Quick take: Sapura Energy shares fall as Shahril steps down

  • Stock on the Move
  • Tuesday, 22 Sep 2020

KUALA LUMPUR: Shares in Sapura Energy Bhd fell in early trade Tuesday following its president and chief executive officer (CEO) Tan Sri Shahril Shamsuddin surprising retirement plan.

The oil and gas support services provider fell 4.17%, or 0.5 sen to 11.5 sen with 33 million shares traded.

Sapura Energy announced on Monday that Shahril is retiring from his executive post in March 2021 after spending 25 years leading the oil and gas company.

The company said non-executive director Mohd Anuar Taib will be appointed COO and CEO-designate from Oct 1 onwards as part of a six-month transition before Shahril’s retirement.

AmInvestment Bank Research has maintained its sell on Sapura Energy with an unchanged fair value of RM0.05/share, pegged to 0.2x to the group’s FY22F NTA as the group could still experience potential losses and asset impairments in the upcoming quarters amid revenue deferrals.

“We are surprised by this new development, as Sapura, which started as a diving contractor, has been a part of the group of companies started by Shahril’s family. Also, he did not provide

any indication of his retirement during an analyst briefing last Friday,” it said.

Nevertheless, AmInvestment is positive on Shahril’s designated successor, Anuar who comes with a commendable track record of senior working experience and a well-established network with Petronas and Shell.

The research house noted that the group’s huge debt of RM10bil still needs to be refinanced with 14 banks by December 2020, which could mean additional equity-raising exercise in the pipeline that will translate to massive dilution given the current low share price.

“Even though Sapura registered an improvement in 1HFY21 results, we remain cautious of potential cost provisions and asset impairments by 4QFY21 given that Petronas has posted a 1HFY20 loss of RM18bil, together with other oil majors,” it said.

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