Sapura Energy second quarter net profit slumps

PETALING JAYA: Malaysia’s largest oil and gas services firm Sapura Energy Bhd’s net profit plunged 74% in its second quarter ended July 31, weighed down by lower activities from its drilling business.

The company that benefits from oil price sentiment told the stock exchange that net profit dropped to RM28.93mil in the quarter from RM112.27mil a year ago.

The price of Brent crude oil hit a 26-month high on fresh supply yesterday.

Revenue dipped marginally to RM1.66bil from RM1.68bil, impacted by weaker drilling and exploration and production (E&P) business segments.

The weaker performance led to a lower basic earnings per share of 0.49 sen from 1.89 sen during the same period a year ago.

For the first half of financial year 2018 (FY18), Sapura Energy’s net profit slumped 74.6% to RM56.46mil from RM222.57mil previously on a lower revenue of RM3.43bil from RM3.62bil before.

Sapura Energy’s sluggish earnings in FY18 was in line with analyst projections since the timing of its order book replenishment was rather uncertain, while drilling rig utilisation rates have been forecast to recover only from FY19 onwards. Sapura Energy said its engineering and construction segment revenue for the quarter of RM2.46mil was 35% higher compared to the previous corresponding period, affected by a lower revenue from the drilling and E&P divisions.

“Profit before taxation (PBT) of RM138.1mil was RM173.2mil lower than RM311.1mil in the previous corresponding period, in line with a lower revenue from the drilling segment and the financial impact arising from the cessation of the Berantai RSC in the previous corresponding period,” said the company’s filings. Sapura Energy’s drilling segment revenue for the current period dropped almost 43% to RM664mil, as certain rigs were off-contract during the period.