Velesto registers lower net loss of RM46.2m in 1QFY22 on higher revenue

KUALA LUMPUR (May 25): Velesto Energy Bhd posted a lower net loss of RM46.2 million in the first quarter ended March 31, 2022 (1QFY22), compared with a net loss of RM60.47 million a year earlier, on the back of higher revenue.

Quarterly revenue climbed 76.22% to RM77.41 million from RM43.93 million, mainly due to higher activities in the drilling segment, where the segment’s revenue jumped 82% year-on-year to RM74.19 million on higher average jack-up rig utilisations during the quarter.

“As a result of the above, the drilling services segment registered a lower loss before tax of RM36 million as compared to RM48.9 million loss before tax reported in the corresponding quarter,” the group explained in its filing with Bursa Malaysia.

On prospects, Velesto said recovery in the global oil and gas industry outlook augurs well for the company. It said although the outlook is expected to improve, nevertheless, it may take time to be reflected in the group’s financial performance.

“Currently, three of the group’s six available jack-up drilling rigs are working, while another three are undergoing upgrading works and being prepared to meet the requirement of our potential clients for contracts that we are tendering for.

“The group is actively bidding for new tenders for local and international contracts scheduled to be performed this year and next year,” the group said in a statement accompanying the financial results announcement.

Meanwhile, the prospect for the workover services segment is improving with a number of jobs secured. Velesto said it has received work orders for three of its four Hydraulic Workover Units for the scope of Workover and Plug and Abandonment activities, through provision of integrated well services.

“The positive threading industry outlook is also expected to benefit the oilfield services operation in China.

“[Overall,] the board remains cautiously optimistic on the financial performance of the group in 2022, barring any unforeseen circumstances,” it added.

Velesto shares were unchanged at 12 sen on Wednesday (May 25), giving the group a market capitalisation of RM985.87 million.