KUALA LUMPUR (Sept 18): Sapura Energy Bhd posted a net profit of RM23.7 million for the second financial quarter ended July 31, 2020 (2QFY21), an increase of 67% from RM14.21 million in the immediate preceding quarter.

Quarterly revenue, however, was lower at RM1.22 billion compared with RM1.35 billion in 1QFY21.

This is the second consecutive quarter of net profit for the oil and gas (O&G) group, thanks to improved operating metrics from its engineering and construction (E&C) division.

In contrast, Sapura Energy posted a net loss of RM116.3 million a year ago on revenue of RM1.93 billion.

In a statement today, the group said the results demonstrated the group's firm commitment to turning around its operations, and its resilience in navigating the impact of the ongoing slowdown in the O&G industry.

It noted that the government's Movement Control Order had reduced activities for Sapura Energy's E&C and drilling divisions, which impacted the group's revenue during the quarter.

For the first six months ended July 31, it reported a cumulative net profit of RM37.95 million versus a net loss of RM225.41 million, on the back of revenue of RM2.58 billion versus RM3.56 billion a year ago.

Sapura Energy said its fundamental strength in withstanding the cyclical nature of the industry helped the group remain agile in difficult operating conditions.

"We have identified cost optimisation initiatives valued at about RM1.1 billion being executed over the next 12 months.

"Approximately RM450 million worth of initiatives have been fully implemented to date, including [operational] productivity improvement and capex optimisation, a group-wide salary reduction exercise, and an extensive review of commercial opportunities within existing contracts," said Sapura Energy president and group chief executive officer Tan Sri Shahril Shamsuddin.

Currently, the group's order book stands at RM13.3 billion, with RM1.6 billion in cumulative year-to-date new contract wins.

It added that despite some delay in project sanctions by potential clients, Sapura Energy's current tender book has grown by 25% compared with 1QFY21, with tenders valued at RM29.4 billion submitted and in progress.

It said the group will continue to focus on safe and efficient operations across its business segments, deliver its cost optimisation targets and improve financial strength; and be well positioned to capture opportunities as the market recovers.

Shares in Sapura Energy closed 0.5 sen or 4.17% lower to 11.5 sen, for a market capitalisation of RM1.76 billion.