Kuala Lumpur, 27 September 2023
Summary of Q2 FY2024 financial results:
- Revenue of RM1.14 billion
- EBITDA of RM209 million
- PATAMI of RM43 million
- Current order book at RM6.3 billion
Sapura Energy Berhad (“Sapura Energy”) and its group of companies (“the Group”) today announced its financial results for the second quarter ended 31 July 2023 (“Q2 FY2024”), recording profit after tax and minority interests (“PATAMI”) of RM43 million, on the back of earnings before interest, taxes, depreciation, and amortisation (“EBITDA”) of RM209 million, and revenue of RM1.14 billion.
The results, which followed a profitable first quarter in financial year 2024 (“Q1 FY2024”), showcased the Group’s resilience in overcoming multiple operational challenges. These challenges include escalating project and financing costs, as well as the lack of access to bank guarantees and working capital, which in turn affected order book replenishment.
Despite the setbacks, Sapura Energy recorded a marginally higher revenue of RM2.09 billion in the first half of financial year 2024 (“H1 FY2024”), compared with RM2.06 billion in the same period of financial year 2023 (“H1 FY2023”). Profit before taxation (“PBT”) almost doubled, from RM122 million in H1 FY2023 to about RM238 million in H1 FY2024.
Group Chief Executive Officer Datuk Mohd Anuar Taib said, “We are building on our steady recovery to set the stage for future growth. To maintain this positive momentum, we will continue to improve the Group’s cashflow and EBITDA; and strengthen operational efficiencies to protect project margins and drive consistent results.”
In Q2 FY2024, the Group reported a decrease in EBITDA compared to the preceding quarter, primarily attributed to project delays within its Engineering & Construction (“E&C”) and Operations & Maintenance (“O&M”) business segments. Its Drilling business segment continued to demonstrate robust performance, driven by lower operating expenses and the commencement of new contracts. The Exploration & Production business segment, operated through the SapuraOMV Upstream joint venture, also maintained consistent performance during the reviewed quarter, albeit with a slight decline in average gas production, mainly due to a scheduled shutdown.
Sapura Energy remains committed to its strategic direction of rebalancing its global portfolio and deploying key assets in regions where it can be competitive, as reflected in its order book of RM6.3 billion.
Datuk Anuar said, “We are actively repositioning ourselves geographically to seize opportunities across all our business segments, bidding right and pursuing major projects in Africa, the Mediterranean, the Atlantic, and the Asia Pacific region. The trusted partnerships we have built with clients have helped us to navigate limited liquidity issues, enabling us to win more work.”
Currently, more than 60 percent of its order book are for contracts outside of Malaysia. Within the RM6.3 billion orderbook, its notable recent wins include a substantial contract in its E&C business segment, for the provision of transportation and installation services in Angola, slated for completion in the fourth quarter of 2026.
The Group’s O&M business segment secured an extension for its ‘Provision of Pan Malaysia Maintenance, Construction, and Modification’ contract, from ExxonMobil Exploration and Production Malaysia Inc. The contract, which was originally due to end this year, has been extended to 31 December 2024.
Meanwhile, the Group’s Drilling business currently has ten drilling rigs under contract, with seven deployed on international projects and three within Malaysia.
To improve its financial strength, Sapura Energy is pressing ahead with the implementation of its Reset plan to address its unsustainable debt and Practice Note 17 status. The Group is actively working towards achieving an agreement in principle with its financiers by the end of 2023.
“Addressing our unsustainable debt remains a crucial part of our sustainability, and we will continue to make every effort to resolve this with all relevant stakeholders,” added Datuk Anuar.
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.