SapuraKencana Posts $28M Net Profit in 2Q FY16, Down 61% from 1Q FY16
Malaysia's integrated upstream oil and gas services and solutions provider SapuraKencana Petroleum Berhad recorded a revenue of $762 million in the second quarter of financial year 2016 (2Q FY16) that ended July 31, up 22.9 percent from the $620 million gained in 1Q FY16, the company said in the release of its quarterly financial results Tuesday.
During this period, profit after tax (PAT) fell 61.1 percent to $28 million from $72 million as the firm made provision for the impairment of its oil and gas assets amid the prolonged downtrend in global crude oil prices.
SapuraKencana's services divisions -- Drilling and Engineering & Construction -- posted higher operating profits as well as improved operating profit margins, up 22.8 percent, due to contributions from new markets and continued focus on project execution.
Meanwhile, the Energy division continues to generate positive cash flow with operating profits of $33 million. The firm has taken steps to assess its oil and gas portfolio due to the volatile oil and gas markets and subsequently made a provision for impairment which amounted to $147 million.
Despite the industry downturn, SapuraKencana said it has a current orderbook of $6.3 billion.
"The global oil and gas industry continues to face challenges arising from the volatility in crude oil prices. Our robust orderbook of $6.3 billion that we have built to date provides the Group certainty in revenue over the next few years, with $1.6 billion already secured for FY2017. Our strategy to replenish the orderbook remains consistent with a targeted approach on key geographies and customers with contracts that remain commercially viable even in this low oil price environment. We believe our focus on precision in execution and cost optimization will contribute to our resilience through this downturn and position us well for the future,” SapuraKencana President and Group CEO Shahril Shamsuddin said in the press release.
Turning to new projects, the company completed key developments such as the EVA EPCIC (engineering, procurement, construction, installation and commissioning) project for the Trans-Thailand Malaysia Joint Development Authority and the 118 mile (190 kilometer) pipelay for Indonesian PT Perusahaan Gas Negara Persero Tbk (PGAS) for the Kepodang field offshore central Java, Indonesia.
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