SapuraKencana's Net Profit Declines 21% to $69.53M in 1Q FY16

Malaysia's SapuraKencana Petroleum Berhad, an integrated oil and gas services and solutions provider with upstream petroleum assets in Southeast Asia, registered a 21 percent decline in net profit to $69.53 million (MYR 261 million) for first quarter 2016 (1Q FY16) that ended April 30, compared to $88.44 million (MYR 332 million) a year earlier, according to financial results released by the company Monday.

Company revenue fell by a smaller margin to $601.5 million (MYR 2.258 billion) during the 1Q FY16, 8 percent lower than $651.1 million (MYR 2.444 billion) in 1Q FY15 as oil and gas producers worldwide reduced capital expenditure in response to weak global oil prices. 

"The global oil and gas industry remains in a challenging environment driven by the uncertainty in crude oil prices ... Within this context, we anticipate to face pressure on our profit margins and have taken proactive steps to ensure we remain resilient," SapuraKencana Petroleum President and CEO Shahril Shamsuddin commented on the company's 1Q FY16 financial performance.

The firm believes that there are still opportunities in the oil and gas sector despite the industry slowdown as shown by its recent success in winning contracts worth around $269 million in Vietnam, Indonesia, India and Mexico.

"We continue to expand our footprint in Latin America with our entry into Mexico. We have established local operations, SapuraKencana Mexicana in view of longer-term presence and opportunities," Shahril added.

The value of the company's order book amounted to $6.69 billion (MYR 25.1 billion) as of April 30, with the Engineering & Construction division accounting for 74.1 percent of the total at $4.96 billion (MYR 18.6 billion). Drilling came next at $985.7 million (MYR 3.7 billion), while Energy -- comprising its upstream business -- made up $745.9 million (MYR 2.8 billion).

In terms of a geographical breakdown of SapuraKencana Petroleum's order book, the Americas was top with $3.38 billion (MYR 12.7 billion) or 50.6 percent of the total. Asia Pacific was a close second at $3.06 billion (MYR 11.5 billion) or 45.8 percent and Africa made up the remainder at $239.76 million (MYR 900 million).


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