Kuala Lumpur, 26 September 2024

Summary of Q2 FY2025 financial results: 

• Revenue of RM1.2 billion
• EBITDA of RM241 million
• EBITDA margin of 20 percent
• LATAMI of RM5 million
• Group order book at RM5.9 billion and order book of joint ventures at RM6.1 billion
• Free cash flow of RM275 million

Sapura Energy Berhad (“Sapura Energy” or “the Company”) and its group of companies (“the Group”) continued to demonstrate resilience in its second quarter of financial year 2025 (“Q2 FY2025”) despite challenging external factors, recording a 5.8 percent increase in revenue year-on-year (“YoY”) to RM1.2 billion, up from RM1.14 billion in the second quarter of financial year 2024 (“Q2 FY2024”).

Sapura Energy Group Chief Executive Officer Datuk Mohd Anuar Taib said, “The team has shown tenacity despite challenging conditions. This reflects our underlying operational strength and capacity to deliver results under adverse circumstances. While we accelerate efforts to successfully implement our Reset Plan, we remain equally committed to exploring growth opportunities to ensure long-term sustainability of the Group.”

The Group generated RM275 million free cash flow in the first half of FY2025  , reflecting steady operational performance across all key segments. The Group’s earnings before interest, taxes, depreciation and amortisation (“EBITDA”) for the quarter reached RM241 million, representing an EBITDA margin of 20 percent. All business segments posted positive EBITDA with Engineering & Construction (“E&C”) contributing RM199 million, Drilling RM138 million, and Operations & Maintenance (“O&M”) RM35 million.

The Group reported a loss after tax and minority interests (“LATAMI”) of RM5 million in Q2 FY2025, compared to RM43 million of profit after tax and minority interest (“PATAMI”) in the corresponding quarter of the previous year (“Q2 FY2024”). Foreign exchange losses totalling RM101 million, primarily due to the depreciation of the US dollar against the ringgit, weighed heavily on the Group's results​. Excluding the effect of foreign exchange losses, the Group’s Q2 FY2025 adjusted PATAMI is RM96 million.

“With the strengthening of the ringgit, we will likely see further impact of foreign exchange volatility in the coming quarters”, Datuk Mohd Anuar explained. “At the operational level, the group generally maintains a natural hedge against foreign currency exposure. However, at the corporate level we anticipate unrealised foreign exchange losses from existing multi-currency financing facilities, which highlights the essential need to restructure our debt portfolio to mitigate such risks.  We are actively collaborating with lenders and creditors to expedite this restructuring process to ensure greater stability for the Group in the future.”

The Group's order book growth was constrained by limited access to working capital and bank guarantee facilities, impacting its ability to secure two major contracts worth around RM4.5 billion. Nevertheless, the Group sustained an orderbook of RM5.9 billion, with its joint ventures holding an additional RM6.1 billion. E&C, O&M, and Drilling continue to actively pursue new projects within their respective segments.

The Group remains strategically committed to Energy Transition, with majority of its current projects centred on gas development and decommissioning across all business segments.  E&C recently completed several key projects, including offshore transportation and installation works for an LNG development in Congo, a brownfield gas development project in Peninsular Malaysia, plus decommissioning projects in Thailand, New Zealand, and Australia. O&M has commenced two long-term contracts for subsea inspection, repairs and maintenance at oil and gas fields in Malaysia, under the Provision of Pan Malaysia Underwater Services for PETRONAS Group of Companies and Production Arrangement Contractors. O&M was also recently awarded a hook-up and commissioning contract for another gas development in Thailand, showcasing its expansion beyond the traditional market in Malaysia. Meanwhile the Drilling segment has nine tender assist drilling rigs working at mostly gas fields in South-east Asia and West Africa, operating at about 97 percent technical uptime. Demonstrating its trusted partnership with clients, the segment recently secured a contract extension for its drilling services in Angola.

PROGRESS IN RESET PLAN

The Group is making good progress in the divestment of its 50 percent equity interest in SapuraOMV Upstream Sdn Bhd to TotalEnergies Holdings SAS, which is expected to close by next year. The portfolio rationalisation is a major step towards addressing the Group’s unsustainable debt and outstanding payables, while enabling the Group to maintain a sharp focus on its core capabilities in energy solutions.

As previously announced, the High Court of Malaya on June 6, 2024 granted Sapura Energy and certain of its wholly owned subsidiaries an extension of the Convening and Restraining Orders for a period of nine months until 10 March 2025. Following this, the Corporate Debt Restructuring Committee (“CDRC”) extended the standstill period for the Company and its relevant subsidiaries, up to 10 March 2025. The Group is currently drafting a proposed restructuring scheme (“PRS”) which will be voted upon by creditors during a court-convened meeting.

Datuk Mohd Anuar acknowledged the prolonged debt restructuring process, while assuring creditors that reaching a resolution remains the Group’s topmost priority. “We are diligently working on a comprehensive PRS together with the lenders and creditors. There are still a few moving parts that need to be ironed out”, he emphasised. “Our primary concern is to present a fair and equitable proposal that takes into account all stakeholders, particularly the small and medium Malaysian vendors who continue to support us throughout the turnaround effort.”

Cautionary note: “Sapura Energy”, “the group” and “the company” are used for convenience where references are made to Sapura Energy Berhad in general. Similarly, words like “we”, “us” and “our” are used to refer to Sapura Energy Berhad in general or to those who work for the company and its subsidiaries, where relevant. This press release may contain forward-looking statements. All statements other than statements of historical facts included in this press release, including, without limitation, those regarding our financial position, financial estimates, business strategies, prospects, plans and objectives for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Such forward-looking statements reflect our current view with respect to future events and are not a guarantee of future performance. Forward-looking statements can be identified by the use of forward-looking terminology such as the words “may”, “will”, “would”, “could”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “aim”, “plan”, “forecast” or similar expressions and include all statements that are not historical facts.