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KUALA LUMPUR (March 24): Oil platform operator Velesto Energy Bhd sank in the red in the fourth quarter ended December 31, 2020 (4QFY20), reporting a net loss of RM493.29 million from a net profit of RM10.2 million per year. earlier.
This was largely affected by an impairment loss of RM460.6 million for the platform’s assets, which were affected by volatility in oil prices and the global economy exacerbated by the Covid-19 pandemic, Velesto said. in a presentation to Bursa Malaysia today.
Earnings per share were six sen versus 0.12 sen earnings per share a year ago.
Velesto’s revenues contracted 44.38% to RM99.06 million from RM178.1 million in 4QFY19 mainly due to lower activities in the drilling and oilfield services segments.
On a quarterly basis, the group plunged into the red from a net profit of RM479,000 in the immediately prior quarter, while revenue fell 24.2% from RM130.66 million in 3TFY20.
For the full financial year ended December 31, 2020 (FY20), Velesto reported a net loss of RM 491.73 million out of a net profit of RM 33.22 million. Its annual revenue fell 18.5% to RM 546.94 million from RM 670.76 million a year ago.
The group said there has been an increase in global oil and gas activities, including the drilling sector, where several contracts have been awarded in the last three months.
“In Malaysia, a number of new drilling contracts have been awarded and more tenders are currently being evaluated. The group participates in most of these tenders, in addition to several tenders in ASEAN countries.
“Currently, two of the group’s seven jack-up drilling rigs are operational. Another rig is scheduled to start a three-year contract in the Malaysia-Thailand Joint Development Area in early April 2021. Two more rigs are being mobilized for initiate contracts offshore Malaysia in April and May respectively.
“Today, the group continues to bid and negotiate new contracts for 2021 and beyond,” the group commented on the prospects for its drilling services segment.
Regarding the oilfield services segment, he said that the demand for workover and closure and abandonment activities is improving in line with PETRONAS Activity Outlook 2021-2023.
“The group is currently bidding for a series of available contracts that are being launched. There is also a gradual recovery in demand for the group’s oil services operation in China.
“Due to the slow recovery in [the] global economy and the oil and gas industry, the board believes that financial performance for 2021 will continue to be a challenge, “he added.
At the closing bell, Velesto was unchanged at 17.5 sen, giving it a market capitalization of RM1.44 billion. He saw some 71.8 million shares traded.
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