Offshore support vessel owner Vallianz Holdings hit by impairment charges

SINGAPORE - Offshore support vessel owner and operator Vallianz Holdings fell into the red, as it had to recognise further write-downs to the tune of more than US$200 million (S$276.97 million).

The firm 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.

The losses came off the back of decreased revenues, which fell 21.5 per cent for the quarter to US$38.7 million.

The company changed its financial year to end on March 31, instead of Dec 31. It therefore reported its financial full-year results for a period of 15 months, from Jan 1, 2016 to March 31, 2017.

While it made an operating profit of US$23.1 million for the five quarters, it was substantially bogged down by exceptional expenses and losses from associates and joint ventures.

The exceptional expenses came from recognising further write-downs, after the group carried out an evaluation of the carrying value of some of its assets. It recognised additional write-downs of US$212.9 million, bringing the total exceptional expenses to US$214.6 million.

The company's associate, PT Vallianz Offshore Marine in Indonesia, also contributed a loss of US$3.4 million for the five quarters to March 31.

Overall,Vallianz had a net loss of US$159.4 million for the 15 months against a net profit of US$17.5 million for Jan 1 to Dec 31, 2015. Revenue rose 6.6 per cent to $247.8 million.

Mr Ling Yong Wah, chief executive of Vallianz, said the industry conditions continue to be extremely challenging.

"Although sluggish demand has placed significant pressure on vessel utilisation and charter rates in most markets, Vallianz's vessel chartering business remains operationally profitable," he said, adding that this is because most of its vessel charters are based primarily in the Middle East, where there are sustained oil production activities.

It noted that it was mainly exceptional expenses, such as the impairment expenses for some of its assets, which caused the Group to slip into the red.

Looking ahead, It said that it had an outstanding chartering services order book of about US$1.03 billion, mainly comprising long-term charters with a national oil company in the Middle East.

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

Catalist-listed Vallianz has been affected by the woes of its major shareholder Swiber Holdings, which is under judicial management.

Vallianz said that the company has been in discussions with Swiber and are working towards the finalisation of the final set-off and settlement agreement.

The company requested for a trading halt on Monday morning, shortly after it released its results.