Latest news with #Sapura
The Star
07-07-2025
- Business
- The Star
Sapura set to achieve earnings recovery in 2Q26
PETALING JAYA: BIMB Research has cut oil and gas company Sapura Energy Bhd 's earnings forecast by 18% for the company's 2026 financial year (FY26) as it adjusts for the group's losses incurred in its first quarter ended April 30, 2025 (1Q26). The research house said in a report that the order book for the group's subsidiaries and joint ventures in 1Q26 declined to RM7.9bil (4Q25: RM8.5bil) and RM4.8bil (4Q25: RM5.5bil), respectively, on slower replenishment. In 1Q26, Sapura Energy reported a net loss of RM477.96mil, compared with a net profit of RM82.13mil in the previous corresponding period, while revenue dropped to RM801.37mil from RM1.18bil a year earlier. The losses were mainly due to operational challenges in executing an engineering, procurement, construction and installation (EPCI) contract in Angola. The group's engineering and construction segment also took a hit of RM304mil for foreseeable losses from that project. Meanwhile, the drilling segment saw a weaker asset utilisation rate with drilling days declining to 604 days (1Q25: 750 days, 4Q25: 729 days) as the T-17 and T-18 rigs were kept partially active amid transitioning to new contracts. Its operations and maintenance segment was the only one that was profitable, with a pre-tax profit of RM20mil despite activity being slightly weaker in the quarter. However, BIMB Research said Sapura is expected to achieve earnings recovery in 2Q26 onwards. 'This will be driven by a turnaround in the Angola project, which is slated for completion by December 2025 and higher drilling rig utilisation and daily charter rates on commencement of new contracts,' the research house said. BIMB Research also noted it was surprised by another project cost overrun during 1Q26, but 'Sapura's management had guided that it does not foresee this recurring for the remainder of the year'. Separately, Sapura also announced that Bursa Malaysia has approved its proposed regularisation plan. According to BIMB Research, Sapura now still faces some hurdles to get approval from the Securities Commission to obtain a waiver from having to undertake a mandatory general offer before it can finally execute its debt restructuring plan targeted for completion by August 2025 at the earliest. 'The exit from PN17 status may be realised in the second half of next year,' the research house added. BIMB Research maintained a 'hold' call on Sapura with a target price of four sen per share. Separately, UOB Kay Hian Research (UOBKH Research) said Bursa Malaysia's approval of Sapura's regularisation plan marks the beginning of the company's true recovery. 'Sapura is now working hard to meet the August 2025 restructuring date, or latest by the long-stop date which was decided for March 11, 2026. 'Assuming two consecutive quarters of profits, the earliest horizon for Sapura's PN17 status to be removed would be the second half of next year.' UOBKH Research noted that Sapura is planning a restructuring aimed at cutting its debts from RM10.8bil to RM5.6bil. 'Deemed as sustainable debt, the RM5.6bil is equally split between two divisions – a Brazilian joint venture for pipelaying support vessels, and drilling. 'The repayment schedules for the sustainable debt ranges between RM200mil and RM700mil.'
New Straits Times
01-07-2025
- Business
- New Straits Times
Sapura Energy jumps as Bursa clears exit plan
KUALA LUMPUR: Sapura Energy Bhd soared as the most actively traded stock after Bursa Malaysia approved its long-awaited plan to exit financially distressed Practice Note 17 (PN17) status. The counter surged 14.29 per cent to four sen in early trade, with 88.72 million shares changing hands by 10.58am, a sharp revival in interest after nearly no trades were recorded since May 28. The stock earlier touched a morning high of 4.5 sen. At four sen, it commands a market capitalisation of RM643.2 million. The oil and gas contractor started the year at three sen and reached a high of five sen in February, when it secured creditors' approval for a massive debt restructuring plan. The news sparked heavy interest, pushing trading volume to a near two-year high of more than 258 million shares on Feb 27. The latest rally comes as Bursa gave the green light to Sapura's regularisation plan, which includes a capital reduction, major debt workout, fresh fundraising and an exemption from a mandatory general offer. Advised by MIDF Amanah Investment Bank, the plan aims to cut Sapura's borrowings and trade liabilities from RM12.1 billion to RM5.23 billion. It also includes a RM1.1 billion capital injection from the Finance Ministry via Malaysia Development Holding Sdn Bhd (MDH). Once fully converted, the loan stocks will make MDH Sapura's largest shareholder with a stake of over 33 per cent, overtaking Permodalan Nasional Bhd. Bursa's approval, issued on Monday, is subject to shareholder and regulatory approvals, as well as quarterly updates on share issuances linked to the debt instruments. The clearance paves the way for a long-awaited turnaround at Sapura, which has been under PN17 since 2022.
