisation rates and exert pressure on charter rates," he adds.
Shares in Vallianz closed 0.1 cent lower at 1.3 cents.
