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Vallianz bidding for $1.8bn charter contracts in Middle East

Vallianz bidding for $1.8bn charter contracts in Middle East
Singapore’s Vallianz Holdings has revealed that it is bidding for charter contracts worth a combined $1.8bn mainly for projects in the Middle East, leveraging on its track record in the region.

Vallianz is also continuing to prepare itself for opportunities in other target markets such as Latin America when demand for OSVs start to recover.

“Despite the current volatile and depressed market climate, Vallianz continued to secure long term charter contracts and grow our business,” said Ling Yong Wah, ceo of Vallianz.

Last year, the group secured new charter contracts worth a total of $856m comprising of 19 AHTS vessels, four PSVs and two self-elevating platform vessels, awarded by a national oil company in the Middle East.

“We also maintained a healthy fleet utilisation rate in FY2015. This resilient performance can be attributed to our entrenched reputation in the Middle East where offshore oil production remains active,” Ling said.

As at 31 December 2015, the group owned and operated 44 OSVs compared to 37 at the end of 2014. Its fleet had an average utilisation rate of around 81% in 2015.

The work for Vallianz in the Middle East led to the company seeing incremental contributions from new charter contracts, expansion of fleet size and healthy fleet utilisation, despite depressed industry conditions.

Ling noted: “Business conditions in the offshore marine industry are expected to remain challenging in the foreseeable future. The OSV industry is facing downward pressure on charter rates and declining vessel utilisation.”

For its financial results, the Singapore-listed company registered a dip in profit for 2015 compared to the previous year amid the prevailing headwinds in the offshore marine industry.

Net profit attributable to owners of the company for last year was reported at $17.45m, down 6.1% from the gain of $18.58m.

Revenue, on the other hand, jumped 51.3% year-on-year to $232.55m on the back of higher contributions from Vallianz’s OSV chartering and brokerage business, as well as new revenue streams from subsidiaries acquired in the last quarter of 2014.

Meanwhile, Vallianz completed in mid-February a refinancing exercise for its operations in the Middle East, issuing a Saudi Riyal denominated sukuk of SAR1bn ($266.7m) primarily to refinance the loans secured on 16 vessels operating in the Middle East.