Sapura Energy reset plan gains traction, incurs smaller losses

KUALA LUMPUR: Sapura Energy Bhd’s reset plan appears to be gaining traction, with its operations showing marked improvement in the high energy price environment despite the group returning to the red in the second quarter (2Q) ended July 31.

“We are encouraged by our financial performance this quarter, as it indicates early results in our reset plan and we are on the mend.

“Clearly, the game-changer in our future growth is the reduction of unsustainable debt, which we are working hard to resolve with all the stakeholders,” said group CEO Datuk Mohd Anuar Taib in a statement.

As part of its portfolio rationalisation, Sapura Energy said in a statement yesterday that it had recently completed the divestment of its heavy lift pipe-laying vessel Sapura 3000 and entered into a memorandum of agreement for the disposal of three drilling rigs.

It is also making progress with its proposed scheme of arrangement. It is now completing the verification of claims submitted by its creditors under the proof of debt exercise.

The group said its reset plan aims to create long-term sustainability by rebuilding its balance sheet, enhancing its operational and risk management framework, and charting future business direction.

Sapura Energy’s order book to-date stands at Rm7.7bil.

For its 2Q, Sapura Energy recorded a positive earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rm313mil on the back of Rm1.17bil in revenue.

The group posted a narrower net loss of Rm2.59mil in the period as compared to the Rm1.52bil net loss registered for the same corresponding quarter a year ago.

The improved 2Q Ebitda performance was mainly attributable to commercial settlements from certain contracts in its engineering and construction segment, materialisation of additional claims in the operations and maintenance segment and the improved rig utilisation and day rates in its drilling business segment.

“The group’s engineering and construction business segment continues to be under challenge by the current operating landscape,” it said.

The net loss of Rm2.6mil for the quarter was due to a well write-off and impairment recognised by its exploration and production strategic partnership called Sapuraomv Upstream.

In the preceding 1Q, Sapura Energy posted a net profit of Rm92mil and an Ebitda profit of Rm250mil on revenue of Rm886mil.