KUALA LUMPUR: PublicInvest research has maintained its outperform rating on Sapura Energy
on the back of its improving outlook despite a wider-than-expected core net loss in FY19.
It cuts the group's earnings forecasts by an average of 67% for FY20/21 and lowered the target price to 43 sen.
"We also expect FY22 to be much stronger with net earnings of close RM200m backed by its solid orderbook in hand of RM17.2bn (including RM9.3bn secured in FY19) and potential new jobs win from its active tenderbook of c. RM45.1bn as well as improved contribution from E&P segment," it said.
In a research note, PublcicInvest said the group's core net loss of RM654,8mil for the year was larger than its and consensus expectations of a loss of RM498.5mil and RM364.7mil respectively.
The research house said Sapura Energy posted a relatively bigger core net loss of RM286.1mil in 4QFY19 after stripping out some exceptional items including RM1.5bil impairment on goodwill and PPE, RM2.7bil gain on disposal of 50% stake of its upstream business and RM281mil from other provision and forex.
"The weak performance was mainly attributed to lower recognition from the E&C and drilling segments as a result of higher cost incurred as most of the E&C projects are still in the initial procurement phase as well as low utilization of assets," it said.
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