Velesto Energy's Second Quarter Profit Plummets Amid Lower Utilization Rates

Velesto Energy Berhad experienced a sharp decline in net profit for the second quarter of its financial year ending June 30, 2026, reporting RM531,000 compared to RM50.44 million in the corresponding period of the previous year. This downturn was primarily driven by reduced utilization rates and lower daily charter rates for its drilling rigs.

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The performance in the second quarter was lower, mainly due to lower utilization rates and daily charter rates. However, I expect performance to improve in the coming quarters, supported by contracted activities.

The company's revenue for the quarter also saw a decrease, falling to RM154 million from RM199 million year-on-year. For the first six months of the fiscal year, Velesto recorded a net profit of RM28.38 million, a substantial decrease from RM103 million in the same period last year. Revenue for the half-year period stood at RM337 million, down from RM424 million.

During the quarter, Velesto operated at a 66% utilization rate with an average daily charter rate of $103,000. The company also declared an interim dividend of 0.25 sen per share, bringing the total interim dividends declared for the year to 1.0 sen per share.

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Five of our six drilling rigs have been contracted until the end of 2026, with a solid order book of RM1.3 billion and prospects worth RM3.7 billion as of July 2026.

Velesto President Megat Zariman Abdul Rahim expressed that while the second-quarter performance was lower, he anticipates an improvement in the coming quarters. This optimism is supported by a robust order book totaling RM1.3 billion, with potential prospects valued at RM3.7 billion as of July 2026. Five of the company's six drilling rigs are contracted through the end of 2026.

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We maintain strong operational performance by achieving 99.9% uptime, and continue our asset-light growth strategy through successful acquisition of Hibiscus contracts via third-party rigs and the Chevron i-RDC 2.0 contract for NAGA 8.

The company highlighted its strong operational performance, achieving 99.9% uptime. Velesto continues its asset-light growth strategy, evidenced by securing contracts for Hibiscus through a third-party rig and the Chevron i-RDC 2.0 contract for NAGA 8. The company is also actively exploring opportunities for NAGA 3. Velesto noted sustained demand for jack-up drilling services in Malaysia and Southeast Asia, emphasizing a continued focus on energy security.

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We are also actively exploring opportunities for NAGA 3. With a continued focus on energy security, we see demand for jack-up drilling services remaining strong in Malaysia and throughout Southeast Asia.