Sapura Energy’s second contract win in FY19 garners approval

KUALA LUMPUR: Sapura Energy Bhd’s (Sapura Energy) second contract win in financial year 2019 (FY19) has garnered approval from analysts.

In a filing to Bursa Malaysia, Sapura Energy announced that wholly-owned subsidiary, Sapura Fabrication Sdn Bhd has been awarded a contract from Mubadala Petroleum (MDC Oil & Gas (SK 320) Ltd) to undertake engineering, procurement, construction, installation and commissioning (EPCIC) works for the Pegaga Development Project.

“The contract scope of work comprises of engineering, procurement, construction, installation and commissioning of an offshore integrated central gas processing platform (ICPP) facility in Block SK320, offshore waters of Sarawak, Malaysia.

“The works are expected to be completed by third quarter of 2021,” the filing read.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) was positive on this second contract win in FY19, which demonstrated Sapura Energy’ s“ability to win contract continuously amidst the competitive environment”.

“We estimate the EPCIC contract value to worth up to RM2 billion, doubling the 19,000 metric-tonne weighted Bokor’s CPP, which is valued at RM1 billion,” Kenanga Research said.

The research arm reckoned the project earnings before interest, tax, depreciation and am or tis at ion (EBITDA) margin to match Sap ur a Energy’ s first nine months of 2018 (9M18) engineering and construction( E& C) performances at 15 per cent, anticipating RM100 million EBITDA per annum (circa eight per cent of its FY19 estimates).