Date: 28.09.2018.

Kuala Lumpur, 28 September 2018

  • Summary of Q2 FY2019 financial results:
    • Revenue of RM1.3 billion
    • Loss-before-tax of RM80 million
    • Current cash and cash equivalents of RM1.0 billion
  • New contract wins of RM5.3 billion year-to-date; actively venturing into a larger addressable market in key regions
  • Sapura Energy remains committed to reduce its borrowings
  • Pushing ahead with growth – supported by the strongest balance sheet since inception through recent strategic initiatives:
    • Undertaking of a RM4 billion rights issue that has received support from three major shareholders to-date
    • Forming a strategic partnership with OMV AG for its upstream business

Sapura Energy Berhad (“Sapura Energy” or “the Group”) today announced its financial results for the period ended 31 July 2018, registering an increase in revenue at RM1.3 billion for Q2 FY2019 compared to the immediate preceding quarter (Q1 FY2019) at RM1.1 billion. The Group recorded a loss-before-tax of RM80 million for Q2 FY2019, compared to a loss-before-tax of RM108 million in Q1 FY2019.

In the first six months of FY2019, the Group posted RM2.3 billion in revenue, compared to RM3.4 billion in the corresponding period of FY2018. The drop in the revenue was mainly due to lower activities and asset utilisation in the Services segment. The revenue for Exploration and Production has shown an improvement as a result of higher lifting and average realised oil and gas price achieved in the current period. These factors led to a loss-before-tax of RM188 million for the first six months of the financial year.

The second quarter results are in line with the Group’s expectations. The recently awarded contracts are in the early stages of execution. In addition, the Group’s main vessels are in between projects as they are being mobilised for the new work.

As these projects move from the engineering and procurement phase to fabrication and offshore construction, the Group expects to see an increase in the utilisation of assets. This will in turn drive improvements in revenue and margins for the Group.

The sustained high oil price is encouraging recovery in investments which is driving increased activities. The Group is actively venturing into a larger addressable market in key regions including the Middle East, Africa, Latin America, Caspian and Mediterranean as well as Southeast Asia and Australia. To-date, the Group has secured contract wins of RM5.3 billion.

The new contracts across its Engineering and Construction as well as Drilling businesses have resulted in the Group’s orderbook increasing to RM16.9 billion. The growing orderbook provides long-term visibility of the Group’s future that will translate into higher utilisation of the Group’s assets and an increase in revenue.

Pushing ahead with growth

The Group reported that the exclusive negotiations with OMV AG to form a 50:50 partnership with Sapura Energy’s Upstream business is progressing towards completion. The strategic partnership has provided the Group with certainty in timing and valuation.

Sapura Energy will gain a strong partner for its upstream ventures to extend its global reach and deepen opportunities for its Services segment. The partnership will enhance the sharing of technology, knowledge and enable development of local talent.

To support its continued growth momentum, the Group has proposed a RM4 billion rights issue as part of its broader strategic plan to boost its financial position. The rights issue has received support from three major shareholders to-date, Permodalan Nasional Berhad (“PNB”), Kumpulan Wang Persaraan (“KWAP”) and Sapura Technology Sdn Bhd (“Sapura Technology”).

PNB and its associated funds (“PNB Group”) will subscribe to their full entitlement rights shares with warrants, and excess shares with warrants not taken up. This will result in the PNB Group having shareholdings of 40 per cent of the post-rights enlarged share capital. In addition, the PNB Group will subscribe in full to the RCPS-i of RM1 billion. The PNB Group may emerge as the largest single shareholder.

Meanwhile, KWAP has indicated that it will subscribe to its full entitlement and Sapura Technology will subscribe to the rights issue for a minimum amount of RM300 million.

Upon completion of the corporate exercises, Sapura Energy will be on a stronger footing to continue its growth momentum and bring greater shareholder value.