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Vallianz back in black with US$16.7M profits

Mon 14 May 2018 by Ed Martin

Vallianz back in black with US$16.7M profits
Ling Yong Wah sees turnaround as due to long-term NOC charters, streamlined operations and optimised costs

Middle East-focused OSV charter firm Vallianz has announced a “sharp turnaround” for the 12 months ended 31 March 2018 (FY2017), with profits of US$16.7M.

This contrasts with a net loss of US$158.2M for the 15-month period ended 31 March 2017 (FY2016), according to a press release from the Singapore-headquartered company.

Chartering and brokerage accounted for 83% of revenue this year, the release noted, with the remainder derived from vessel management and services.

While revenue for FY2017 was lower than for FY2016 – US$184.3M and US$248.4M, respectively – a company press release said “this was due mainly to the regular financial year” in FY2017 as opposed to the 15-month financial year that ended in March 2017.

Chief executive Ling Yong Wah attributed the turnaround to securing long-term charters with national oil companies (NOCs) and efforts to streamline operations and optimise cost structures.

Discussing the impact of the recovering oil price, he said “The operating environment for the OSV sector is expected to remain challenging due to an oversupply situation, intense competition and soft demand conditions.

“However, there are early signs that vessel owners are beginning to scrap older OSVs which is expected to gradually bring the OSV market into better balance and relieve downward pressure on vessel utilisation rates and charter rates.”

Vallianz has a fleet of 58 OSVs, active in the Middle East, Asia Pacific and Latin American markets. Its Middle East operating fleet expanded in FY2017 with charter contracts for eight vessels for an NOC customer, for whom the company expects to deploy further vessels in the coming six months.

“While the present operating environment is still challenging, particularly in the Asia region, we believe the Middle East will continue to present exciting opportunities,” said Mr Ling.

The company has an orderbook worth approximately US$80M, mainly comprising long-term charter contracts with two-year extension options stretching to 2025. According to Bloomberg, its market cap is S$215M (US$161M).

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