KUALA LUMPUR: Sapura Energy Bhd says it continues to show resilience in its second quarter of financial year 2025 (Q2FY2025) despite challenging external factors.
The company posted a 5.8 per cent increase in revenue year-on-year to RM1.2 billion, up from RM1.14 billion in Q2FY2024.
Sapura Energy group chief executive officer Datuk Mohd Anuar Taib said it had shown tenacity despite challenging conditions.
"This reflects our underlying operational strength and capacity to deliver results under adverse circumstances. While we accelerate efforts to successfully implement our Reset Plan, we remain equally committed to exploring growth opportunities to ensure long-term sustainability of the group," Anuar said in a statement today.
Sapura Energy generated RM275 million free cash flow in the first half of FY25, reflecting steady operational performance across all key segments.
Its earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter reached RM241 million, representing a margin of 20 per cent.
All business segments posted positive Ebitda with engineering and construction (E&C) contributing RM199 million, drilling RM138 million, and operation and maintenance (O&M) RM35 million.
The company, however, reported a loss after tax and minority interests of RM5 million in Q2FY2025, compared to RM43 million of profit after tax and minority interest in the corresponding quarter of the previous year.
Foreign exchange losses totalling RM101 million, primarily due to the depreciation of the US dollar against the ringgit, weighed heavily on the company's results.
Excluding the effect of foreign exchange losses, its Q2FY2025 adjusted net profit was RM96 million.
"With the strengthening of the ringgit, we will likely see further impact of foreign exchange volatility in the coming quarters," Anuar said.
"At the operational level, the group generally maintains a natural hedge against foreign currency exposure. However, at the corporate level we anticipate unrealised foreign exchange losses from existing multi-currency financing facilities, which highlights the essential need to restructure our debt portfolio to mitigate such risks."
Anuar addex that it actively collaborating with lenders and creditors to expedite this restructuring process to ensure greater stability in the future.
Sapura Energy said its order book growth was constrained by limited access to working capital and bank guarantee facilities, impacting its ability to secure two major contracts worth around RM4.5 billion.
Nevertheless, it sustained an orderbook of RM5.9 billion, with its joint ventures holding an additional RM6.1 billion.
The company said it remains strategically committed to Energy Transition, with majority of its current projects centred on gas development and decommissioning across all business segments.
E&C recently completed several key projects, including offshore transportation and installation works for an LNG development in Congo, a brownfield gas development project in Peninsular Malaysia, plus decommissioning projects in Thailand, New Zealand, and Australia.
O&M commenced two long-term contracts for subsea inspection, repairs and maintenance at oil and gas fields in Malaysia for Petronas.
O&M was also recently awarded a hook-up and commissioning contract for another gas development in Thailand.
Meanwhile, the drilling segment has nine tender assist drilling rigs working at mostly gas fields in Southeast Asia and West Africa, operating at about 97 per cent technical uptime.
Progress in Reset Plan
Sapura Energy said it is making good progress in the divestment of its 50 per cent equity in SapuraOMV Upstream Sdn Bhd to TotalEnergiesHoldings SAS, which is expected to close by next year.
The portfolio rationalisation is a major step towards addressing the company's unsustainable debt and outstanding payables, while enabling it to maintain a sharp focus on its core capabilities in energy solutions.
"As previously announced, the High Court of Malaya on June 6, 2024 granted Sapura Energy and certain of its wholly owned subsidiaries an extension of the Convening and Restraining Orders for a period of nine months until March 10 2025.
"Following this, the Corporate Debt Restructuring Committee extended the standstill period for the Company and its relevant subsidiaries, up to 10 March 2025."
The company is currently drafting a proposed restructuring scheme (PRS) which will be voted upon by creditors during a court-convened meeting.
Anuar acknowledged the prolonged debt restructuring process, while assuring creditors that reaching a resolution remains the company's topmost priority.
"We are diligently working on a comprehensive PRS together with the lenders and creditors. There are still a few moving parts that need to be ironed out.
"Our primary concern is to present a fair and equitable proposal that takes into account all stakeholders, particularly the small and medium Malaysian vendors who continue to support us throughout the turnaround effort," he added.