Sapura Energy’s net loss widens to RM101m in 3QFY20

by AFIQ AZIZ/ pic by TMR FILE

SAPURA Energy Bhd’s net loss tripled to RM100.89 million in the third quarter ended Oct 31, 2019 (3QFY20), from a net loss of RM31.09 million recorded in the same quarter last year, as most projects or activities, mainly involving engineering and procurement (E&P), are in early execution phases with lower project margins.

This was also the third straight quarterly loss for the group, although revenue increased 47.4% to RM1.78 billion in 3QFY20 from RM1.21 billion a year ago.

“In the current quarter, the group recorded a loss before taxation from continuing operations of RM113.2 million which was higher by RM61.1 million compared to RM52.2 million in 3QFY19,” the company said in an exchange filing yesterday.

It attributed the higher quarterly revenue to the engineering and construction (E&C) segment, as more activities were conducted in the division during the quarter.

The E&C segment reported lower pretax profit of RM16.09 million for the quarter versus RM39.6 million last year, due to lower project margins and lower share of profit from associates and joint ventures (JVs).

The drilling segment also recorded a higher pretax loss of RM48.2 million for 3QFY20 against a pretax loss of RM11.7 million previously, mainly due to lower operating days pending commencement of the new contracts.

For the nine months ended Oct 31, 2019, the group’s net loss widened to RM326.3 million compared to a net loss of RM292.88 million a year ago, while revenue grew 73.1% to RM5.34 billion from RM3.08 billion in 3QFY19.

“We will continue to focus on turning the corner as we further enhance operational performance and identify and pursue opportunities globally,” Sapura Energy president and group CEO Tan Sri Shahril Shamsuddin (picture) said.

Moving forward, the group is expecting a challenging period for the oil and gas industry. It also said it has secured new contracts for its E&C and drilling segments worth RM615 million.

This brings the group’s total orderbook year-to-date to RM15.1 billion which will increase work volume and asset utilisation.

The group said Sapura Fabrication Sdn Bhd has won a contract from Hess Exploration and Production Malaysia BV under the Petronas (Petroliam Nasional Bhd) frame agreement, for the provision of engineering, procurement, construction and commissioning plus the installation for Full Field Development Phase 3 Facilities in the North Malay Basin, offshore Peninsular Malaysia.

The group will also be under-taking its first deep-water project in Area 4, Rovuma Basin, offshore Mozambique, following a contract awarded by Mozambique Rovuma Venture SpA, a JV between ENI SpA, ExxonMobil and China National Petroleum Corp, to provide a subsea installation vessel for transportation and installation of Christmas trees.

In Brazil, Sapura Navegação Marítima SA has been awarded a contract extension from Petróleo Brasileiro SA to charter and operate Sapura Topazio.

For the group’s drilling segment, Sapura Drilling Asia Sdn Bhd has been awarded a contract extension for the provision of its semi-submersible tender assisted drilling rig, Sapura Esperanza, by Sarawak Shell Bhd/Sabah Shell Petroleum Co Ltd.

“The contract, which entails drilling six wells for Malikai Phase 2 drilling campaign, offshore Sabah, will see work commencing in 3QFY21,” it added.