KUALA LUMPUR (March 27): Sapura Energy Bhd (KL:SAPNRG) posted a net profit of RM405.68 million for its fourth quarter compared to a net loss of RM728.44 million a year earlier, helping the troubled oil and gas services group return to profitability for the full year.

The profit for the fourth quarter ended Jan 31, 2025 (4QFY2025) was primarily driven by a RM792.1 million gain from the divestment of its 50% stake in SapuraOMV Upstream Sdn Bhd to TotalEnergies Holdings SAS, completed in December last year, according to the Practice Note 17 (PN17) group's bourse filing on Thursday.

Additionally, the operations and maintenance (O&M) segment delivered an improved performance, contributing RM19.2 million in earnings. The group also benefitted from favourable claim settlements.

However, earnings were partially offset by higher impairment charges on goodwill and property, plant, and equipment recorded during the quarter, said Sapura Energy.

Quarterly revenue rose 6% year-on-year to RM1.2 billion from RM1.12 billion, primarily driven by higher project activity in the O&M segment. This was partially offset by a decline in the drilling segment due to lower rig utilisation.

For the full year, Sapura Energy recorded a net profit of RM189.5 million, reversing a net loss of RM508.7 million in FY2024, while revenue increased nearly 9% to RM4.7 billion from RM4.32 billion.

As of end-January 2025, the group’s total borrowings stood at RM10.8 billion, while cash and cash equivalents rose to RM4.63 billion from RM1.45 billion a year ago.

“We are thankful to be back in the black after several challenging years,” said Sapura Energy group CEO Muhammad Zamri Jusoh. “Implementing the reset plan was an arduous task, but I am confident the worst is over for Sapura Energy. Nevertheless, we still have a few more corners to turn before we see our PN17 exit.”

The reset plan refers to Sapura Energy’s proposed debt restructuring initiative, focusing on reducing debt, settling overdue claims, improving project bidding and delivery by managing risks, and strengthening financial discipline for long-term stability.

According to the group, the reset plan made good progress in FY2025, with the majority of its multi-currency financing financiers approving the proposed restructuring scheme.

Scheme creditors also in February approved the composite scheme of arrangement, later sanctioned by the High Court, which will facilitate the settlement of overdue vendor payments and the restructuring of multi-currency debt, it noted.

Additionally, Sapura Energy recently secured a conditional funding agreement from Malaysia Development Holding Sdn Bhd, a special-purpose vehicle under the Minister of Finance, for the subscription of up to RM1.1 billion in redeemable convertible loan stocks (RCLS).

The RCLS, collateralised with key assets in the engineering and construction (E&C) and O&M segments, will be exclusively used to settle payments to Malaysian vendors in the oil and gas sector, the company added.

Looking ahead, Sapura Energy said it is well-positioned to sustain its recovery momentum, with its order book standing at RM8.5 billion as of end-January 2025, the highest level in recent years.

Its joint ventures and associate entities hold an additional RM5.5 billion in order book value.

Following the court's approval of its composite scheme of arrangement, the group is finalising its regularisation plan.

“Our aim is to rebuild Sapura Energy as a long-term partner in the oil and gas industry, supporting the nation’s energy security and economic growth,” Muhammad Zamri added.