SINGAPORE (May 22): Vallianz Holdings, the provider of offshore support vessels (OSVs) and integrated offshore marine solutions to the oil and gas (O&G) industry, announced losses of US$159.4 million for the 15 months ended March 31, compared to FY15 ended Dec earnings of US$17.5 million a year ago.
The group is changing its financial year end to March from Dec previously.
In a Monday press release, the group says this was due to exceptional expenses – in the form of non-cash net impairment expenses – totalling US$214.6 million for certain of its assets, including impairment expenses of US$22.3 million attributable to non-controlling interests.
This was as a result of the business slowdown in the offshore oil and gas industry, it adds, on top of lower operational profitability that the group is experiencing in the current challenging market conditions.
Excluding the exceptional expenses, the group recorded operating profit before tax of US$20.26 million.
Revenue for the 15 months ended March was US$247.8 million, out of which 84% was generated by Vallianz’s vessel chartering and brokerage business which is buoyed primarily by long-term charter contracts in the Middle East.
This was higher compared to 64% for the FY15 ended Dec, which the group says is in line with its strategy to focus on its core vessel chartering and brokerage business.
Correspondingly, vessel management services accounted for a lower 15% of Group revenue in FY2017.
Gross profit margin for the year was slightly softer at 25.2% compared to 27.9% in FY15, due mainly to the renewal of certain existing contracts at a lower average charter rate.
Trade and other receivables decreased to US$216.81 million as at March 31, from US$306.16 million as at 31 Dec, 2015, on improvement in collection of receivables in the current financial period.
“Although sluggish demand has placed significant pressure on vessel utilisation and charter rates in most markets, Vallianz’s vessel chartering business remains operationally profitable. This is because most of our vessel charters are long term in nature and based primarily in the Middle East region where there are sustained oil production activities,” comments Ling Yong Wah, CEO of Vallianz.
“Together with our strategic shareholder and partner Rawabi Holding, we have been focusing our efforts on strengthening customer relationships to sustain our leading market position in Middle East. Since the beginning of 2017, the group has commenced charters for 5 new vessels which are expected to contribute to our revenue in the new financial year ending 31 March 2018,” he adds.
Shares of Vallianz closed flat at 2 cents on Friday.
