Vallianz hit by impairment charges of over $277m

Substantial writedowns a drag on firm's latest quarterly results

Offshore support vessel provider Vallianz Holdings bled red ink during the latest quarter as it took hefty writedowns of more than US$200 million (S$277 million).

The firm yesterday reported a net loss of US$173.2 million for the three months ended March 31, a reversal from the net profit of US$4.9 million in the same period a year earlier.

Revenue slumped 21.5 per cent to US$38.7 million, mainly due to the completion of various one-time vessel management projects in the second half of last year, Vallianz said.

The group also saw lower utilisation from some of its existing fleet of vessels in the current challenging market conditions, despite the commencement of new contracts.

Vallianz has changed its financial year to end on March 31 instead of Dec 31, and so reported its full-year results for a period of 15 months.

While the group made an operating profit of US$23.1 million for the five quarters to March 31, it was substantially bogged down by exceptional expenses in addition to lower operational profitability.

The exceptional expenses came from recognising additional writedowns of US$212.9 million in the latest quarter, after evaluating the carrying value of some assets. This brought total exceptional expenses for the year to US$214.6 million.

  • AT A GLANCE
     

    NET LOSS: US$173.2 million

    REVENUE: US$38.7 million (-21.5%)

    DIVIDEND PER SHARE: None

Vallianz had a net loss of US$159.4 million for the 15 months after a net profit of US$17.5 million for the full year of 2015. Revenue rose 6.6 per cent to US$247.8 million.

It posted a loss per share of 4.38 US cents for financial year 2017, after earnings a share of 0.56 US cent for 2015. Net asset value a share was 4.12 US cents as at March 31, from 7.13 US cents at Dec 31, 2015.

Chief executive Ling Yong Wah said that industry conditions continue to be "extremely challenging" amid intense competition in the offshore support vessel market.

The group's chartering services order book stood at US$1.03 billion as at March 31, comprising mainly long-term charters with a national oil company in the Middle East.

Catalist-listed Vallianz has been affected by the woes of major shareholder Swiber Holdings, which is under judicial management. It said the firm and Swiber are working on a final settlement agreement.

Vallianz sought a trading halt soon after releasing its results yesterday pending an announcement. Its shares closed last Friday at 17 cents.

A version of this article appeared in the print edition of The Straits Times on May 23, 2017, with the headline 'Vallianz hit by impairment charges of over $277m'. Print Edition | Subscribe