KUALA LUMPUR (June 27): Sapura Energy Bhd has narrowed its net loss in the first quarter ended April 30, 2019 (1QFY20) to RM109.1 million from RM135.73 million a year ago, as it benefited from savings in finance costs after it repaid borrowings following the completion of certain corporate exercises it undertook — as well as higher revenue.

In a statement, the group said the savings came from repaying RM7.2 billion of borrowings, following a rights issue and the establishment of its partnership with Austria's OMV Aktiengesellschaft, which took up a 50% stake in SapuraOMV Sdn Bhd, a joint venture company that was incorporated to hold the entire equity interest of Sapura Energy's Sapura Upstream Sdn Bhd and its subsidiaries.

This trimmed its net debt-to-equity retreated to 0.66 times from 1.73 times as at the end-October 2018.

Meanwhile, the group’s quarterly revenue shot up 93% to RM1.63 billion from RM845.17 million previously, supported by strong growth in its Engineering & Construction (E&C) and Drilling segments.

Segmentally, the group noted that its E&C segment returned to profitability on a revenue of RM1.4 billion which was RM737.2 million higher than the revenue of RM665.6 million in 1QFY19, thanks to increasing work volumes. Operating profit for the segment rose 32% to RM48 million from RM36.5 million previously.

The drilling segment, meanwhile, saw operating loss shrinking 25.9% y-o-y to RM50.9 million from RM68.7 million as it recorded a 25.6% rise in revenue to RM230.4 million from RM183.4 million, due to an increase in the number of working rigs.

The outlook for drilling is expected to improve as the number of operating rigs rises from five this quarter to seven by the second half of FY20, the group said.

In the same statement, Sapura Energy's president and group chief executive officer Tan Sri Shahril Shamsuddin said the group is "pleased that the corporate exercises we undertook have materialised, bringing positive effects to the group’s financials”.

“The operating environment will continue to be challenging; nevertheless, our focus remains resolute. We will persevere in building a resilient balance sheet, optimising our resources and assets, and targeting growth through order book expansion as well as safe and efficient project execution. We have continued to make good progress in delivering on our strategy,” Shahril added.

Going forward, the group said it has secured various contract wins which is expected to increase its asset utilisation and further contribute to improving its financial performance. Its order book for the current quarter is at RM17.3 billion, with cumulative new contract wins to-date of approximately RM2.3 billion.

Sapura Energy shares closed two sen or 6.35% lower at 29.5 sen, having been the most actively traded counter today with 148.72 million shares done. It has a market capitalisation of RM4.7 billion.