Velesto Energy's revenue increased by 38.8% to RM176.27mil from RM127.03mil, attributing it to improved performance in the drilling services.
KUALA LUMPUR: Velesto Energy Bhd posted net profit of RM16.32mil in the first quarter ended March 31,2020, a contrast from the net loss of RM22.20mil a year ago, following a turnaround in the drilling services division.
The oil and gas services company said on Wednesday its revenue increased by 38.8% to RM176.27mil from RM127.03mil, attributing it to improved performance in the drilling services.
Revenue from Velesto’s drilling services rose by 39.8% to RM174.20mil mainly due to higher average jack-up rig utilisation of 86% as compared to 66% in the corresponding quarter.
Hence, the drilling services segment reported profit before tax of RM26.40mil against the loss before tax of RM9.50mil a year ago.
However, the going was tougher for the oilfield services segment as revenue fell by 21.6% due to its oilfield operation by a subsidiary in China in 1Q 2020.
Despite lower revenue, the segment recorded a lower loss before tax of RM2.30mil against RM3.7mil a year ago.
The higher loss in the corresponding quarter was mainly due to recognition of losses incurred from local oilfield operations.
Velesto’s others segment recorded a loss before tax of RM6.3mil which is comparable to a year ago.
When compared with 4Q 2019, its revenue dipped by 1% from RM178.10mil. This was mainly due to lower revenue from workover services as a result of lower utilisation of hydraulic workover units in the current quarter.
However, it posted a higher profit before taxation of RM17.70mil compared to RM14.60mil mainly due to higher contribution and invoicing efficiency from its drilling services segment.