Latest news with #VelestoEnergyBhd
New Straits Times
5 days ago
- Business
- New Straits Times
Velesto set for stronger 2H25 as rig utilisation rises
KUALA LUMPUR: Velesto Energy Bhd is poised for stronger earnings visibility for the remainder of the year as five out of its six jack-up drilling rigs have secured contracts, according to Maybank Investment Bank (Maybank IB). The firm raised its financial year 2025 (FY25) earnings forecast by three per cent to account for a higher blended utilisation rate assumption of 72 per cent since the Naga 5 rig started work one month earlier than scheduled. While second quarter (2Q25) results may be weaker on a quarterly basis due to scheduled maintenance for two rigs and slightly lower average daily charter rates (DCRs), Maybank IB expects earnings to be backloaded in the second half. The firm projects a strong recovery with utilisation rates at 83 per cent for both the third and fourth quarters. Maybank IB said Velesto's earnings peaked in FY24 in line with the local oil and gas services and equipment sector cycle. "Earnings will likely decline annually, but the company should remain comfortably profitable. Despite lower DCRs from the peak, its rigs are well-utilised, providing Velesto with cash flow comfort," it said. As at end-March 2025, due to strong operating cash flows from its drilling operations, Velesto's net cash position grew by 60 per cent on a quarterly basis to RM104.7 million. This represents about seven per cent of Velesto's current market capitalisation. "With a healthier balance sheet ahead, we raise our dividend payout ratio assumption to 100 per cent from 70 per cent previously, translating into a dividend per share of 2.1 sen and an attractive yield of over 11 per cent," Maybank IB added. The firm said Velesto's drilling operations also benefit from a natural hedge against foreign exchange fluctuations as about 70 per cent of its operating and capital expenditures are denominated in US dollars. Maybank IB kept its "Buy" call on Velesto with a target price of 18 sen.
New Straits Times
01-07-2025
- Business
- New Straits Times
Velesto to deploy Naga 5 for new drilling job from PTTEP
KUALA LUMPUR: Velesto Energy Bhd, via wholly owned Velesto Drilling Sdn Bhd, has been awarded a drilling contract by PTTEP HK Offshore Ltd and PTTEP Sarawak Oil Ltd for PTTEP's 2025-2026 drilling campaign in Malaysia. Under the contract, Velesto will assign Naga 5, one of its premium jack-up rigs, to drill a firm 15 wells with operations scheduled to commence in June 2025. Naga 5 is a premium independent-leg cantilever jack-up drilling rig with a rated operating water depth of 400 feet and drilling depth capability of 30,000 feet. Velesto president Megat Zariman Abdul said its focus remains on safe and reliable execution, driven by consistent delivery across campaigns. "With several rigs under long-term contracts, we remain committed to operational discipline and value-driven execution that creates sustainable returns for our shareholders." The latest award follows Velesto's recent announcements for Naga 4 and Naga 8 in May this year, further strengthening the group's fleet utilisation outlook. Velesto said it continues to benefit from rising regional demand for jack-up rigs and anticipates a more active second half of 2025, supported by a robust tender pipeline and stable client activity.
