Sapura Energy’s 1Q FY2024 profit rose 58%—what drove it?

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Sapura Energy's 1Q FY2024 Profit Surge Driven by Multiple Factors

Sapura Energy Bhd experienced a significant 58 per cent increase in net profit for the first financial quarter ended April 30, 2023, reaching RM146.09 million compared to RM91.93 million in the same period last year. This improved financial performance was primarily propelled by lower depreciation charges, a higher share of profits from its associate companies, and a favourable foreign exchange gain resulting from the US dollar's appreciation against the Malaysian ringgit.
Revenue Growth Fueled by Operational Increases

The company's revenue saw a rise to RM951.73 million from RM886.08 million in the prior year's corresponding quarter. This uplift was attributed to enhanced rig utilisation within the drilling segment and a notable increase in project activities across the operations and maintenance (O&M) division. These operational improvements contributed directly to the overall revenue expansion for the quarter.
Strong Ebitda Across All Business Segments

Sapura Energy reported a substantial 30 per cent improvement in its earnings before interest, taxes, depreciation, and amortisation (Ebitda), reaching RM332 million for the quarter, up from RM250 million in the previous year. Encouragingly, all of Sapura Energy's business segments contributed positively to this Ebitda figure. The engineering and construction (E&C) segment generated RM46 million, the O&M segment reported RM7 million, and the drilling segment recorded a robust RM130 million in Ebitda.
Resilience Amidst PN17 Status and Restructuring Efforts

Group chief executive officer Datuk Mohd Anuar Taib highlighted that these positive results underscore the group's resilience and commitment to a turnaround, even while operating under Practice Note 17 (PN17) status, which limited access to working capital and bank guarantees. Sapura Energy has secured RM1.4 billion in new contracts, bolstering its outstanding order book to RM5.8 billion, with 72 per cent of these new wins originating from foreign contracts. The company is also progressing with its proposed restructuring scheme (PRS) and regularisation plan, having secured extensions for both until November 30, 2023, and March 10, 2024, respectively, to finalise these critical financial arrangements.

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Sapura Energy’s 1Q FY2024 profit rose 58%—what drove it?

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