Sapura Energy Bhd posted a net loss of RM286.05 million for its third quarter ended Oct 31, 2024, dragged by a forex losses of RM213.06 million and higher finance costs.

KUALA LUMPUR (Dec 12): Hurt by foreign exchange (forex) losses of RM213.06 million, Sapura Energy Bhd (KL:SAPNRG) fell into a net loss of RM286.05 million in its third quarter ended Oct 31, 2024 (3QFY2025), from a net profit of RM31.79 million a year earlier.

Earnings were also hit by higher finance costs which rose 19.9% year-on-year as well as lower share of profit from SapuraOMV, due to reclassification from investment to asset held for sale since 1QFY2025, according to a bourse filing on Monday.

The integrated oil and gas services operator completed the divestment of its 50% stake in SapuraOMV to TotalEnergies Holdings SAS on Dec 9.

In a separate statement, Sapura Energy highlighted that the forex were mainly unrealised, and arise from its multi-currency financing facilities. It also said its operations effectively maintain a natural hedge against foreign currency exposure.

The group also noted that its businesses remain cash generative as it saw RM252 million worth of free cash flow generated in the first nine months of FY2025.

Commenting on the forex losses, the group’s interim chairman Shahin Farouque Jammal Ahmad said: “As we mentioned previously, this underscores the critical importance of restructuring our debt portfolio to mitigate these risks. We are actively working with lenders and creditors to accelerate this exercise and enhance the group's financial stability and resilience for the future.”

Sapura Energy said the divestment of SapuraOMV will help address its unsustainable debt and outstanding payables, while enabling it to maintain a sharp focus on its core capabilities in energy solutions.

It also said it had applied to Bursa Malaysia Securities for a further six months’ extension to submit its regularisation plan.

Sapura Energy was classified as Practice Note17 company in May 2022, after its shareholders' equity fell below 50% of its share capital.

For 3QFY2025, the group's revenue grew 4.4% year-on-year to RM1.15 billion from RM1.1 billion, driven by its operations and maintenance (O&M) and engineering and construction (E&C) divisions which grew 21.5% and 1.6%, respectively. This was offset by a 14% fall in its drilling segment's revenue, because of lower utilisation of rigs.

For the first nine months of FY2025, Sapura Energy posted a net loss of RM342.96 million, compared to a net profit of RM213.18 million a year before, while revenue increased 10.6% to RM3.54 billion from RM3.2 billion.

As at end-October 2024, the group’s borrowings stood at RM10.73 billion. Trade and other payables totalled RM5.18 billion, while cash, deposits and bank balances stood at RM1.79 billion. Its accumulated losses increased slightly to RM17.53 billion from RM17.24 billion

The group’s order book currently stands at RM6 billion, while its joint ventures hold an additional RM5.8 billion.

Sapura Energy said its E&C and O&M segments are actively pursuing several prospects, focusing on transportation & installation, subsea inspection and repair & maintenance and decommissioning, whilst aligning its ESG principles across all operations.

Shares in Sapura Energy finished unchanged at 3.5 sen on Monday, valuing the group at RM643.16 million.