Vallianz posts small increase in profitCompany News // August 21, 2017
Singapore-based Vallianz Holdings Limited has posted a 12.5 per cent increase in net profit attributable to owners of the company of US$4.3 million for the first quarter ended 30 June 2017.
Group revenue for 1Q2017/18 fell 35.2 per cent 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 1Q2017/18 was an improvement from US$38.7 million in the preceding quarter ended 31 March 2017, thanks to contributions from new long term charters contracts with a national oil company customer in the Middle East.
The group’s core vessel chartering and brokerage services accounted for 94 per cent of revenue in 1Q2017/18, an increase from 68 per cent in the year-ago period. Although 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 1Q2017/18.
Gross profit margin for 1Q2017/18 edged higher to 25.9 per cent compared with 25.0 per cent 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.
The group had an operating profit of US$4.9 million in 1Q2017/18. As at 30 June 2017, the group’s shareholder equity was US$187.0 million which represents net asset value per share of 4.17 US cents.
Ling Yong Wah, CEO of Vallianz, said “The group continued to chalk up a profitable performance in spite of the extremely challenging business climate. The offshore support vessel sector continues to be weighed down by weak vessel utilisation and depressed charter rates in most markets.
"The group’s vessel chartering business is primarily anchored on our operations in the Middle East which have remained stable and profitable due to the long term nature of our charter contracts there. The group has therefore been able to endure the sluggish market conditions affecting other regions.
"We have grown our Middle East business to transform into one of the largest OSV players in that region. We continue to commence new long term charter contracts with the NOC and have deployed a total of six vessels during the first half of 2017. We expect to deploy more vessels for the remainder of this year. These contracts are expected to provide incremental revenue on top of the ongoing long term charters with the NOC.”