Kuala Lumpur, 27 June 2024

Summary of Q1 FY2025 financial results: 

• Revenue of RM1.18 billion  

• EBITDA of RM147 million 

• EBITDA margin of 13 percent 

• PATAMI of RM82 million  

• Group order book of RM7.0 billion, and order book of joint ventures of RM7.1 billion  

• Free cash flow of RM132 million  

Sapura Energy Berhad (“Sapura Energy” or “the Company”) and its group of companies (“the Group”) began the financial year on a positive note, posting a Group profit after tax and minority interests of RM82 million in the first quarter of financial year 2025 (“Q1 FY2025”). This marks a reversal of the RM728 million loss after tax and minority interests (“LATAMI”) posted in the previous quarter ("Q4 FY2024”). Apart from the LATAMI in Q4 FY2024, Sapura Energy has been registering positive results for every quarter since the beginning of FY2024.   

The net gain was achieved on the back of RM1.18 billion in revenue, a slight improvement compared to the RM1.12 billion revenue recorded in Q4 FY2024. The Group also generated approximately RM132 million in free cash flows in Q1 FY2025. 

“The results show our people’s hard work in fixing some of the inconsistent performance in the past. It reflects our determination to turn around the company, despite our status as a Practice Note 17 issuer”, said Sapura Energy Group CEO Datuk Mohd Anuar Taib.

The Group’s earnings before interest, taxes, depreciation, and amortisation (“EBITDA”) for the quarter reached RM147 million, representing an EBITDA margin of 13 percent  

All operated business segments posted encouraging EBITDAs with Drilling posting RM79 million; Engineering & Construction (“E&C”) delivering RM54 million and Operations & Maintenance (“O&M”) at RM34 million.   

Earnings in Q1 FY2025 were primarily driven by improved performance, particularly in the E&C segment. The segment’s results benefited from approved variation orders, revenue recognised from completed and ongoing projects, cost reductions, and the reversal of contingency provisions. EBITDA in the O&M segment was bolstered by a commercial settlement. The Group’s Drilling business continued to generate steady income from near full utilisation of its fleet of drilling rigs.  

“Our strategy is to balance our income sources by focusing on both the Malaysian market and international projects. This approach has enabled us to deploy key strategic assets and expertise where it is most needed. It is part of our commitment to safely deliver solutions to clients and ultimately contribute to the provision of affordable energy to communities worldwide,” added Datuk Mohd Anuar Taib. 

NEW CONTRACT WINS AND VENTURES INTO ENERGY TRANSITION 

While order book replenishment remains a challenge due to financial constraints, the Group continued to secure new contract awards, thanks to its capabilities and strong partnerships with peers and clients. As part of its effort to assist Energy Transition, Sapura Energy registered early forays into carbon capture, utilisation and storage (“CCUS”), while continuing to build a reputation for its decommissioning capabilities.  

The Group’s outstanding order book currently stands at RM7.0 billion, an improvement from the RM5 billion order book reported in Q4 FY2024. The unconsolidated order book held by Sapura Energy’s joint venture and associate entities doubled from the previous quarter, standing at RM7.1 billion, compared to RM3 billion previously.   

The order book included new wins by O&M’s Sapura Subsea Services Sdn. Bhd (“Sapura Subsea”), which was awarded the Provision of Pan Malaysia Underwater Services for PETRONAS Group of Companies and Production Arrangement Contractors. Under the umbrella agreement, Sapura Subsea has secured separate contracts with PTT Exploration and Production Public Company Limited (“PTTEP”) and Shell to provide diving support vessels, air and saturation diving systems, remotely operated vehicles, and related underwater services for both clients’ underwater facilities in Sabah and Sarawak. The contracts have a five-year tenure and are call-out in nature with agreed unit rates.  

In the Drilling segment, Sapura Drilling Asia Sdn Bhd (“Sapura Drilling Asia”) has been awarded new projects from PETRONAS Carigali for the provision of tender-assist drilling rig Sapura Esperanza and Sapura Alliance. The new projects will see Sapura Esperanza and Sapura Alliance deployed to various locations to perform different scopes of work ranging from drilling to workover and plug & abandonment. Sapura Drilling Asia has also won similar contracts from other independent producers in Malaysia, this year.  

Under the E&C business, Seagems Solutions Ltda was awarded contracts for its full fleet of six   multi-purpose Pipelay Support Vessels (“PLSVs”), as part of a competitive Petrobras tender process. Its scope of work includes the provision of subsea engineering, installation and other services, by utilising the PLSVs in the Brazilian waters. Formerly known as Sapura Navegacao Maritama, Seagems Solutions is owned by a joint-venture between Sapura Energy and Paratus Energy Services Ltd.  

Meanwhile, E&C’s wholly owned subsidiary Peritus International Ltd have also been awarded the front-end engineering and design of a 200-kilometre trunkline as part of the Aramis project, under a consortium led by Petrofac.  The Aramis project, a collaboration between TotalEnergies, Shell, Energie Beheer Nederland (“EBN”) and Gasunie, entails carbon capture and storage in the North Sea. It aims to make a significant contribution to the energy transition by reducing CO₂ emissions for the hard-to-abate industries in Europe. Peritus will contribute its offshore pipeline and subsea engineering expertise and previous experience with CO₂ pipeline systems in the North Sea to the project.   

Meanwhile, Kitar Solutions, a joint venture between Sapura Energy and Norway’s AF Offshore Decom, is strategically positioned to capitalize on the growing decommissioning market within the region. With aging oil and gas assets, Kitar Solutions aims to play a pivotal role in this sector, offering specialized solutions and expertise to address the challenges associated with decommissioning. Sapura Energy has an extensive experience list in decommissioning in the region, having delivered several projects in Malaysia, New Zealand, and Thailand. Most recently, our team in Sapura Energy Thailand completed two decommissioning projects in the kingdom's waters, having successfully dismantled and transported a total 25 offshore platforms, installed four reused topsides and pipelines, and removed about 37 kilometers of subsea pipeline. 

Looking ahead, Sapura Energy remains committed to bidding for projects both in the Malaysian and international markets. The company will continue to focus on its core capabilities while keeping a keen eye on opportunities arising from the Energy Transition.  

PROGRESS IN RESET PLAN 

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 regularizing its financial position, with the ultimate goal of declassifying itself as a Practice Note 17 ("PN17") company.  

As part of its portfolio rationalization, the Group recently announced it has entered into a conditional Sale and Purchase Agreement to divest its 50 percent equity interest in SapuraOMV Upstream Sdn Bhd to TotalEnergies Holdings SAS.   

On 6 June 2024, the High Court of Malaya granted Sapura Energy Berhad and certain of its wholly owned subsidiaries an extension of the Convening and Restraining Orders for a period of nine months till 10 March 2025. The Company also received a letter dated 7 June 2024 from the Corporate Debt Restructuring Committee (“CDRC”) stating that the CDRC had extended the standstill period for the Company and its relevant subsidiaries, up to 10 March 2025. 

These extensions are crucial for the Group to refine and finalise a fair and equitable proposed restructuring scheme and regularisation plan for its stakeholders.  

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.