KUALA LUMPUR (Dec 21): Sapura Energy Bhd posted a net profit of RM17.21 million for the third quarter ended Oct 31, 2020 (3QFY21) against a net loss of RM100.89 million a year ago, thanks to improved project margins from its engineering and construction (E&C) business, additional income from the previous disposal of a 50% stake in a subsidiary, and higher share of profit from its associates and joint ventures. No dividend was declared for the quarter.

This came despite a decline in revenue to RM1.33 billion from RM1.78 billion, as its E&C and drilling segment saw lower revenue, in line with the progress of projects being executed, and lower number of operating days for working rigs in 3QFY21, its stock exchange filing today showed.

The improved bottom line gave it earnings per share of 0.11 sen, versus a loss per share of 0.63 sen previously.

"In the current quarter, the group recorded a profit before taxation of RM59 million which was higher by RM172.2 million compared to loss before taxation of RM113.2 million in 3QFY20, primarily due to improvement in project margins from E&C business segment, net additional income from previous disposal of 50% equity stake in a subsidiary, higher share of profit from associates and joint ventures, [and] lower net finance cost, [which was] reduced by net foreign exchange loss as well as a provision for restructuring costs," it said.

On a quarter-on-quarter basis, the integrated oil and gas services provider's net profit is down 27.5% from RM23.74 million in 2QFY21, though revenue rose 9% from RM1.22 billion.

This is the third consecutive quarterly net profit for the company since 1QFY21, when it recorded a net profit of RM14.21 million on a revenue of RM1.36 billion.

As a result, the group achieved a cumulative net profit of RM55.16 million for the nine months ended Oct 31, 2020 (9MFY21), versus a net loss of RM326.3 million in the same period a year ago, though revenue sank to RM3.91 billion from RM5.34 billion.

Sapura Energy president and group chief executive officer Tan Sri Shahril Shamsuddin said the company managed to sustain profitability for 9MFY21 as the company pursued an agile strategy of utilising strategic assets to acquire capabilities across the value chain, expanding its global presence, and diversifying into adjacent markets. "The move steered us through the uncertainties of the energy industry," he added.

He also said the group now commands better earnings before interest, taxes, depreciation and amortisation margin of 19% for the 9MFY21 period, compared with 7% in 9MFY20.

The latest set of financials, he said, also demonstrated the group's firm commitment to turning around the company via a comprehensive optimisation plan to ensure lean and efficient operations began in FY20.

Meanwhile, Sapura Energy said the company and its financiers are finalising terms for a planned refinancing, as part of the group's capital management programme. It is confident the refinancing exercise will be completed as scheduled by January 2021.

The group also updated that its order book currently stands at RM12.5 billion, with RM2.2 billion in year-to-date contract wins. It has also tendered for RM38.8 billion worth of jobs.

Moving forward, encouraged by the gradual recovery in the energy industry, the group said it will continue to build top line growth through robust bidding activities in addressable markets and segments for hydrocarbons and renewable energy. On that note, the group is optimistic of its ability to navigate current uncertainties.

The trading of Sapura Energy's shares was suspended for an hour from 2.30pm to make way for the earnings announcement. On resumption of trading, it rose one sen or 4% to 13 sen at the time of writing, giving it a market capitalisation of RM2 billion. Among Bursa Malaysia's most actively traded for the day, it saw 187.94 million shares done.