Sapura Energy, a Malaysian offshore and marine contractor, rig owner, and upstream player, reports sustained profitability despite facing multiple operational challenges. The positive financial performance is attributed to favorable foreign exchange differences, counterbalancing rising project and financing costs and limited access to bank guarantees and working capital.
Financial Constraints and Operational Excellence Focus
Sapura Energy acknowledges financial constraints affecting business performance, particularly in replenishing the order book. The company aims to address these limitations through a regularisation plan while emphasizing the need to enhance operational excellence to preserve project margins and achieve consistent results.
Confidence in Growth Prospects
Despite challenges, Sapura Energy expresses confidence in its growth prospects. The strategy involves rebalancing its global portfolio, deploying key assets competitively, and bidding strategically on major projects in Africa, the Mediterranean, the Atlantic, and the Asia Pacific regions. Trusted partnerships have facilitated success amid limited liquidity.
Order Book and Global Expansion
As of July 31, Sapura Energy’s order book stood at 5.4 billion ringgit ($1.16 billion), with over 70% outside of Malaysia. The company operates ten rigs under contract in Malaysia, Thailand, and Africa. Sapura Energy recently established a regional office in the UK to manage and pursue projects in West Africa and the Mediterranean.
Financial Results and Restructuring Efforts
Sapura Energy reported a profit after tax and minority interests of approximately 31 million ringgit in Q3 2024, marking the third consecutive profitable quarter. For the first nine months ending October 31, 2023, the group posted revenues of 3.2 billion ringgit, and the cumulative profit after tax and minority interests more than doubled to 220 million ringgit compared to the same period last year. The company continues to progress its restructuring plan, focusing on resolving unsustainable debt levels and amounts owed to trade creditors.
Approval from Corporate Debt Restructuring Committee (CDRC)
Sapura Energy received confirmation from Malaysia’s CDRC that at least 75% of its financiers provided approval-in-principle for a proposed debt restructuring scheme, a significant milestone. This approval facilitates court-convened meetings with all creditors and is part of Sapura’s efforts to offer a fair and equitable resolution to creditors, including small and medium Malaysian vendors.
Government Initiative for Debt Resolution
The CDRC is a government initiative to provide a platform for corporate borrowers and creditors to work on feasible debt resolutions, avoiding legal proceedings. The goal is to assist distressed corporations in resolving debt obligations effectively.
Source: upstreamonline.com
