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Vallianz posts stellar rise in Q2 earnings

Vallianz posts stellar rise in Q2 earnings
Singapore’s Vallianz Holdings saw a substantial increase in second quarter net profit as revenue soared on strong contributions from vessel charter.

Net profit in the second quarter was recorded at $5.32m, a surge of 181% from $1.89m in the same period of last year.

Revenue during the quarter saw an astronomical climb to $38.56m compared to $7.74m a year earlier, due largely to contributions from the group’s operations in Saudi Arabia.

Charter revenue for Vallianz’s young and modern OSVs, which have contracts of up to five years, accounted for approximately 90% of the group revenue in the first half of 2014.

“The group witnessed a major upswing in our financial performance in 1H2014, thanks to the positive contribution from our operations in the Middle East. As a result, our net profit for 1H2014 has exceeded the full year profit of $10.3m in FY2013,” said Darren Yeo, ceo of Vallianz.

Yeo added that the company is expecting to take delivery of around nine new vessels by this year end as part of its plan to expand its current fleet of 29 vessels to 50 by 2016.

Looking ahead, Vallianz believes the industry backdrop remains favourable for its OSV chartering business.

Based on current expectations of oil prices, offshore E&P activities are anticipated to remain healthy and contribute to a growing proportion of global oil production. Vallianz envisaged that the increasing number of working oil rigs would continue to drive demand for OSVs.

“Our operating strategy is to focus on securing medium to long term chartering contracts which provide higher predictability of revenue streams and cash flow,” Yeo said.

At the end of June 2014, Vallianz had an orderbook of $494m that stretches up to 2018. Approximately 50% of its orderbook is expected to be recognised as revenue during the second half of 2014 and full year 2015.