KUALA LUMPUR (June 26): Sapura Energy Bhd’s net profit for the first quarter ended April 30, 2023 (1QFY2023) surged 58.9% to RM146 million from RM91.93 million for the same period last year on the back of lower depreciation, higher share of profit from associates and foreign exchange gains arising from the appreciation of the US dollar against the ringgit.

The financially distressed oil and gas (O&G) player swung into the black from a net loss of RM3.3 billion in the preceeding quarter.

Quarterly revenue rose 7.41% to RM951.73 million from RM886 million in the same period last year due to higher rig utilisation days from the drilling segment and increased project activities for the operation and maintenance (O&M) segment. Earnings per share for the quarter improved to 0.91 sen per share, from 0.58 sen per share before, the O&G service provider said in a bourse filing.

On a quarterly basis, Sapura said its net loss of RM3.3 billion in 4QFY2022 was mainly due to a provision for impairment on goodwill on consolidation of RM1.46 billion and provision for impairment on property, plant and equipment of RM1.16 billion.

Quarter-on-quarter, revenue fell 21.8% from RM1.22 billion in 4QFY2022 on lower revenues from the drilling and engineering and construction (E&C) segments, attributable to lower rig utilisation days in the quarter under review and lower approved claims respectively.

Touching on its prospects, Sapura Energy said that the group, along with its subsidiaries, will continue to implement its reset plan throughout FY2024 to enhance profitability and cash flows, ensure discipline and excellence in bidding and project execution and address its unsustainable debt. “FY2024 holds significant importance for the group as it strives to address its unsustainable debt, outstanding amounts owed to trade creditors, and its Practice Note 17 (PN17) status."

Sapura Energy said that it is making progress towards finalising its proposed restructuring scheme (PRS) and regularisation plan, with an extension of time granted for the regularisation plan until Nov 30, 2023, and for the restraining orders until March 10, 2024.

“These extensions will enable the group to finalise its PRS and regularisation plan that will be fair and equitable to all stakeholders,” it said.

In a statement, Sapura Energy said that the proposed restructuring schemes will include a potential financial investment from a white knight of approximately RM1.8 billion, which would support the goup's goal to preserve the industry ecosystem.

"Meanwhile, Sapura [Energy] has validated approximately RM1.5 billion in claims from about 2,000 vendors through its proof of debt exercise involving trade creditors. The adjudication phase is almost complete, with only eight claims still being processed," it added.

Shares in Sapura Energy closed half a sen or 12.5% lower to 3.5 sen on Monday (June 26), giving the group a market capitalisation of RM559.27 million.