SapuraKencana Nets 16% Profit
SapuraKencana Petroleum Berhad announced its third quarter results for the period ended 31 October 2015 (for financial year ending 31 January 2016).
Highlights
Revenue for third quarter of RM2,891 million, year-to-date revenue of RM7,952 million.
Profit before tax for the quarter (excluding provisions for impairment on property, plant and equipment, oil and gas properties, investments and changes in provision) of RM463 million with a profit before tax margin of 16.0%.
Current orderbook of RM21 billion.
Current cash and bank balance of RM2,356 million, an increase of RM566 million from the previous quarter.
Positive performance in expanded areas of operations in Brazil and India. In Brazil, our operations continue to achieve high vessel utilization (average of 98.6%) and the Sapura Onix commenced operations two and a half months ahead of schedule. In India, EPCIC work has started on the Vasai East and Mumbai High South projects.
Recent developments
SK 310 B15 Field Development Plan (FDP) approved by PETRONAS, in line with expectations for first gas by fourth quarter of 2017.
New contract wins in India including ONGC Mumbai High South Redevelopment Phase III turn key project and Vasai East installation work.
New contract win in Sarawak for Roc Oil for Engineering, Procurement, Construction & Commissioning (EPCC) work.
Extension of drilling contract for SKD Alliance in Côte d’Ivoire.
Strengthening local presence in key markets with the establishment of a local JV in Brunei and the signing of a cooperation agreement with PV Drilling in Vietnam.
Delivery of the Sapura Jade (the 4th vessel for our Brazil operations) from the Royal IHC Shipyard in Rotterdam.
Launched a multi-currency Islamic Medium Term Notes ("IMTNs") programme under the Securities Commissions’ new Guidelines on Unlisted Capital Market Products, and issued the first 7 year USD200m IMTN.
Signed a 6-year USD2.1 billion multi-currency term facility based on Shariah principles of Murabahah with the proceeds raised utilized to refinance the Group’s existing short term Islamic Facility.
SapuraKencana Figures in RM million, unless otherwise indicated
Q3 FY2016 Q2 FY2016
Revenue 2,891 2,804
PBT (excl. provisions) 463 601
Margin (%) 16.0 % 21.4 %
PAT (incl. provisions) 130 104
Cash & Bank Balance 2,356 1,790
Basic earnings per share (cents) 2.17 1.74
Net debt / Equity (x) 1.27 1.28
Tan Sri Dato’ Seri Shahril Shamsuddin, President and the Group Chief Executive Officer said, “The industry continues to face pressures over the medium term due to weak oil prices and the resultant reduction in capital spending. Despite this, our Services business continues to secure and deliver work in key markets such as Brazil, India, West Africa and Malaysia. The Group remains focused on its strategy of strengthening its position in these key markets while continuing to work closely with customers to deliver solutions that meet their technical and commercial needs.
"In our Energy segment, we are encouraged by the approval for our first gas field development, the B15 field in block SK 310 offshore Sarawak, Malaysia, where first gas is targeted for Q4 2017. This development initiates the commercialization of our gas discoveries and will provide additional long-term visibility on the Group’s oil and gas production. We have successfully signed the 6-year multi-currency Islamic Facility that enables the Group to match its borrowings to the long-term business profile of SKPB and is a demonstration of one of our proactive measures to prepare for long-term resilience. The Group remains committed to continue to grow our orderbook, to optimize costs and to enhance efficiency to remain competitive and to position ourselves to navigate this current period of uncertainty.”
Financial information
Third quarter FY2016
Group revenue for the year to-date third quarter FY2016 was RM7,952 million, 5.4% higher than RM7,549 million in the corresponding period of FY2015. Excluding provisions for impairment on property, plant and equipment and oil and gas properties, provision for impairment on investment and changes in provisions, together totaling RM805 million, the Group’s profit before tax stood at RM1,400 million during the first nine months of the current year.
Our services divisions (Drilling and Engineering & Construction) reported operating profits of RM1,345 million. However the Energy division reported an operating loss of RM550 million mainly due to the weak oil price environment and the resulting provisions for impairment made.
New projects
During this period, the Group demonstrated strong performance in the completion of key projects including the Indonesian Kepodang project with the installation of a 200km of gas pipelines, jacket installation works for HESS; and completion of transport and installation work for PEMEX.
The Group was awarded new contracts for the Mumbai High South Redevelopment Phase – III Project and the Vasai East projects in India. The Mumbai High South Redevelopment Phase – III Project was for EPCIC of wellhead platforms, submarine pipelines & cables and the modification of existing facilities. The Vasai East project was a subcontract for the installation of structures and pipelines and other subsea work. Both fields, Mumbai High South and Vasai East, are offshore Mumbai, in the Arabian Sea.
Financing
The Company, through its subsidiary, SapuraKencana TMC Sdn Bhd, signed a Murabahah Term Islamic financing facility of up to USD2.1 billion (or its equivalent in MYR) with a consortium of Malaysian, regional and international banks. The 6-year multi-currency facility is based on the Shariah principles of Murabahah and proceeds raised will be utilized to refinance the Group’s existing short term Islamic Facility. This new facility reflects the Group’s continued commitment to retain its status as a Shariah-compliant security under Securities Commission Malaysia guidelines.
