Sapura Energy expects to be profitable in 12 months

President and group chief executive officer Tan Sri Shahril Shamsuddin said the company aims to return to the black when the utilisation of its drilling and E&C business crosses the 70% mark.

KUALA LUMPUR: Sapura Energy Bhd (SEB) expects its operations -- drilling, engineering and construction (E&C) and exploration and production (E&P) -- to be profitable in 12 months.

President and group chief executive officer Tan Sri Shahril Shamsuddin said the company aims to return to the black when the utilisation of its drilling and E&C business crosses the 70 per cent mark.

Speaking to reporters after SEB's annual general meeting today, he said the increase in the utilisation of assets will drive the group’s profitability.

Currently, its drilling division's rig utilisation is at 50 per cent and is expected to hit 70 per cent over the next 12 months.

Shahril said the stable oil prices of between US$60 and US$65 per barrel bodes well for the company and expects the price range to remain over the next two years.

The group has secured RM2.8 billion worth of projects year-to-date and targets to secure another RM3 billion worth of projects which will likely increase its orderbook up to RM22 billion from RM17.2 billion recorded in the 2019 financial year.

SEB is also actively bidding for projects in the renewable energy (RE) sector overseas, mainly in Europe, and targets to boost the revenue contribution from the segment by between 10 and 15 per cent in the future.

With Petronas actively venturing into the RE sector, Shahril said the group is preparing itself to be able to serve the industry's needs.

He said if the company wins new drilling contracts, it will allocate between RM200 million and RM300 million of its capital expenditure to complete the construction of some of its rig assets.

In the first quarter ended April 30, 2019, SEB has managed to reduce its net loss to RM109.10 million from RM135.73 million in the same period a year ago.

Revenue for the quarter jumped to RM1.63 billion against RM845.17 million previously. - Bernama