Sapura Energy swings to RM24m net profit in Q2

KUALA LUMPUR, Sept 18 — Sapura Energy Bhd has managed to sustain its profitability for the second consecutive quarter, posting a net profit of RM23.74 million for the three months ended July 31, 2020.

This followed a net loss of RM4.56 billion for the financial year ended January 31, 2020, due to, among others, a RM3.3 billion impairment of goodwill and property, plant and equipment as well as a RM438.8 million provision on anticipated further delays on completion of projects due to the Covid-19 pandemic.

While the company returned to the black in the second quarter (Q2) from a net loss of RM116.31 million a year earlier, revenue slipped 36.7 per cent to RM1.22 billion from RM1.93 billion previously.

In a statement to Bursa Malaysia today, the offshore supporting services company attributed the better bottom-line performance mainly to improved operating metrics from its engineering and construction (E&C) division.

However, it said movement curbs imposed by governments to combat the pandemic had reduced activities for Sapura Energy’s E&C and drilling divisions, resulting in the lower revenue compared with the RM1.4 billion recorded in the first quarter.

Nevertheless, it said it had adapted to the new norms by leveraging on capabilities and strategic assets to capture opportunities in addressable markets and segments while executing a comprehensive cost optimisation plan to ensure lean and efficient operations.

President and group chief executive officer Tan Sri Shahril Shamsuddin said the company had identified cost optimisation initiatives valued at about RM1.1 billion to be executed over 12 months.

“Approximately RM450 million worth of initiatives have been fully implemented to-date, including operations productivity improvement and capital expenditure optimisation, a group-wide salary reduction exercise and an extensive review of commercial opportunities within existing contracts,” he said.

Meanwhile, Sapura Energy said its current orderbook stood at RM13.3 billion with RM1.6 billion in cumulative new contract wins year-to-date.

“As part of its sustainable growth strategy, the company has embraced the shift to renewable and clean energy, utilising its existing assets to diversify into renewable energy projects,” it said.

It said offshore wind was likely to contribute a growing share of its addressable market and the company was currently looking at five bids and prospects in renewables as well as increasing its focus on natural gas as the world’s transition fuel.

Moving forward, Sapura Energy said the environment in the oil and gas industry was expected to remain challenging in the short to medium term but it remained optimistic of its ability to navigate the current uncertainties.

It added that the company would continue to focus on safe and efficient operations across its business segments, deliver its cost optimisation targets and improve financial strength and be well-positioned to capture opportunities as the market recovers. — Bernama

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