Kuala Lumpur, 5 December 2019
Summary of first nine months (9M FY20) financial results:
- Revenue grew by 73 per cent year-on-year to RM5.3 billion
- Net loss narrowed by 33 per cent to RM326 million
- Engineering & Construction segment recorded 93 per cent year-on-year growth to RM4.7 billion, with 64 per cent increase in profit-before-tax to RM91 million
- Drilling segment posted a marginal increase in revenue at RM688 million and a narrower lossbefore- tax of RM135 million
- SK408 phase 1 development on track, with first gas from Larak field by end of year
- New contract wins of RM3.7 billion year-to-date
- Order book value stood at RM15.1 billion
For the first nine months ended 31 October 2019 (9M FY20), Sapura Energy Berhad registered a 73 per cent growth in revenue at RM5.3 billion, compared to RM3.1 billion in the previous corresponding period (9M FY19). The improved revenue enabled the Group to further trim its net losses by 33 per cent to RM326 million in the nine-month period from RM483 million previously.
For the quarter (Q3 FY20), revenue improved by 47 per cent year-on-year to RM1.8 billion from RM1.2 billion previously, while net loss remained at RM101 million. The results reflect the large volume of projects or activities that are in their early execution phases, involving mainly engineering and procurement, with lower project margins.Depreciation and amortisation as well as finance costs have reduced as an outcome of impairments undertaken in the previous financial year and repayment of borrowings earlier this financial year, respectively.
“Our performance in the first nine months reflected our resilience to sustain our businesses amidst prevailing market conditions. We will continue to focus on turning the corner as we further enhance operational performance, and identify and pursue opportunities globally,” said Tan Sri Shahril Shamsuddin, President and Group Chief Executive Officer, Sapura Energy.
On a segmental basis, the Engineering & Construction (E&C) business registered 93 per cent higher yearon- year in revenue for 9M FY20, from RM2.4 billion to RM4.7 billion, owing to higher activities during the period. Consequently, the segment recorded a profit-before-tax of RM91 million, which was higher by 64 per cent compared to RM56 million in the corresponding period.
The Drilling segment recorded a revenue of RM688 million for the period, a marginal increase from the corresponding period of RM683 million. The segment posted a slightly lower loss-before-tax of RM135 million, compared to RM139 million in the corresponding period. Rig utilisation is expected to increase in Q4 FY20 in line with the improving outlook for this segment.
The Group’s order book remains healthy at RM15.1 billion, with recent notable contract wins from Hess Exploration and Production for the provision of Engineering, Procurement, Construction, Commissioning and Installation for the Full Field Development Phase 3, North Malay Basin under the PETRONAS Frame Agreement; from Mozambique Rovuma Venture for the provision of subsea installation vessel to undertake offshore deep water Christmas Tree transportation and installation in Area 4 Rovuma Basin, offshore Mozambique; from Petrobras for a contract extension of Sapura Topázio; and from Shell Malaysia for the extension of Sapura Esperanza for Malikai phase 2 drilling campaign, offshore Sabah.
Under the full-term Upstream Gas Sales Agreement with PETRONAS for SK408 phase 1 development, the Group, SapuraOMV Upstream (Sarawak) Inc. and its partners, PETRONAS Carigali Sdn Bhd and Sarawak Shell Berhad, will be supplying gas produced from the Gorek, Larak and Bakong fields to the PETRONAS Liquefied Natural Gas (LNG) Complex in Bintulu. First gas from the Larak field is expected by end of the year.
The Group expects the industry outlook to remain challenging. Sapura Energy remains resolute in its strategy to continue to pursue more global opportunities by leveraging on its capabilities, track record and strong asset base.
Cautionary note: “Sapura Energy”, “the group” and “the company” are used for convenience where references are made to Sapura Energy Berhad in general. Similarly, words like “we”, “us” and “our” are used to refer to Sapura Energy Berhad in general or to those who work for the company and its subsidiaries, where relevant. This press release may contain forward-looking statements. All statements other than statements of historical facts included in this press release, including, without limitation, those regarding our financial position, financial estimates, business strategies, prospects, plans and objectives for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Such forward-looking statements reflect our current view with respect to future events and are not a guarantee of future performance. Forward-looking statements can be identified by the use of forward-looking terminology such as the words “may”, “will”, “would”, “could”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “aim”, “plan”, “forecast” or similar expressions and include all statements that are not historical facts.