Highlights

Sapura Energy - Fresh Jobs Unlikely To Prevent Order Depletion

Date: 18/09/2020

Source  :  AmInvest
Stock  :  SAPNRG       Price Target  :  0.05      |      Price Call  :  SELL
        Last Price  :  0.125      |      Upside/Downside  :  -0.075 (60.00%)
 


Investment Highlights

  • We maintain our SELL call on Sapura Energy (Sapura) with an unchanged fair value of RM0.05/share, pegged to 0.2x to the group’s FY22F NTA as the group could still experience potential losses in the upcoming quarters amid revenue deferrals and possible rights issue.
  • In its second announcement of fresh contracts for this year, Sapura’s subsidiaries and joint ventures have secured engineering and construction jobs worth RM840mil as follows:
     
    • Engineering, procurement, construction and installation (EPCI) services for the Amoca platform, pipeline and subsea cable interconnecting the Amoca to Mizton platforms and floating production storage and offloading vessel by Eni Mexico S. de R. L. de C.V. This is for the Amoca project at Offshore Block Area 1 in Mexico. The works are expected to be completed by 4QFY22.
       
    • Sapura Esmeralda, the flexible pipe laying vessel owned by Seabras Sapura Participações S.A., a joint venture company between Sapura and Seadrill, has secured a 12-month extension of its charter after the expiry of its existing contract in April 2021 by Petrobras in Brazil. The contract scope of work comprises the provision of services and charter for installation and recovery of flexible pipes.
       
    • Sapura’s tender assisted drilling rig, Sapura Berani, has secured a charter for 3 wells plus 1 well extension option over a firm period of 9 months commencing 1QFY22 at offshore Ivory Coast by Foxtrot International LDC.
       
  • While positive on these awards during an intensely challenging down cycle in the sector, these new contracts are unlikely to prevent further declines in the group’s current order book of RM14bil (2.9x FY21F revenues) given the quarterly depletion of RM1.4bil. We estimate that the order book could drop by 4% in the coming 2QFY21 results, which will be released later today.
  • The group had earlier indicated substantive provisions as less likely under the improved oil price environment compared to mid-March this year, notwithstanding the pending audit of its E&P segment by its JV partner, OMV. However, we do not preclude the possibility of an equityraising exercise pursuant to management’s plan to refinance its RM10bil debt with 14 banks by the end of the year and secure additional working capital of RM1.5bil for its ongoing and prospective projects.
  • Given the prospects of further losses in the coming quarters, the stock currently trades at a low 0.2x PBV.

Source: AmInvest Research - 18 Sept 2020

Share this
Labels: SAPNRG

Related Stocks

Chart Stock Name Last Change Volume 
SAPNRG 0.125 +0.01 (8.70%) 380,496,100 

  Be the first to like this.
 


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
View candlestick stock charts with Technical indicators
MQ Affiliate
Be rewarded by being an MQ Affiliate
 
 

515  344  641  962 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 SAPNRG 0.125+0.01 
 AT 0.17+0.015 
 VSOLAR 0.05+0.005 
 KGROUP-WC 0.020.00 
 KGROUP 0.0550.00 
 ARMADA 0.285+0.015 
 KNM 0.205+0.01 
 HIBISCS 0.625+0.035 
 HIBISCS-WC 0.085+0.03 
 NETX 0.145+0.005 

FEATURED POSTS

1. The Equity Market Index Benchmark in Malaysia CMS
2. Trading Scenarios of Derivatives Bursa Derivatives Education Series
3. Derivatives 101 Bursa Derivatives Education Series
4. Why Trade FKLI? Bursa Derivatives Education Series
5. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!
PARTNERS & BROKERS