KUALA LUMPUR (Feb 20): Oil rig operator Velesto Energy Bhd has announced a dividend per share of 0.25 sen, on the back of record quarterly profit and revenue in the fourth quarter ended Dec 31, 2023 (4QFY2023).

The dividend, amounting to RM20.54 million, is its first since FY2014 when it paid one sen per share, and only its second since listing. 

The dividends signalled improved prospects for Velesto and the upstream oil and gas industry in general.

“In Southeast Asia, particularly Malaysia, a number of new contracts have been awarded with more being tendered out,” Velesto said in its filing.

Net profit in 4QFY2023 amounted to RM66.68 million, compared to net loss of RM26 million a year ago, thanks to higher work progress, higher asset utilisation and higher charter rates.

Quarterly earnings per share came in at 0.81 sen per share, from loss per share of 0.32 sen in 4QFY2022.

Revenue came in 47.6% higher year-on-year to RM358.89 million, from RM243.07 million, its filing showed.

In the quarter, Velesto also benefitted from the absence of a one-off RM11.7 million costs incurred a year ago, due to changes to work programme and prolonged wait on weather periods during the demobilisation.

For FY2023, Velesto Energy turned around from a net loss of RM100.4 million or 1.22 sen loss per share in FY2022 to a net profit of RM99.53 million or 1.21 sen per share in FY2023.

Full year revenue also more than doubled to a record RM1.21 billion, from RM580.85 million in the same period last year.

The group attributed the improved performance to higher jack-up rig utilisation of 83% (FY2022: 62%) and higher average daily charter rates of US$94,000(RM449.085)/day (FY2022: US$77,000/day) for its drilling services segment, as well as higher utilisation of hydraulic workover units and progress of i-RDC project for its integrated project management segment.

Looking ahead, Velesto Energy sees the utilisation rate of its six rigs to remain high in 2024, with some rigs contracted up to 2026.

The group is actively bidding for new tenders for local and international contracts scheduled to be performed in 2025 and beyond.

Its oilfield services segment, which mainly operates in China, is also expected to improve as the industry outlook supports stable performance.

Velesto Energy’s shares closed one sen or 3.64% lower at 26.5 sen on Tuesday, translating into a market capitalisation of RM2.18 billion. The counter is up 15% this year.