Vallianz’s Q1 earnings four times higher
- Business & Finance
Vallianz Holdings Limited, an integrated offshore marine solutions provider in the offshore oil and gas industry, has reported that it has achieved stronger earnings for the first quarter ended March 31, 2014.
Profit for the period surged over four times, or 310% to $5.5 million in 1Q 2014 from $1.3 million for the first quarter ended March 31, 2013. Over the same period, revenue soared over ten times or 916% to $27.7 million from $2.7 million, with charter revenue contributing 89% of the Group’s revenue in 1Q 2014.
Darren Yeo, Executive Director and Chief Executive Officer of Vallianz said: “Vallianz has set in-place key strategies to deliver growth, widening our geographical presence through strategic partnerships. Our subsidiary Rawabi Swiber Offshore Service Co Ltd (“RSOS”), in particular, started to contribute considerably to the Group’s financial performance this quarter. This stronger set of results in 1Q2014 is a fruition of the strategic steps taken in previous quarters, and we shall continue to stay focused and on-course in our growth trajectory.”
Other Performance Review
With the increase in sales driven mainly by vessel chartering, the Group’s cost of sales correspondingly increased from US$370,000 to US$17.4 million over the same period. Consequently, gross profit grew 338% from US$2.4 million in 1Q2013 to US$10.3 million in 1Q2014.
Due to the expansion of the Group’s business operations to the Middle East, administrative expenses increased year-on-year by US$2.5 million to US$2.7 million in 1Q2014. Finance costs grew from US$818,000 in 1Q2013 to US$2.2 million in 1Q2014, in line with the consolidation of RSOS fleet into the Group’s balance sheet.
Overall, net profit surged over four times from US$1.3 million in 1Q2014 to US$5.5 million in 1Q2014, and the Group achieved a net profit margin of 19.7% in 1Q2014.
The Group has cash and cash equivalents of US$17.4 million as at March 31, 2014.
Growth Strategies & Outlook
The outlook for regions in which Vallianz operates in and intends to grow its presence in, remains bright. This is due to the structural demand for oil, ongoing development of oil fields and the potential for new oil discovery at these regions. These growth drivers, along with the industry’s expectation that oil prices will oscillate favourably, support Exploration & Production spending by offshore and international operators as well as national oil and gas companies. In addition, the increase in delivery of offshore oil rigs will also support vessel utilisation rates of offshore support vessels.
Yeo concluded, “We believe that there are numerous opportunities in the future for the Group to capitalise on and are optimistic of the outlook on the oil and gas industry. Hence, we are confidently bidding for projects amounting to approximately US$1.2 billion in Asia, Middle East, and Latin America. Furthermore, Vallianz has entered into a strategic collaborative agreement with one of China’s first class shipyard to secure our long term vessel requirements for up to 200 vessels. This will enhance our capability to plan ahead and the nimbleness to provide marine vessels in a timely manner so as to swiftly capitalise on the industry’s burgeoning growth opportunities.”
As at March 31, 2014, Vallianz has an order book of approximately US$442.0 million. Vallianz has a young and best-in-class fleet of 28 offshore support vessels and intends to boost its vessel fleet to at least 50 vessels by 2016.