Sapura Energy posts RM500m profit in 4Q


Sapura Energy Bhd’s gain on the disposal of a stake in its upstream asset enabled it to post a net profit of RM500 million in the fourth quarter (4Q) ended Jan 31, 2019, after making RM1.5 billion worth of impairments.

The integrated oil and gas (O&G) service provider made a RM2.66 billion gain on disposal of a 50% stake in its exploration and production (E&P) subsidiary.

However, the firm made a RM108.4 million provision for impairment on goodwill on consolidation and RM1.42 billion worth of impairments on its drilling, engineering and construction (E&C) assets, which was lower than the RM2.13 billion impairments a year ago.

The company has declared a special dividend of 0.5 sen a share for the year, payable on June 24, 2019.   

At the operating level, Sapura Energy posted a loss of RM2.2 billion or loss per share of 35.43 sen.

Quarterly revenue rose 65.56% year-on-year (YoY) to RM1.49 billion on higher revenue from its E&C business segment.

For the financial year ended Jan 31, 2019 (FY19), the gain on asset sale allowed the group to post a net profit of RM207.55 million against a net loss of RM2.5 billion in FY18.

The group’s yearly revenue decreased 9.5% YoY to RM4.57 billion — primarily due to lower revenue from the E&C and drilling businesses.

“Our focus for FY19 is to strengthen our balance sheet and position the group to capitalise on the emerging opportunities,” Sapura Energy president and group CEO Tan Sri Shahril Shamsuddin (picture) said in a statement yesterday.

“We successfully completed two major corporate exercises, where we raised RM7.6 billion.

“This has enabled us to reduce our net gearing to a healthy 0.6 time and provided the financial flexibility for the group to bid for and execute higher value projects, in addition to gaining a strong partner in our E&P business,” he added.

Sapura Energy’s cash and cash equivalents stood at RM8.1 billion.

Its E&C business revenue for FY19 was 7.4% lower YoY at RM3.67 billion, in line with lower activities in the industry during the year.

The drilling segment’s revenue for FY19 fell 18.5% YoY to RM933.5 million, mainly due to the unfavourable exchange rate and lower number of rigs in operations.

Its E&P segment recorded a revenue of RM936 million, 10.9% higher YoY due to higher liftings and higher average realised O&G price in FY19.

For FY20, Sapura Energy will remain focused on growing and executing its current orderbook, as well as delivering strong operational performance.

The group’s contract wins of RM9.3 billion in FY19 was 230% higher YoY and has lifted its current orderbook to RM17.2 billion, the highest in two years.

Sapura Energy said it continues to aggressively pursue new opportunities in the Middle East, Africa, Asia Pacific, Europe, the Caspian and the Americas.