by SULHI KHALID/ graphic by TMR
Sapura Energy Bhd narrowed its net losses in the first quarter (1Q) on higher revenue and the benefit of a healthier balance sheet.
For the 1Q ended April 30, 2019 (1Q20) the company narrowed its net loss to RM109 million from RM135 million in 1Q19 backed by net settlement of claim from previous acquisition of subsidiaries amounting to RM87.7 million.
The integrated oil and gas services company’s revenue for the period rose by 93% year-on-year (YoY) to RM1.63 billion underpinned by higher revenue reported from its Engineering & Construction (E&C) and Drilling business segment. E&C segment posted a 32% increase in 1Q revenue to RM1.4 billion following higher activities during the period.
Revenue for its drilling segment jumped 26% to RM230 million due to higher number of working rigs compared to 1Q19.
The group has entered into contracts with various banks to hedge part of its group’s borrowings.
“The group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the assets or investment is located or by borrowing in the currencies that match the future revenue stream to be generated from its investments,” it said.
Moving forward, the group continues to bank on its drilling segment as it has been able to demonstrate numerous contract awards for its drilling fleet which would translate to growth in asset utilisation in the upcoming quarters.
“The business has secured new contracts/contract extensions for its drilling rigs Sapura T-9, Sapura T-10, Sapura T-18, Sapura Berani and Sapura Esperanza,” it said
Currently, Sapura’s orderbook has increased to RM17.3 billion following new contract wins worth RM2.3 billion in FY20.
The latest were new contracts and contracts extension amounting to a combined value of RM1 billion for various installation and modification projects in Taiwan, Australia and Thailand
Sapura’s shares closed two sen lower yesterday to 30 sen, valuing the company at RM4.64 billion.