KUALA LUMPUR, MALAYSIA, 29 JUNE 2020 – VELESTO ENERGY BERHAD (“VELESTO” or the “Company”) held its 10th Annual General Meeting (“AGM”) today in a virtual setting, in Kuala Lumpur. Close to 200 shareholders and proxy holders virtually attended the AGM which was conducted online in compliance with the Government’s call for social distancing in a bid to fight COVID-19. The Company’s shareholders approved all resolutions put forward including:

1. The re-election of Mohd Rashid Mohd Yusof, Rowina Ghazali Seth, Haida Shenny Hazri, and Datuk Tong Poh Keow as Directors of Velesto Energy Berhad;
   
2. The Directors’ Fees, Meeting Allowances and other benefits from the 10th Annual General Meeting until the next Annual General Meeting;
   
3. The re-appointment of Messrs. Ernst & Young PLT as the Company’s Auditors for the year ending 31 December 2020 and to authorise the Board of Directors to determine their remuneration; and
   
4. The reduction of the issued share capital of the Company via the cancellation of RM2,210,000,000 and that the credit arising from such share capital reduction be used to eliminate the accumulated losses of the Company.

In the 2019 financial year (“FY2019”), the Group recorded a total revenue of RM671 million, which translated to an increase of around 17%, from RM574 million in FY2018. This was primarily contributed by the improvement of utilisation rate from 73% in FY2018 to 80% in FY2019.

FY2019 marked the year where the Company returned to profitability after four (4) years of continuous losses. This performance also saw EBITDA rising by 19% to RM333million (FY2018: RM279 million). The Drilling Services segment, including Workover Services contributed 98% of the Group’s revenue, significantly generated the profits earned in FY2019. The Oilfield Services segment posted revenue of RM10 million, 37% lower, year-on-year (FY2018: RM16 million). The decline was due to the rationalisation exercise which was completed in 2018.

Rohaizad Darus, President, Velesto Energy Berhad shared, “FY2019 saw a higher rig utilisation rate of 80%, the Group’s highest since 2014. Almost all rigs saw increased year-on-year utilisation on the back of long-term contracts secured. The daily charter rates have also improved, albeit marginally. VELESTO has also tendered for about RM3.3 billion contracts including overseas work by end of 2019. Unfortunately, the industry outlook has turned negative in early 2020 due to the impacts of the COVID-19 pandemic and the collapsed crude oil prices. But, this time around the Group is on a better footing both financially and operationally to face the challenges; after the restructuring, cost reduction and efficiency improvements exercises undertaken over the past several years during the previous industry downturn. Rest assured, VELESTO is Striving Together with you.”

Recently, VELESTO also saw the appointment of Mohd Rashid Mohd Yusof as its Non- Independent Non-Executive Chairman following the resignation of Dato’ Abdul Rahman Ahmad who relinquished his post effective 10 June 2020 consequent of his appointment at CIMB Group Holdings Berhad. Rashid Yusof has over 40 years of oil and gas industry experience, and VELESTO looks forward to his leadership and dedication to steer the Group forward and help successfully navigate the Group through the current challenging oil and gas environment.

VELESTO is cognisant of the challenges facing its operations because of COVID-19 and volatility of oil prices. We are committed to deliver safe and efficient operations continuously all the time and has elevated our efforts to navigate these challenges and sustain our business performance during these trying times.