KUALA LUMPUR (Sept 26): Sapura Energy Bhd's net loss narrowed by 99.8% to RM2.59 million for the second quarter ended July 31, 2022 (2QFY23) from RM1.52 billion a year ago, thanks to progress in its claims and settlements coupled with higher rig utilisation and construction project completions.

Loss per share declined to 0.02 sen in 2QFY23 from 9.5 sen last year, Sapura Energy said in its results filing.

In a statement, the group attributed parts of the improved results to commercial settlements from certain contracts in its engineering and construction (E&C) businesses, and materialisation of additional claims in operations and maintenance.

These include a successful negotiation of Covid-19 claims for certain contracts, which had been ongoing for a while and contributed to its recent cash flow constraints.

Revenue grew 57% to RM1.17 billion for 2QFY23, from RM747.12 million a year ago.

The quarter also saw higher rig utilisation and day rates for its drilling business segment, although its E&C business segment continues to be under challenge by the current operating landscape.

With the latest results, Sapura Energy recorded a net profit of RM89.34 million for the cumulative six months ended July 31, 2022, versus a RM1.61 billion net loss. This was despite revenue falling 7.2% to RM2.06 billion, from RM2.22 billion.

Notably, the latest quarter saw its second consecutive quarter of revenue growth. Sapura Energy said it is currently executing close to 90 projects globally, nine of which commenced in 2QFY23, with 18 projects completed in the same quarter. Its order book to-date stands at RM7.7 billion.

"We are encouraged by our financial performance this quarter, as it indicates early results in our Reset Plan and we are on the mend. Clearly, the game changer in our future growth is the reduction of unsustainable debt, which we are working hard to resolve with all stakeholders," said group chief executive officer Datuk Mohd Anuar Taib.

Sapura Energy recently sought assistance from the Corporate Debt Restructuring Committee (CDRC), a committee under the purview of Bank Negara Malaysia, to mediate its debt restructuring negotiations with lenders.

The CDRC accepted Sapura Energy's application and the group is expected to submit a proposal for a restructuring of its debts within 60 days from Sept 1.

The group recently completed the divestment of its heavy lift pipe laying vessel Sapura 3000. Further, it has entered into a memorandum of agreement for the disposal of three drilling rigs.

Progress is ongoing for its proposed scheme of arrangement, whereby the group and 22 of its wholly owned subsidiaries are completing the verification of claims submitted by its creditors under the proof of debt exercise.

Under the Reset Plan initiated in December 2021, the group's business segments refocused its bid funnel based on capabilities and risk appetites, while enhancing project management discipline.

Shares of Sapura Energy closed unchanged at four sen per share on Monday (Sept 26), giving it a market capitalisation of RM639.16 million.