Summary of financial performance:

• Revenue increased by 93 per cent quarter-on-quarter to RM1.6 billion, supported by strong growth
  in Engineering & Construction (E&C) and Drilling segments
• Engineering & Construction segment returned to profitability
• Positive effects from corporate exercises resulted in an improved balance sheet
• Lower loss-after-tax and minority interest of RM109 million
• Net debt-to-equity at 0.66 times
• Current cash and cash equivalents at RM860 million
• Cumulative new contract wins to-date of approximately RM2.3 billion
• Order book at RM17.3 billion

Sapura Energy Berhad continued to improve its financials for the first quarter ended 30 April 2019 (Q1FY20) on strong revenue growth in core business segments and materialisation of effects from its corporate exercises, namely the rights issue and partnership with OMV.

Sapura Energy’s revenue grew by 93 per cent quarter-on-quarter to RM1.6 billion, compared to RM845 million in the corresponding quarter of the preceding year. The Group posted a lower loss-after-tax and minority interest of RM109 million, compared to RM184 million in Q1 FY19 from continuing operations.

With the completion of the corporate exercises, the Group benefitted from savings in finance cost following the repayment of borrowings of RM7.2 billion. Net debt-to-equity stood at 0.66 times compared to a high of 1.73 times as at the end of October 2018.

“We are pleased that the corporate exercises we undertook have materialised, bringing positive effects to the Group’s financials,” said Tan Sri Shahril Shamsuddin, President and Group Chief Executive Officer, Sapura Energy.

“The operating environment will continue to be challenging; nevertheless, our focus remains resolute. We will persevere in building a resilient balance sheet, optimising our resources and assets, and targeting growth through order book expansion as well as safe and efficient project execution. We have continued to make good progress in delivering on our strategy,” Tan Sri Shahril added.

The Group’s Engineering & Construction (E&C) segment returned to profitability on a revenue of RM1.4 billion, which was RM737.2 million higher than the revenue of RM665.6 million in Q1 FY19. The more than 100 per cent quarter-on-quarter growth was due to increasing work volumes. The segment recorded a 32 per cent higher operating profit of RM48.0 million for the current quarter, compared to RM36.5 million in Q1 FY19.

The Drilling segment registered a revenue of RM230.4 million for the current quarter. This was 25.6 per cent higher than the revenue of RM183.4 million in Q1 FY19 due to an increase in the number of working rigs compared to Q1 FY19. As a result, the segment recorded a 25.9 per cent lower operating loss this quarter at RM50.9 million, compared to an operating loss of RM68.7 million in Q1 FY19. The outlook for Drilling is expected to improve as the number of operating rigs rises from five this quarter to seven by the second half of FY20.

The Group’s order book for the current quarter remained at RM17.3 billion, with cumulative new contract wins to-date of approximately RM2.3 billion. In terms of contract wins, Sapura Energy recorded several firsts in Q1 FY20, including the following:

• maiden entry into Egypt for transportation and installation works in the Gulf of Suez;
• first undertaking of a submarine rescue service contract for The Royal Australian Navy;
• first offshore wind farm contract for transportation and installation of offshore wind turbine substructures at the Yunlin Offshore Wind Farm in Taiwan - a strategic value proposition for the Group in diversifying its capabilities and the use of its strategic assets for a growing renewable energy market;
• and a long-term frame agreement with PETRONAS for Engineering, Procurement and Construction
  works.

In addition, the Group will be mobilising five drilling rigs for works across Malaysia and Thailand.

The contract wins demonstrate Sapura Energy’s continued pursuit in its growth strategy. The expanding order book is expected to increase asset utilisation and further contribute to improving its financial performance. The Board is confident that the Group is well-positioned for further growth.

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.