Sapura Energy has posted encouraging financial results for the first quarter of 2022, fuelling hopes the troubled Malaysian offshore player can start putting last year’s heavy losses behind it.

The company posted an after-tax profit of 92 million ringgit ($21 million) for the quarter ended 30 April 2022, suggesting it might have turned a corner after haemorrhaging the equivalent of $2.12 billion in losses in 2021.

Sapura’s earnings before interest, taxes, depreciation and amortisation (Ebitda) stood at 250 million ringgit in the most recent quarter, while revenue was 886 million ringgit.

New contract wins led by its drilling business, higher oil prices and a management reorganisation were factors behind the improvement.

Green shoots

Sapura chief executive Anuar Taib said the company was “seeing the first green shoots of recovery, following the implementation” of its corporate reset plan.

However, Anuar added the company still has “significant hurdles to overcome” before it can sustain this encouraging momentum.

Sapura has been divesting assets to stay afloat. Earlier this month the company triggered the “Practice Note 17” (PN17) criteria used by the Malaysia bourse as a credit warning regarding companies in distress.

Sapura is working on a restructuring plan as part of these bankruptcy protection proceedings.

“Delivering our reset plan becomes more important than ever as it is our route to a stable platform for the group, enabling us to exit the PN17 status and grow in the near future,” Anuar said.

Reset plan

The company said its reset plan — initiated in December 2021 — aims to create long-term sustainability by rebuilding the group’s balance sheet, enhancing its operational and risk management framework, and charting future business direction through portfolio rationalisation.

The offshore and marine contractor, which also has upstream interests, joined the extensive list of companies under PN17 after months of financial woes.

New contractual wins

Sapura recorded 2.5 billion ringgit-worth of new contractual backlog in the latest quarter, led by its drilling subsidiary.

“The group’s order book currently stands at 8.3 billion ringgit. These awards signal a deliberate shift in its bid strategy to focus on areas where it is highly competitive,” it said.

Key awards for its engineering and construction business included a subsea umbilicals, risers and flowlines contract award from Enauta Energia for its Atlanta full field development in the Santos Basin, offshore Brazil, that it won as part of a joint venture.

In addition, Sapura’s drilling business segment won three long-term contracts for its offshore tender-assist drilling rigs from Thailand’s PTTEP, and another award for a new drilling campaign offshore Malaysia.

Stay a step ahead with the Upstream News app
Read high quality news and insight on the oil and gas business and its energy transition on-the-go. The News app offers you more control over your Upstream reading experience than any other platform.