New Straits Times
15-06-2025
- Business
- New Straits Times
Global oil price surge to have dual impact on Malaysia
KUALA LUMPUR: The surge in global oil prices poses a mixed effect on Malaysia's economy, with the local energy-related stocks seeing immediate gains. The likes of Velesto Energy Bhd, Bumi Armada Bhd, Hibiscus Petroleum Bhd and Dialog Group Bhd saw their shares rising on Friday as oil prices jumped following rising geopolitical tensions in the Middle East. Industry observers, however, said stronger oil prices may drive up fuel and transportation costs, leading to broader inflationary pressures. Oil prices surged more than nine per cent on Friday to around US$75, their highest in almost five months, after Israel struck Iran. Brent crude futures jumped US$6.29, or 9.07 per cent, to US$75.65 a barrel by 0315 GMT after hitting an intraday high of US$78.50, the highest since Jan 27. US West Texas Intermediate crude was up US$6.43, or 9.45 per cent, at US$74.47 a barrel after hitting a high of US$77.62, the loftiest since Jan 21. Reuters reported that Friday's gains were the largest intraday moves for both contracts since 2022 after Russia invaded Ukraine, causing energy prices to spike. Pressure on inflation Economist Samirul Ariff Othman told Business Times that rising oil prices may drive up fuel and transportation costs. This will lead to broader inflationary pressures across consumer goods and business operations, particularly in sectors such as manufacturing and palm oil. At the same time, he said trade and logistics may come under strain due to potential shipping reroutes and rising freight charges. "Regional equities and currencies often react negatively to spikes. Asia saw stock drops immediately after today's strike. "However, Malaysia is also an oil and gas (O&G) exporter, so government revenue and energy sector profits will benefit, partially offsetting broader inflation pressures," he said. Samirul said if the conflict remains contained and no critical energy facilities are targeted, prices may retreat to US$70-US$75 per barrel, maintaining elevated risk premiums but not exceeding historical averages. However, if tensions escalate or the conflict persists, the situation could trigger a more sustained increase in prices. "Supply-chain barriers, through both oil and shipping lane disruptions, could keep prices elevated for months, potentially into the US$90 to US$120 range," he added. Samirul said the intraday surge in oil prices is deeply significant, as it constitutes one of the largest one-day moves in recent years. "Historically, such spikes have occurred only during major shocks, like the 2022 Ukraine war or 1970s oil-crisis era," he said. Worst case scenario Samirul also noted that global analysts at JP Morgan have warned that current oil prices already factor in a seven per cent probability of a worst-case supply disruption scenario, where prices could hit US$120 per barrel. "Yet if Iran retaliates, striking energy infrastructure or disrupting the Strait of Hormuz, the spike could accelerate and deepen. "If they don't, prices may ease back toward the low-US$70s, although elevated risk premiums could maintain somewhat higher levels than pre‑shock," he added. The economist explained that an escalation would likely affect global supply through two primary channels. The first is actual disruption, where Iran might launch direct attacks on oil tankers or production facilities in the region, with worst-case scenarios putting up to 20 million barrels per day (bpd) at risk. The second is a precautionary risk premium, where even in the absence of physical damage, heightened fears could lead to the closure of key shipping routes such as the Strait of Hormuz. "The World Bank models a 500,000 to two million bpd loss as 'small disruption' and six-eight million bpd in 'large disruption' scenarios. "That could drive prices sharply higher up by 20 to 75 per cent and force global supply chains to reroute, adding cost and time," he explained. