Sapura Energy Berhad has announced positive financial results in the first quarter of the financial year 2023 (“Q1 FY2023”), posting Group profit after tax and minority interests of RM92 million, on the back of RM250 million EBIDTA from revenue of RM886 million.
The group improved its performance from the preceding quarter when it posted a loss after tax and minority interests of RM6.8 billion. In the same quarter, the Group recorded an operating loss of RM1 billion on the back of RM427 million revenue. All operating subsidiaries returned positive EBITDA with Engineering & Construction delivering RM62 million EBITDA from RM587.8 million revenue; Operations & Maintenance delivering RM31 million EBITDA on the back of RM120.9 million revenue; and Drilling delivering RM50 million EBITDA on the back of RM231.8 million revenue.
As part of its restructuring plan, the Group embarked on a series of negotiations with clients for amicable solutions to ensure project delivery. Its PATAMI in Q1 FY2023 was mainly derived from such ongoing efforts, which materialised through approved commercial settlements and favourable foreign exchange gains following the strengthening of the U.S dollar.
“We are seeing the first green shoots of recovery, following the implementation of our Reset Plan,” said Sapura Energy Group CEO Datuk Mohd Anuar Taib. “We still have significant hurdles to overcome before we can sustain this encouraging momentum.” Sapura Energy is currently classified as a PN17 company and a regularisation plan, based on the Group’s Reset Plan, is currently being formulated.
In March, the High Court of Kuala Lumpur allowed Sapura Energy and 22 of its wholly-owned subsidiaries to begin a scheme of arrangement (“SOA”) process with its lenders and trade creditors, as part of the Group’s effort to reduce unsustainable debt and resolve outstanding payments to vendors. The High Court also granted three-month restraining orders to Sapura Energy and 22 of its wholly-owned subsidiaries, so that these entities may negotiate a compromise with its trade creditors without disruption to operations. Sapura Energy also entered into separate contractual arrangements with its lenders for a standstill on claims.
The Group recently received a drawdown of RM300 million from its existing working capital facility, backed by proceeds from the disposal of its pipe-laying and heavy-lift vessel Sapura 3000. It is also working to secure additional sources of funding. Sale of Sapura 3000, in line with the Group’s portfolio rationalisation, is expected to be completed by end July. The Group’s remaining fleet is capable of delivering its current and future business plan
Sapura Energy recently disclosed that its Drilling and E&C business segments secured major contract awards in the Eastern and Western Hemispheres with a combined value of about RM2.5 billion, and an additional win of almost RM0.2 billion contributed by its joint venture company. The Group’s order book currently stands at RM8.3 billion. These awards signal a deliberate shift in its bid strategy to focus on areas where it is highly competitive.
Meanwhile, the Group’s Drilling business segment won three long-term contracts for its offshore tender-assist drilling rigs from PTTEP Energy Development Company Limited (“PTTEP”), and obtained another award for a new drilling campaign, offshore Malaysia.
In Q1 FY2023, the Group completed 11 major projects, including offshore transportation and installation in Congo; engineering, procurement, construction, installation, and commissioning (“EPCIC”) contract in Mexico, and a drilling campaign in Sarawak.
Sapura Energy added that it will continue executing project activities during the rest of the year with more than 50 ongoing projects across its business segments. It commenced several major projects in the second quarter of FY2023, including offshore installation and drilling campaigns in Peninsular Malaysia, Trinidad & Tobago, and Gabon, Africa.
