PublicInvest Research remains cautious on promising Sapura Energy contract wins

KUALA LUMPUR: PublicInvest Research remains cautious about the execution of Sapura Energy Bhd's projects even though the group’s contract wins ensure visibility to its topline numbers for the next few years.

The research firm maintained its 'underperform' call on the integrated oil and gas services company’s shares with the target price of two sen per unit, given its liquidity constraints to cater to such sizeable contract values despite some clients possibly providing advances to ensure the successful completion of the projects.

"Having said that, we estimate that the group’s existing orderbook has surged to RM7.0 billion after adding the new contracts to its fourth quarter of financial year 2023 orderbook of RM5.6 billion.

"Notably, the group has been granted a third extension with regard to its debt restructuring exercise, and is also in the midst of seeking extension from regulators for submission of PN17 regularisation plan," it said.

Sapura Energy’s wholly owned subsidiaries secured 10 contract wins worth RM1.4 billion across the Asia Pacific and Atlantic regions between December 2022 and May 2023, involving its engineering and construction (RM979 million), drilling (RM352 million) and operations and maintenance (RM34 million) business segments

At 10.08 am, the counter increased half-a-sen to four sen with 96.05 million shares transacted. - Bernama

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