PETALING JAYA: Sapura Energy Berhad and its group of companies recorded positive financial results in the first quarter of financial year 2024 (Q1 FY2024), posting Group profit after tax and minority interests (PATAMI) of RM146 million, a 58% increase from the RM92 million it posted in the first quarter of financial year 2023 (Q1 FY2023).
The PATAMI was achieved on the back of RM952 million in revenue, a moderate increase from the RM886 million revenue garnered in Q1 FY2023. The Group reported a 30% improvement in earnings before interest, taxes, depreciation, and amortisation (EBITDA) at RM332 million for Q1 FY2024, compared to the RM250 million EBITDA reported in the corresponding quarter of the previous financial year.
“The results are rooted in our resilience and determination to turn around the company, despite our status as a Practice Note 17 issuer with limited access to working capital and bank guarantees”, said Sapura Energy Group CEO Datuk Mohd Anuar Taib.
All business segments operated by Sapura Energy posted encouraging EBITDAs with Engineering & Construction (E&C) delivering RM46 million; Operations & Maintenance (O&M) at RM7 million; and Drilling posting RM130 million.
PATAMI in Q1 FY2024 was primarily driven by the combined efforts of all business segments, which materialised through higher EBITDA arising from revenue recognised from new and ongoing projects, and favourable foreign exchange gains following the strengthening of the U.S dollar.
Group revenue saw a boost due to several factors, including the commencement of a major E&C project in Congo and the steady income generated from the nearly full utilisation of its fleet of drilling rigs.
“Our strategy to deploy key assets beyond Malaysian borders, augments our ability to secure work and complete projects for international clients. This strategy has enabled the Group to export its expertise and bring back revenues earned in US dollars to our shores,” added Anuar.
Nearly 70% of its Q1 FY2024 revenue was generated from the Group’s international operations. As much as RM748 million in external revenue were denominated or earned in U.S. dollars, indirectly benefitting the nation’s economy.
Sapura Energy intends to sustain this momentum, with terms and risk levels acceptable to the Group. This is evidenced by its bid book, which primarily consists of international projects. Approximately 90% of its bidding activities are currently directed towards opportunities outside Malaysia.
Sapura Energy's strategic decision to deploy key assets outside of Malaysia and concentrate on regions where it holds a strong competitive advantage has yielded commendable results. Despite facing financial constraints, the Group was able to secure several new international wins thanks to the strong partnerships it has cultivated with both new and existing clients.
Sapura Energy recently disclosed that its E&C, O&M, and Drilling business segments secured contract awards in the Eastern and Western Hemispheres with a combined value of about RM1.4 billion, increasing its outstanding order book to RM5.8 billion. More than 70% of the combined contract values are from projects outside Malaysia, indicating a growth trajectory beyond its home base.
Of the RM 979 million new wins in the E&C segment, 58% are transportation and installation projects in the Western Hemisphere. In the Drilling segment, 10 out of 11 rigs are operational, with seven rigs operating internationally and three in Malaysia. Drilling is anticipated to reach full utilisation by the end of the second quarter of financial year 2024. The Group’s O&M business segment aims to establish its position as a regional player in the South-East Asian and Middle East markets with the inclusion of underwater inspection and repair & maintenance as part of its service offerings.
The Group is determined to continue maximising its assets and capabilities both in the Eastern and Western Hemispheres, whilst enhancing its service offerings to include decommissioning capabilities, through collaborations and shared technical expertise.
Sapura Energy remains on track with the implementation of its Reset plan, which includes efforts to address its unsustainable debt and outstanding amounts owed to trade creditors. The company is committed to regularising its financial position, ultimately emerging from its status as a Practice Note 17 (PN17) company.
