Date: 25.03.2024.

Kuala Lumpur, 25 March 2024

Summary of FY2024 financial results:

  • Progress achieved in restructuring exercise, including Approval-in-Principle (AIP)
  • Revenue of RM4.26 billion
  • EBITDA of RM473 million
  • Order book at RM5 billion
  • LATAMI of RM509 million
  • Free Cash Flow of RM614 million

Sapura Energy Berhad ("Sapura Energy") and its Group of Companies ("the Group") today announced unaudited preliminary full year results for the financial year ended 31 January 2024 ("FY2024"), reflecting a year of operational resilience amidst challenges.

The Group recorded earnings before interest, tax, depreciation, and amortization ("EBITDA") of RM473 million in FY2024, on the back of RM4.26 billion in revenue. A challenging fourth quarter in FY2024, following three profitable quarters earlier, resulted in a loss after tax and minority interest (LATAMI) of RM509 million for the year, improved from the LATAMI of RM3.16 billion in the last financial year ("FY2023").

"While we have made progress, we are not yet out of the woods. The Reset plan is very complex, and there remains a lot of hard work ahead of us before we achieve long-term financial and operational stability," said Sapura Energy Chairman Dato Mohammad Azlan Abdullah. "The progress we have made so far demonstrates our determination and resilience in navigating through those complexities to secure a sustainable future for Sapura Energy and its stakeholders."

Steady progress in debt restructuring exercise

As part of its Reset plan to achieve long-term sustainability, the Group has been actively pursuing debt restructuring, which saw significant milestones achieved in FY2024.

This includes receiving a confirmation from the Corporate Debt Restructuring Committee ("CDRC") that Approval-In-Principle ("AIP") for its Proposed Restructuring Scheme ("PRS") has been obtained from the majority of the financiers of the Group’s Multi-Currency Financing Facilities. This crucial step is part of the Group's efforts to restructure its debt burden to a sustainable level.

Additionally, the High Court granted Sapura Energy Berhad and 22 of its subsidiaries new Convening and Restraining Orders on 7 March 2024, facilitating the finalisation of the PRS ahead of court convened meetings with creditors.

In parallel, and as part of the Group’s PRS, the divestment of SapuraOMV Upstream ("SOMV") is on target for completion.

Challenging operating conditions impact performance

The operating conditions for the Group’s Engineering & Construction ("E&C") and Operations and Maintenance ("O&M") business segments continued to be adversely affected by the lack of access to working capital and bank guarantee facilities. This is further exacerbated by project execution challenges for projects in Malaysia and West Africa, which have been operationally completed. Sapura Energy is proactively pursuing contractual resolutions with the respective clients.

Meanwhile, the Drilling business segment generated a robust EBITDA of RM484 million, following outstanding operational performance and favourable market conditions.

"Despite operating difficulties, the Group continued to deliver its promises to clients, safely completing more than 20 major projects and eight drilling campaigns in FY2024," said Sapura Energy Group Chief Executive Officer Datuk Mohd Anuar Taib. "We are grateful to the clients, partners and vendors who stood by us during the challenging year."

Sapura Energy recently delivered the KG-DWN-98/2 Central Processing Platform for India's Oil and Natural Gas Corporation, a significant component in India's energy security strategy.

Despite delays caused by the COVID-19 pandemic and other challenges, the facility was completed through the client’s collaborative support. In another notable project, Sapura Energy Australia completed the final phase of decommissioning works at the Tui block in New Zealand, accomplishing the task safely and ahead of schedule.

Cautiously optimistic and focused on completing restructuring milestones in FY2025

Looking ahead, Sapura Energy remains cautiously optimistic about its business prospects in FY2025. "The Group is committed to its operational turnaround by focusing on efficiency improvements, enhancing client relationships, and fostering greater collaboration with clients, partners and vendors," said Datuk Anuar. "Despite the challenges posed by the ongoing restructuring process, we are determined to progress our Reset milestones and further solidify Sapura Energy’s market position."

The Group's orderbook currently stands at at RM5 billion, while the orderbook held by the Group's joint venture and associate entities currently stands at RM3 billion. Its E&C and O&M segments are actively pursuing several prospects, focusing on fabrication, transportation & installation, and subsea inspection, repair & maintenance. The Group will also explore opportunities in Energy Transition projects, including offshore decommissioning. Its subsidiary Peritus International was recently awarded the front-end engineering and design of a 200 km trunkline in the Aramis project, a high-priority initiative for reducing carbon emission through an interconnected energy system infrastructure in the European Union. Kitar Solutions, a strategic partnership with Norway’s AF Offshore Decom, will be bidding for decommissioning projects in the region by offering its integrated engineering, preparations, removal, and disposal solutions.

"In FY2024, we showed resilience and determination in overcoming challenges, to pave the way for growth," said Dato Mohammad Azlan. "In FY2025, we will need to sustain the momentum, by strengthening our core capabilities, developing Energy Transition solutions, and driving our Reset strategy for long-term value."

Cautionary note: "Sapura Energy", "the group" and "the company" are used for convenience where references are made to Sapura Energy Berhad in general. Similarly, words like "we", "us" and "our" are used to refer to Sapura Energy Berhad in general or to those who work for the company and its subsidiaries, where relevant. This press release may contain forward-looking statements. All statements other than statements of historical facts included in this press release, including, without limitation, those regarding our financial position, financial estimates, business strategies, prospects, plans and objectives for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Such forward-looking statements reflect our current view with respect to future events and are not a guarantee of future performance. Forward-looking statements can be identified by the use of forward-looking terminology such as the words "may", "will", "would", "could", "believe", "expect", "anticipate", "intend", "estimate", "aim", "plan", "forecast" or similar expressions and include all statements that are not historical facts.