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VALLIANZ Holdings reported on Monday that its net profit for the fourth quarter of 2016 fell 35.4 per cent to US$3.1 million, compared to US$4.7 million a year ago.
Revenue from troubled Swiber entities has declined substantially to US$43.4 million, and accounted for 20.8 per cent of Vallianz's total revenue in 2016, as compared to 34.6 per cent in 2015.
For Q4, Vallianz revenue was down 11.9 per cent at US$41.4 million. For the full year 2016, the offshore marine-related company's net profit fell 22.7 per cent to US$15.6 million, while revenue slipped 10.1 per cent to US$209.1 million.
The lower profits are attributable mainly to pressure on gross profit margin as a result of the challenging business conditions in the offshore marine industry. Gross profit margin fell to 25.5 per cent in 2016, compared to 28.4 per cent in 2015.
It recorded a loss of US$1.2 million from its share of results from associate and joint ventures in 2016. This was mainly due to a loss reported by PT Vallianz Offshore Maritim, the group's 49 per cent-owned associate in Indonesia.
On Dec 31, 2016, Vallianz has a negative working capital of US$38.3 million, compared to US$22.7 million (excluding impact of assets held for sale) on Dec 31, 2015.
Cash and cash equivalents fell by US$27.0 million to US$14.9 million on Dec 31, 2016, from US$41.9 million a year ago.
As at Dec 31, 2016, Vallianz had trade and other receivables owing from Swiber entities amounting to US$97.2 million. It also had trade payables and other payables owing to Swiber entities of about US$87.3 million, of which US$29.4 million is owed by the company.
Vallianz said it has not been served with any notices of any event of default for any of its loans which have corporate guarantees from Swiber, and it has successfully obtained waivers for event of default from 2 of the 3 bank loans. It remains in active discussion with the third bank.
Vallianz has an outstanding chartering services order book worth US$950.1 million in total, comprising long term charters which include 2-year extension options stretching up to 2025.
The company has been restructuring its business operations which included the closure of certain non-core business units at the end of 2016. It is also reviewing rightsizing initiatives and assessing the value of its assets given the current market conditions.
Vallianz said the outcome of these evaluations may have an impact on its financial performance for the 15 months ending March 31, 2017, which is the new financial year end.
It added that it would, in consultation with its legal advisors, continue to closely monitor and evaluate the impact of Swiber's developments.