Sapura Energy Berhad made significant improvements in its finances announcing positive earnings for the second quarter of FY2023 with EBIDTA of RM313 million, and revenue of RM1.17 billion.
The Group posted an RM3 million loss after tax and minority interests, mainly due to its share of write-off and impairment recognised by its Exploration & Production strategic partnership SapuraOMV Upstream. In the preceding quarter, the Group posted a profit after tax and minority interests of RM 92 million and EBITDA profit of RM250 million on the back of RM886 million in revenue. In the corresponding quarter last year, the Group recorded a loss of RM1.5 billion and an EBITDA loss of RM1.17 billion on the back of RM747 million in revenue.
The latest performance is mainly attributable to commercial settlements from certain contracts in its Engineering & Construction, materialisation of additional claims in Operations & Maintenance, and improved rig utilisation and day rates in its Drilling business segment. The Group’s E&C business segment continues to be under challenge by the current operating landscape. Despite the challenges, all business segments registered positive EBITDA, with E&C delivering RM38 million; O&M delivering RM47 million, and Drilling delivering RM150 million.
“We are encouraged by our financial performance this quarter, as it indicates early results in our Reset Plan and we are on the mend. Clearly, the game-changer in our future growth is the reduction of unsustainable debt, which we are working hard to resolve with all stakeholders,” said Sapura Energy Group CEO Datuk Mohd Anuar Taib.
Sapura Energy recently sought assistance from the Corporate Debt Restructuring Committee of Malaysia (“CDRC”), a committee under the purview of Bank Negara, to mediate its debt restructuring negotiations with lenders. CDRC has accepted Sapura Energy’s application and the Group is expected to submit a proposal for a restructuring of its debts within 60 days from September 1. As part of portfolio rationalisation, the Group recently completed the divestment of its heavy lift pipe laying vessel Sapura 3000 and entered into a memorandum of agreement (“MOA”) for the disposal of three drilling rigs.
The Group is also making progress in its proposed scheme of arrangement. Sapura Energy and 22 of its wholly-owned subsidiaries are completing the verification of claims submitted by its creditors under the proof of debt exercise. Under the Reset Plan, the Group’s business segments refocused its bid funnel based on capabilities and risk appetites, while enhancing project management discipline.
The Group is currently executing close to 90 projects globally, nine of which commenced in the Q2 FY2023, and completed 18 projects in the same quarter. Its order book to-date stands at RM7.7 billion.