KUALA LUMPUR, June 28 — Integrated oil and gas services provider, Sapura Energy Bhd emerged as among top traded stocks in early trade Friday after bagging 10 contracts worth RM1 billion for its engineering and construction and drilling segments across Malaysia, Thailand, Taiwan and Australia, including Sapura Energy’s first offshore wind farm contract.
The company has also been selected for a frame agreement with Petroliam Nasional Bhd (Petronas) for fixed offshore structure works.
At 10.30am, 38.1 million of its stocks were changing hands, making it the third most sought after counters in the mid-morning.
It shares edged half-a-sen higher at 30 sen.
Public Investment Bank said inclusive of these new contracts, Sapura’s outstanding order book in hand remains strong at RM17.3 billion.
“This will keep them busy over the next three years.
“We reckon these five contracts could fetch varied profit margins at an average of 15 per cent,” it said in a note, adding that the Sapura Energy’s tender book also remained strong at current US$6.8 billion (RM28.16), with the additional prospect of another US$8 billion.
Sapura Energy has also managed to reduce its net loss to RM109.10 million during the first quarter ended April 30, 2019, from RM135.73 million in the same period year-on-year.
Revenue for the quarter jumped to RM1.63 billion against RM845.17 million a year earlier.
“We deemed the results as in line as we have already anticipated slower recoveries with further improvements only to be seen in the second half of the financial year 2020 (FY2020).
“With the improved first quarter FY2020 earnings coupled with new contract wins, we opine that the group is on track to make a turnaround this year,” it added.
Hence, Public Investment Bank is maintaining an outperform rating for Sapura Energy with a target price of 43 sen per share. — Bernama
