Update

Sapura Energy secured 5 contracts with a combined valued of RM1.47b namely:

• Pan Malaysia Transportation & Installation of Offshore Facilities for PETRONAS Carigali Sdn Bhd and Sarawak Shell Bhd that will be executed throughout 2018.

• Provision of Maintenance, Construction and Modification (MCM) Services for PETRONAS Carigali Sdn Bhd (Package A – Off Shore) – Sarawak Gas for 5 years expiring in September 2022 with one year extension option.

• Provision of Hook-Up, Commissioning and Offshore Construction Services for Repsol Oil & Gas Malaysia Limited for 2 years expiring in September 2019 with one year extension option.

• Provision of Mechanical Works for the Flexi High Density Polyethylene (HDPE) Plant for the Refinery and Petrochemical Integrated Development (RAPID) Project in Pengerang which is expected to complete by March 2019.

• Three jobs in Brazil for Centrais Eletricas de Sergipe SA (CELSE) comprising provision of (1) Engineering, Procurement and Construction related to Pipeline for UTE Porto de Sergipe 1 Combined Cycle Power Plant, (2) Transportation & Installation of the Offshore Floating, Regasification and Storage Unit’s (FSRU) Mooring System and (3) Hook-Up of the FSRU/Riser/Umbilical. The work is expected to complete by December 2018.

Orderbook – Orderbook is estimated to rise to RM16b from RM15.1bn in 2QFY18.

Earnings Outlook

Earnings forecast maintained – We are keeping our EPS forecasts for FY18 and FY19 as the contract wins are within expectation.

Risk – The group faces challenges in replenishing its orderbook amid tough operating environment despite recent gains in oil prices.

Valuation & Recommendation

We are keeping our call at HOLD with a target price of RM1.48 based on 0.7 times P/B.

Source: JF Apex Securities Research - 16 Nov 2017