KUALA LUMPUR (April 27): Sapura Energy Bhd’s three consecutive quarters of profitability was snapped in the fourth quarter ended Jan 31, 2021 (4QFY21), with a net loss of RM216.03 million caused by weak engineering and construction (E&C) margins and higher operating expenses.
The swing into the red from net profit of RM17.21 million in 3QFY21 was despite revenue rising 8.7% q-o-q to RM1.44 billion from RM1.33 billion – also due to higher revenue from the E&C segment, as well as its drilling business.
“During the quarter, the E&C segment sustained additional costs brought about by Covid-19 and by working through the monsoon season,” Sapura Energy said in a statement.
The latest results translated to losses per share of 1.35 sen, from earnings per share of 0.11 sen in 3QFY21.
Year-on-year (y-o-y) however, the net loss of RM216.03 million is considerably lower than RM4.23 billion net loss in 4QFY20, when the group was operating at a loss and incurred over RM3 billion in impairments. It booked 26.51 sen in losses per share at the time. Revenue rose 29.8% from RM1.11 billion in 4QFY20.
The latest quarter performance caused Sapura Energy to book its second consecutive year in the red at RM160.87 million or 1.01 sen per share – although much lower than RM4.56 billion or 28.6 sen per share in FY20.
Sapura Energy said that in the year, the group presented “a clear turnaround” in performance, having booked earnings before interest, tax, depreciation and amortisation of RM809.3 million, from loss of RM252.2 million in FY20.
This was despite revenue retreating 17.1% to RM5.35 billion, from RM6.45 billion, amid lower E&C and drilling revenue, in line with project progress and lower effective day rates due to Covid-19 lockdowns.
“The financial impact of the pandemic on the Group is estimated to be about RM286 million, while working during inclement weather cost the Group an additional RM303 million,” Sapura Energy said.
“The estimate includes supplementary expenses due to supply chain delays, quarantine restrictions on crew and vessels, mobilization costs and regular Covid-19 testing on employees at all workplaces, onshore and offshore.
“To date the entire Covid-19 costs, and RM149 million in weather-related costs, remain unrecovered. The group will be working with clients to acknowledge and resolve these costs in the current financial year,” it added.
On prospects, Sapura Energy said it has secured about 80% of its revenue projection for FY2022, with the current orderbook at RM13.7 billion after including today’s announcement of RM1 billion in new contracts.
“The Group also made good progress in its Acceleration Program, a comprehensive optimisation plan for lean and efficient operations, launched in 2019,” it said.
“The company is executing about 270 initiatives, valued at RM1.3 billion, of which approximately RM760 million has been implemented to date, with RM430 million realised,” it added.
Shares of Sapura Energy closed unchanged at 13 sen today, valuing the integrated upstream O&G firm at RM2 billion.
