Sapura Energy’s Q2 earnings lose steam

> Net profit down 74% on lower contribution from drilling & exploration and production segments

PETALING JAYA: Sapura Energy Bhd’s net profit for the second quarter ended July 31, 2017 was slashed 74% on lower contribution from its drilling and exploration and production (E&P) segments.

The group made a net profit of RM28.93 million for the quarter, compared with RM112.27 million for the same quarter in the preceding year.

This was on marginally lower revenue of RM1.66 billion for the quarter ended July 31, compared with RM1.68 billion for the corresponding quarter in 2016.

The group said it has seen an increase in tendering and bidding activities across key geographies in recent months, and whilst oil prices have stabilised, it remains cautious on the outlook of recovery in the industry’s capital spending in the near term.

In addition, for the E&P segment, the development of SK310 B15 is on track and expected to begin its first gas production in the third quarter of the current financial year and provide long-term visibility on production.

“The board anticipates the challenging environment to persist, however, the board is confident that the group’s strategic and operational plans that have been put in place will mitigate the impact and improve the position of the group in the longer term,” Sapura said.

Net profit for the six-month period ended July 31, 2017 was down to RM54.46 million, compared with RM222.58 million for the same period in the preceding year.

Revenue was down 5% for the period to RM3.43 billion, compared with RM 3.62 billion for the period ended July 31, 2016. Its current order book stands at RM15.1 billion, while current cash and bank balance stands at RM2.2 billion.

Sapura Energy’s share price declined 10 sen to RM1.61, with some 44.59 million shares changing hands yesterday. The company has a market capitalisation of RM9.65 billion.