Sa­pura En­ergy loss nar­rows

Higher rev­enue and forex gain help third-quar­ter re­sults

The Star Malaysia - StarBiz - - News - By GANESHWARAN KANA [email protected]­tar.com.my

PE­TAL­ING JAYA: Sa­pura En­ergy Bhd nar­rowed its net loss by over 88% in the third quar­ter ended Oct 31, led by higher top line and a net for­eign exchange gain of RM56.16mil.

How­ever, the in­te­grated oil and gas (O&G) ser­vices provider con­tin­ued its los­ing streak for the fifth con­sec­u­tive quar­ter as it booked a net loss of RM31.09mil. For com­par­i­son, the group recorded a net loss of RM274.41mil in the pre­vi­ous year’s cor­re­spond­ing quar­ter.

Sa­pura En­ergy’s rev­enue in the three-month pe­riod rose by 17.36% year-on-year (y-o-y) to RM1.5bil, mainly at­trib­ut­able to the higher rev­enue con­tri­bu­tion from the en­gi­neer­ing and con­struc­tion (E&C) as well as the ex­plo­ration and pro­duc­tion busi­ness seg­ments.

The group did not de­clare any div­i­dend for the quar­ter in re­view. Loss per share was 0.52 sen.

Ac­cord­ing to pres­i­dent and group chief ex­ec­u­tive of­fi­cer Tan Sri Shahril Sham­sud­din, Sa­pura En­ergy has been see­ing an up­ward trend in all busi­ness seg­ments, par­tic­u­larly the E&C di­vi­sion, driven by an in­crease in global in­vest­ments and ac­tiv­i­ties.

“As our or­der book grows, rev­enue will move up in tan­dem with project com­ple­tion from com­mence­ment to book recog­ni­tion,” he said.

Cu­mu­la­tively, for the first nine months of fi­nan­cial year 2019, Sa­pura En­ergy saw an in­crease in net loss to RM292.88mil, up from RM217.95mil a year ear­lier.

The bot­tom line took a hit af­ter the group’s rev­enue fell by al­most 19% y-o-y to RM3.82bil. This was pri­mar­ily due to lower rev­enue from the E&C and drilling busi­ness seg­ments.

Com­ment­ing on its prospects, Sa­pura En­ergy said the O&G in­dus­try’s ris­ing cap­i­tal spend­ing and the resur­gence in ac­tiv­i­ties are ex­pect- ed to fuel the group’s growth mov­ing for­ward.

“With the in­creas­ing ac­tiv­i­ties, stronger bal­ance sheet and en­cour­ag­ing po­ten­tial growth prospects, the board is op­ti­mistic that the group will con­tinue to im­prove its per­for­mance,” it said.

Mean­while, in a sep­a­rate Bursa Malaysia fil­ing, it was an­nounced that Sa­pura En­ergy and its con­sor­tium part­ner had bagged a RM3­bil con­tract from In­dia’s state-owned Oil and Nat­u­ral Gas Corp (ONGC) to build an off­shore process platform on the east coast of In­dia.

Sa­pura En­ergy said its wholly-owned unit Sa­pura Fab­ri­ca­tion Sdn Bhd will un­der­take the en­gi­neer­ing, pro­cure­ment, con­struc­tion, in­stal­la­tion and com­mis­sion­ing works to­gether with its con­sor­tium part­ner, Af­cons In­fra­struc­ture Ltd, for the devel­op­ment of the KG-DWN 98/2 NELP block.

Af­cons is the con­struc­tion arm of the In­dian con­glom­er­ate Shapoorji Pal­lonji Group.

Based on Sa­pura Fab­ri­ca­tion’s 48.33% stake in the con­sor­tium, the deal is ex­pected to trans­late to RM1.47bil in con­tract value. The group ex­pected works to be com­pleted by Jan­uary 2021.

“The con­tract an­nounced herein will have no ef­fect on the is­sued cap­i­tal of the com­pany and is ex­pected to con­trib­ute pos­i­tively to­wards the earn­ings of Sa­pura En­ergy for the fi­nan­cial year end­ing Jan 31, 2019, and for the fi­nan­cial pe­riod there­after within the du­ra­tion of the con­tract.

“The new con­tract win en­hances the com­pany’s pres­ence in the grow­ing mar­ket and Sa­pura En­ergy is pleased to con­tinue its con­tri­bu­tion to In­dia’s O&G in­dus­try and in help­ing to meet the coun­try’s in­creas­ing en­ergy de­mand.

“The project is an op­por­tu­nity for Sa­pura En­ergy to par­tic­i­pate in a key devel­op­ment for ONGC, lev­er­ag­ing on the com­pany’s es­tab­lished deep­wa­ter knowl­edge and ca­pa­bil­i­ties,” the group said.

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