Velesto Energy posts RM22.21m net loss in Q1

21 May 2019 / 19:29 H.

PETALING JAYA: Velesto Energy Bhd posted a net loss of RM22.21 million for the first quarter ended March 31, 2019 from RM5.02 million registered in corresponding quarter of 2018 attributed to net foreign exchange gain of RM18.2 million recorded in the prior year corresponding period which resulted from early settlement of revolving credit.

The group recorded a revenue of RM127.03 million for the first quarter of this year, an increase of 4.31% from RM121.76 milllion recorded in 1Q18 thanks to a higher revenue reported by its drilling services segment as a result of higher utilisation of rigs and average charter rate.

On its drilling services segment, the group said at present, four out of the seven jack-up drilling rigs owned by the group are working while the rest are being prepared to be mobilised for the recently awarded long term contracts, expected to commence within the month of May 2019. With the commencement of the new contracts, utilisation of the rigs are expected to increase significantly in the second half of the year, with a number of them expected to continue working into 2020 and beyond.

The demand for hydraulic workover units is also improving with one of the group’s unit already working and a number of tenders presently being issued out. The increased demand in both jack-up drilling rigs and hydraulic workover units is expected to benefit the group, being the main player with strong domestic and regional track records. Gradual improvement in time charter rate is also seen based on recently awarded contracts.

“At present, the group is aggressively bidding for additional new contracts to replace the three contracts expected to expire late this year and next year.”

On the oilfield services segment, the group said while the business outlook has shown some improvement, it will continuously evaluate the viability of the only remaining minor subsidiary operating under this segment.

“Based on the present outlook of higher utilisation and time charter rates for the group’s assets in the second half of the year, the board expects an improved financial performance of the group in 2019,” Velesto said.

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