Sapura Energy narrows net loss to RM508.66mil in FY24

KUALA LUMPUR: Despite making some headway in its “reset” plan, Sapura Energy Bhd chairman Datuk Mohamad Azlan Abdullah says the oil and gas services firm is not yet out of the woods.

“The reset plan is very complex, and there remains a lot of hard work ahead of us before we achieve long-term financial and operational stability,” he said in comments accompanying the financial results of the Practice Note 17 (PN17) company.

“The progress we have made so far demonstrates our determination and resilience in navigating through those complexities to secure a sustainable future for Sapura Energy and its stakeholders.”

In the fourth quarter ended Jan 31, 2024, Sapura Energy’s net loss narrowed to RM728.44mil from RM3.26bil in the same quarter in 2023.

Its basic loss per share dropped to 4.33 sen from 20.38 sen in the comparative quarter.

Group revenue, meanwhile, dipped to RM1.06bil from RM1.22bil in 4QFY24.

Over the entire financial year, its net loss was RM508.66mil against RM3.16bil in FY23 while revenue was slightly lower at RM4.26bil as compared to RM4.55bil in the previous year.

According to Mohammad Azlan, the operating conditions of the group’s engineering and construction (E&C) and operations and maintenance (O&M) business segments continued to be adversely affected by the lack of access to working capital and bank guarantee facilities.

This was further exacerbated by project execution challenges for projects in Malaysia and West Africa, which have been operationally completed. Sapura Energy is proactively pursuing contractual resolutions with the respective clients.

However, the drilling business generated earnings before interest tax, depreciation and amortisation (Ebitda) of RM484mil, due to storng operational performance and favourable market conditions.

Looking ahead, group CEO Datuk Mohd Anuar Taib said the group remains cautiously optimistic about its business prospects in FY25.

“The group is committed to its operational turnaround by focusing on efficiency improvements, enhancing client relationships, and fostering greater collaboration with clients, partners and vendors.

“Despite the challenges posed by the ongoing restructuring process, we are determined to progress our Reset milestones and further solidify Sapura Energy’s market position,” he said.

He added that the group’s order book stands at RM5bil while the order book held by the group’s joint venture and associate entities stands at RM3bil.