Sapura Energy narrows net losses to RM31m in Q3, order book RM18.6b

Meanwhile, Sapura Offshore Sdn Bhd (SOSB) has secured a subcontract from Malaysia Marine and Heavy Engineering Sdn Bhd to transport and instal jackets, piles, bridges and appurtenances at the Bokor Central Processing Platform project. SOSB has also won a contract in India.

KUALA LUMPUR: Sapura Energy Bhd's net losses narrowed to RM31.09mil in the third quarter ended Oct 31, 2018 and its outlook improved considerably with new contract wins year-to-date of RM8.5bil and its orderbook growing to RM18.6bil. 

The global integrated oil and gas services and solutions provider announced on Thursday this was an improvement from the net loss of RM274.40mil a year ago.

Sapura Energy posted profit before tax of RM40.25mil compared with the pre-tax loss of RM209.71mil a year ago. Its revenue rose by 17% to RM1.50bil from RM1.28bil a year ago. Loss per share was 0.52 sen compared with 4.62 sen.

It attributed the better performance mainly due to higher revenue from its engineering and construction (E&C) as well as exploration and production (E&P) business segments.

“Increased E&C activities during the quarter saw a rise in revenue by 17% to RM959.8mil from RM822.3mil.  The group’s drilling segment posted a lower loss-before-tax of RM11.7mil in Q3 FY2019 from RM93.1mil a year ago,” it said. 

Sapura Energy said the number of working rigs increased to seven compared to six in the previous quarter. 

In the E&P segment, profit-before-tax rose was RM37.1mil, an increase of RM28.3mil from a year ago. The business segment's revenue rose by 43% to RM296.2mil from RM207.7mil due to higher production liftings and the effects of the higher average realised oil and gas prices achieved. 

Sapura Energy president and group CEO  Tan Sri Shahril Shamsuddin said: “The improved results indicate the Group’s initial signs of a turnaround. We are seeing an upward trend in all segments, in particular the E&C business, driven by an increase in global investments and activities. 

“As our orderbook grows, revenue will move up in tandem with project completion from commencement to book recognition.”

Sapura Energy said that in line with its strategy to penetrate into new markets and enhance its presence in key geographical locations, it has been actively bidding for and executing higher value projects globally. 

The group’s total contract wins in the current financial year-to-date has reached RM8.5bil, a three-fold increase from a year ago.

“New contracts secured, including its most recent wins in Mexico, Malaysia and India, have resulted in the group’s orderbook growing to RM18.6 billion, thus providing long-term visibility and higher utilisation of the group’s assets which will progressively increase revenue,” it said.
 
What was significant for the group was its pre-qualification as a contractor in Saudi Aramco’s Long-Term Agreement (LTA) programme. 

This will enable Sapura Energy to participate in bids for engineering, procurement, fabrication, transportation and installation (EPCI) contracts by Saudi Aramco. The LTA programme will be for a period of six years with options for extensions. 

For the nine months ended Oct 31, 2018, its net losses were still larger at RM292.88mil compared with the losses of RM217.94mil in the previous corresponding period due to larger losses in the earlier two quarters. Its revenue declined to RM3.81bil from RM4.70bil.