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the sharp increase in Brent crude prices was mainly driven by Israel's strike on Iran, noting that geopolitical factors typically cause short-term shocks to oil prices. "After a while it would fade and it will go back to the fundamental aspect of the industries where the demand for oil is expected to trend lower as global growth momentum is expected to moderate based on the recent downward revision by the International Monetary Fund and World Bank," he said. Afzanizam noted that members of the Organisation of the Petroleum Exporting Countries and its allies (Opec+) had agreed to increase oil supply during their meeting in May this year, pointing to stable global growth and solid market fundamentals as the basis for the decision. "On that note, there are no issues on supply of oil and therefore, the sharp spike in crude oil prices are likely to be unsustainable," he said. He added that the price surge is temporary and primarily driven by geopolitical tensions. "Fundamentally speaking, the global oil supplies are sufficient and the expected moderation in global growth would demand for oil would remain fairly stable. The price spike looks like a temporary knee-jerk reaction," Afzanizam said. Hot stocks On Friday, Bursa Malaysia's Energy Index, which boasts 31 stocks, opened at 735.96 and climbed 2.01 per cent, gaining 14.63 points to end the day at 740.76. Meanwhile, the benchmark FTSE Bursa Malaysia KLCI fell by 0.56 per cent, shedding 8.51 points to close at 1,518.11. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said markets were in the process of repricing geopolitical risk, with Brent crude potentially surging past US$80 per barrel. "In the short term, this presents a tactical opportunity for oil and gas sector trades. "Unlike the relatively short-lived two-week spike observed during the early phase of the Russia-Ukraine war, the duration of the current oil price shock could prove to be longer-lasting," he said. Sedek added that stocks worth trading on short-term oil price momentum are the stocks that have upstream exposure or increasing mix of upstream concessions vs performing O&G services. Among the most actively traded stocks, Velesto climbed 2.78 per cent to finish at 18.5 sen, while Bumi Armada edged up 2.08 per cent to 49 sen. Dialog Group advanced 3.97 per cent to RM1.57, and Perdana Petroleum rose 5.56 per cent to 19 sen. On the top gainers list, Petron Malaysia Refining & Marketing Bhd increased 3.74 per cent to close at RM3.88, while Hibiscus Petroleum surged 7.10 per cent, closing at RM1.66. Meanwhile, Deleum Bhd gained 6.21 per cent to RM1.54, Yinson Holdings added 1.29 per cent to RM2.36, and Wasco Bhd was up 4.35 per cent to close at 96 sen.
The Star
27-05-2025
- Business
- The Star
Velesto Energy profit up despite dip in revenue
The group reported first-quarter net profit growth of 12.4% year-on-year to RM52.6mil. PETALING JAYA: Velesto Energy Bhd (VEB) maintains cautious optimism about its outlook for 2025, confident that with Naga 2, Naga 4 and Naga 6 contracted until the first quarter of 2026 (1Q26), this ensures ongoing operations and stability in rig utilisation. Releasing its results for 1Q25 ended March 31, 2025, yesterday, the group reported a net profit growth of 12.4% year-on-year (y-o-y) to RM52.6mil, despite revenue sinking 33.6% to RM224.6mil. This translates to an earnings per share of 0.64 sen. VEB attributed the lower turnover to completion of the i-RDC project and lower rig utilisation in 1Q25, while pointing to lower finance costs and depreciation during the quarter as factors behind the improved profitability. Compared to the preceding quarter ended Dec 31, 2024, net profit edged lower by 4.6% from RM55.2mil. This is as turnover decreased 18.6% from RM276.1mil.
The Star
27-05-2025
- Business
- The Star
Velesto's 1Q net profit jumps to RM52.61mil on higher charter rates
KUALA LUMPUR: Off the back of an improved bottomline in the first quarter of 2025 (1QFY25), Velesto Energy Bhd says increasing offshore activities in Southeast Asia signal strong market momentum, as reflected in recent contract wins in Vietnam and Indonesia. "We are strategically focused on maximising rig utilisation, maintaining cost efficiency to sustain healthy margins, and driving shareholder returns. "Our priority remains clear—delivering long- term, sustainable value to all stakeholders," said Velesto president Megat Zariman Abdul Rahim in a statement. In 1QFY25, Velesto recorded a higher net profit of RM52.61mil compared to RM46.81mil in the year-ago quarter. Earnings per share rose to 0.64 sen from 0.57 sen previously. According to the group, the improved profitability was owing to an increase in average daily charter rate to US$127,000 a day, which helped offset the lower rig utilisation rate. The rig utilisation rate had slipped to 67% from 94% in 1QFY24, primarily due to idle periods for NAGA 3 and NAGA 5. The group's revenue during the quarter under review, however, fell to RM224.65mil from RM338.58mil. Moving forward, Velesto said the Special Periodical Surveys (SPS) for NAGA 8 and NAGA 3 are on track for completion in the second quarter of 2025. Following the completion of SPS, NAGA 8 is scheduled to commence operations in Indonesia in the third quarter of 2025. As at April 2025, Velesto's order book has doubled to RM1.4bil, providing earnings visibility until 2028.
