Kuala Lumpur, 15 September 2015
SapuraKencana Petroleum Berhad (“SapuraKencana” or “the Company” of “the Group”), one of the world’s largest integrated upstream oil and gas services and solutions providers, announces its second quarter results for the period ended 31 July 2015 (for financial year end 31 January 2016).
Highlights
- Revenue for quarter of USD 762 million, Revenue for first half of USD 1.4 billion
- Profit before tax (excluding provision for impairment of oil and gas assets) of USD 163 million; margins strong at 21.4%
- Improved operating profit margin in Drilling and Engineering & Construction to 22.8% compared to 20.6% in last quarter
- Current orderbook figure of USD 6.3 billion
- Current cash balance USD 487 million, improvement from last quarter of USD 404 million
- Positive performance by new markets of Brazil and Mexico and expectation that additional returns will be generated from our operations in India by the end of FY2016
Recent developments
- Key projects completed include the delivery of EVA EPCIC project for the Trans- Thailand Malaysia Joint Development Authority and the 190km Kepodang project pipelay for Indonesian PT PGAS
- Launch of USD200 million multi-currency Sukuk
| SapuraKencana | ||
|---|---|---|
| Figures in USD million, unless otherwise indicated | Q2 FY2016 As reported |
Q1 FY2016 As reported |
| Revenue | 762 | 620 |
| PBT (excl. provision for impairment of oil & gas assets) Margin (%) |
163 21.4 % |
92 14.9 % |
| PAT (incl. provision for impairment of oil & gas assets) | 28 | 72 |
| Cash Balance | 487 | 404 |
| Basic earnings per share (cents) | 2.0 | 1.2 |
| Net debt / Equity (x) | 1.3 | 1.3 |
Tan Sri Dato’ Seri Shahril Shamsuddin, President and the Group Chief Executive Officer said:
"We are encouraged by the progress our business has made in new markets and our continued focus to deliver on key projects that have kept our asset utilisation high. Our yard is making good progress on several EPCIC projects that will be installed by our vessels in the region. Our latest PLSV, the Sapura Ônix has been accepted for early delivery and is already in operation in Brazil. The multi-combination pipelay and heavy- lift vessel, the SapuraKencana 3500 is making good progress in the Gulf of Mexico.
The global oil and gas industry continues to face challenges arising from the volatility in crude oil prices. Our robust orderbook of USD 6.3 billion that we have built to date provides the Group certainty in revenue over the next few years, with USD 1.6 billion already secured for FY2017. Our strategy to replenish the orderbook remains consistent with a targeted approach on key geographies and customers with contracts that remain commercially viable even in this low oil price environment.
We believe our focus on precision in execution and cost optimization will contribute to our resilience through this downturn and position us well for the future.”
Financial information
Second quarter FY2016
Group revenue for the second quarter FY2016 was USD 762 billion compared to USD 620 billion in the previous quarter. Excluding provision for impairment of oil and gas assets, profit before tax is USD 255 million during the first half of the current year.
Our services divisions (Drilling and Engineering & Construction) reported increased operating profits and improved operating profit margins at 22.8%, due to contributions from new markets and continued focus on project execution.
The Energy division reported operating profits of USD 33 million and continues to generate positive cash flow for the group. Given the volatility in the global oil and gas industry, the Group has taken a prudent step to assess its oil and gas portfolio and has subsequently recorded a provision for impairment of USD 147 million. This has brought the profit before tax into a loss position of USD 113 for the division.
This provision for impairment brings the Group’s profit after tax to USD 99 million for the first half of FY2016.
New projects
During this period, the Group demonstrated strong performance in the completion of key projects including the EVA EPCIC project for the Trans-Thailand Malaysia Joint Development Authority and the 190 km pipelay for Indonesian PT PGAS for the Kepodang field offshore central Java.
Several EPCIC projects that include fabrication of wellhead structures and topsides are being executed in our yard. Our new vessels (SapuraKencana 1200 and SapuraKencana 3500) are actively performing offshore construction activities in South- East Asia and Mexico while the Sapura Ônix has commenced work in the pre-salt regions offshore Brazil earlier than the contractual start date. Our drilling division continues to deliver top operational and health and safety performance based on the most recent audits performed by key clients.
The Group continuously refines its financing structure to sustain efficiency in capital management in line with our strategic and operational requirements. The recently announced refinancing of the Group’s existing borrowings into a multi-currency Sukuk worth USD 1.9 billion allows the Group to tap the strong demand for Islamic financial products. On 8th September, the Group successfully launched its first Sukuk issuance of USD 200 million for a tenure of seven years.