KUALA LUMPUR: Sapura Energy Bhd's earnings fell 74.2% to RM28.92mil in the second quarter ended July 31, 2017 due to losses from the drilling business and due to the cessation of the Berantai Risk Service contract.
The oil and gas services company said on Wednesday the earnings had fallen from the RM112.26mil a year ago. Its earnings per share were 0.49 sen compared with 1.89 sen.
Sapura Energy said group revenue fell 1.1% to RM1.65bil from RM1.67bil a year ago mainy due to the lower contribution from the drilling, exploration and production business.
The engineering and construction recorded higher revenue of RM1.26bil, up 58.3% from the RM796.7mil a year ago due to higher activities. Pre-tax profit rose 5.5% to RM126.70mil due to higher share of profits from associates and joint ventures.
As for drilling segment, the revenue fell 48.2% to RM278.60mil from RM537.70mil a year ago due as it was impacted by lower contribution from certain contracts which were off-contract.
However, this segment posted pre-tax loss of RM85mil compared with pre-tax profit of RM50.3mil due to the lower revenue.
Sapura Energy said the exploration and production segment recorded a fall in revenue of RM162mil compared with RM353,3mil a year ago. The decline was due to the cessation of the Berantai RSC in Q2FY2017 and lower barrels of oil lifted in the current quarter. However, it was offest by the higher average realised oil price achieved.
As for the first half, its earnings fell 74.6% to RM56.46mil from RM222.57mil in the previous corresponding period. Its revenue slipped 5.2% to RM3.42bil from RM3.61bil a year afo.
On the outlook, it said the industry condition continues to be challenging in the current financial year.
“Whilst oil prices have stabilised, the group remains cautious on the outlook of recovery in the industry's capital spending in the near term,” it said.
Sapura Energy said it has seen an increase in tendering and bidding activities across key geographies in recent months.
“To enhance its competitiveness in replenishing the orderbook, the group is focused on strengthening its position in existing markets and expanding into new markets, re-basing costs and improving operational efficiency,” it said.
As for the exporation and production segment, the development of SK310 B15 is on track and expected to begin its first gas production in the third quarter of the current financial year and provide long-term visibility on production.
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