KUALA LUMPUR (Mar 24): SapuraKencana Petroleum Bhd reported a 62% fall in fourth quarter net profit from a year earlier as the firm registered higher depreciation and amortisation, besides foreign exchange losses.

In a statement to the exchange today, oil and gas support services provider SapuraKencana (fundamental: 1.3; valuation: 1.8) said provision for impaired receivables and properties also curbed profit growth as the firm contended with lower crude oil prices.

"The global oil and gas industry is experiencing difficult times," SapuraKencana said.

SapuraKencana said net profit fell to RM129.13 million in the fourth quarter ended Jan 31, 2015 (4QFY15) from RM337.23 million. Revenue was, however, higher at RM2.39 billion versus RM1.88 billion.

During 4QFY15, SapuraKencana said offshore construction and subsea service revenue fell 10.6% while drilling and energy services division's revenue rose 38.8%.

Meanwhile, income from fabrication, hook-up and commissioning operations was 51.5% higher.

SapuraKencana's income statement shows that depreciation and amortisation were significantly higher at RM476.27 million compared to RM182.78 million.

The company also reported a RM54.94 million provision for impaired oil and gas properties. There was no provision for these assets a year earlier.

For the full year, SapuraKencana's net profit rose to RM1.43 billion from RM1.09 billion a year earlier. Revenue was higher at RM9.94 billion versus RM8.38 billion.

Looking ahead, SapuraKencana said it foresaw "pressures in both revenues and margins" in anticipation of a challenging oil and gas industry.

The company said it would continue to focus on order book growth and operational efficiency to sustain profitability.

At 12:30pm, SapuraKencana shares settled flat at RM2.30 for a market capitalisation of RM13.78 billion.

The stock had fallen 1% this year, underperforming the FBM KLCI's 3% rise.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)