Sapura Energy

Re: Sapura Energy

Postby winston » Sun Apr 14, 2019 7:42 am

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Sapura Energy secures RM1.3bil jobs

PETALING JAYA: Sapura Energy Bhd’s shares rose after it announced it had secured RM1.3bil worth of new jobs.

The oil and gas counter, which was briefly suspended yesterday pending the announcement, gained one sen to close at 34.5 sen.

It was the most actively traded counter, with 312.4 million shares changing hands.

In total, there were five new contracts worth a combined sum of about RM1.3bil that Sapura Energy had won for its engineering and construction and drilling segments.

In its filings with Bursa Malaysia, the company said the new wins included a submarine rescue service contract for the Royal Australian Navy. And marking its foray into Egypt, the group’s unit Sapura Offshore Sdn Bhd won a subcontract from Pan Marine Petroleum Services Company for the installation of six new subsea pipelines in the Gulf of Suez.

The list also included a contract from ENI East Sepinggan Ltd won by Sapura Offshore for the construction and installation of two offshore rigid pipelines from the Jangkrik facility to a future manifold near Merakes drilling centres.

The group said its growing orderbook, resulting from the new contract wins, was expected to increase its asset utilisation and contribute to improving its financial performance.

Source: The Star

https://www.thestar.com.my/business/bus ... 3bil-jobs/
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Re: Sapura Energy

Postby winston » Sat Apr 20, 2019 8:40 am

Sapura Energy needs time to return to the black

PETALING JAYA: Sapura Energy Bhd may need more time to return to the black despite recent contract wins.

CIMB Equities Research, which is retaining its “hold” call for the oil and gas stock, said Sapura Energy announced several contracts on April 12, with more likely to follow as it is in the process of bidding for many more contracts.

“The key is how profitable the contracts will be, given that Sapura Energy has been under pressure to build its order book and may have bid competitively,” it said in its report yesterday.

The research house has an unchanged sum-of-parts based target price of 37 sen on the stock.

Sapura Energy had earlier disclosed that it had a RM17.2bil order book as at Jan 31, 2019, so the new wins will raise the proforma Jan 31 order book to RM18.5bil, or RM18.6bil factoring in another drilling contract which had not yet been announced by the company but already reflected in Riglogix’s database.

“We had factored in RM4.7bil in E&C revenue for FY1/20F, against RM4.6bil in contracts won to-date.

“Our revenue target may be exceeded since we are still in the early part of the financial year, but we are more concerned about how profitable these contracts will be,” CIMB Research noted

Sapura Energy’s E&C arm delivered an estimated EBITDA margin of only 1% in FY19, or 5.6% if excluding a RM170m in cost overruns from a domestic onshore project, which compares unfavourably to FY18’s EBITDA margin of c.10% and FY17’s c.13%.

For E&C contracts to be executed in FY20F, CIMB Research factored in an EBITDA margin of 5%, which it believes is reasonable, albeit tight.

“The risks to Sapura Energy’s E&C earnings remains high, given that the expected thin margins leave little room for error in execution.

“We have assumed Sapura Energy to deliver E&C revenue of RM5bil and an EBITDA margin of 10% for FY21F, assuming that global E&C asset utilisation rates improve following an expected increase in offshore capex,” it said.

According to the research firm, Sapura Energy is bidding for E&C work in Qatar’s North Field, India’s Heera field, Saudi Arabia’s Marjan and Zuluf fields, Mozambique’s Mamba field, pipeline installation work in Greece and India, among many others, as reported by Upstream.

New contracts for Sapura Energy’s tender drilling rigs (TDR) SAPE announced two new contracts for the T-9 tender barge and the Berani semi-tender worth US$100mil.

Another contract for the T-18 worth US$22mil was reported by Riglogix but yet to be announced by Sapura Energy.

“Based on contracts secured to date, the TDR fleet as a whole is poised to deliver 41% utilisation rate in FY20F, which should rise once more drilling work is secured, to our forecast of 46%.

“But we note that there are big differences between the shallow-water tender barge fleet which has secured contracts for 24% utilisation, versus the deep-water-capable semi-tender fleet with 61% utilisation for FY20 forecast.

“We expect this to persist, as tender barges compete with more flexible and more competitively priced jack-up rigs in South-East Asia.

“As such, for the forecast period, we lower our utilisation assumption for tender barges from 35% to 30%, and raise our utilisation assumption for semi-tenders from 60% to 65%,” CIMB Research pointed out.

Source: The Star

https://www.thestar.com.my/business/bus ... eg9i3Ye.99
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Re: Sapura Energy

Postby winston » Fri Jun 28, 2019 9:47 am

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Sapura Energy (SAPE MK)
1QFY20: Margins Remain Challenged


SAPE’s 1QFY20 loss was greater than expected, even despite guidance of a weak 1HFY20 horizon but with a lower interest/depreciation cost base.

While E&C margins and rig utilisation are set to improve lending support to profit levels by 2HFY20, we now conservatively assume that an E&C margin ramp-up would be more muted.

Our new forecasts assume losses for FY20 and small profits in FY21/22.

Maintain HOLD with an adjusted SOTP-based target price of RM0.30. Entry price: RM0.27.

Source: UOBKH

https://research.uobkayhian.com/content ... edf14ff07e
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Re: Sapura Energy

Postby winston » Sun Jun 30, 2019 8:42 am

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CIMB Research sees very tough conditions ahead for Sapura Energy

KUALA LUMPUR: CIMB Equities Research expects conditions to remain very tough this year for Sapura Energy which reported a disappointing Q1 performance.

The research house said on Friday the company posted core net loss of RM188mil making up 36% of its previous full-year loss forecast, due to weak margins.

“Consensus’ out-of-kilter FY20F profit forecast of RM130mil will need to be slashed significantly, likely weighing on future share price performance.

“Maintain Hold with lower SOP-based target price of 32 sen, as we cut our valuation of the drilling business on slower recovery assumptions,” it said.

Sapura Energy’s 1QFY20 core net loss of RM188m was 21% wider on-year, mainly on account of the weaker underlying earnings at all of its’s business segments, namely the engineering
& construction (E&C), tender drilling rig (TDR), Brazil pipelay supply vessel (PLSV), and the exploration & production (E&P) segments.

The core results would have been even weaker if not for the drop in depreciation expense as a result of the drilling asset impairments made in 4QFY19, and the fall in cash interest expense following the repayment of RM7bil of borrowings in early-February 2019 from the proceeds of the rights and RCPS-i issues and the proceeds from the divestment of 50% interest in the upstream E&P business to OMV.

“The reported net loss, however, narrowed by 20% on-year due to several exceptional gains,” it said.

The factors were:-
1) net forex gains of RM25mil
2) gain on disposal of fixed assets of RM11mil
3) an RM88mil arbitration settlement received from Newfield in relation to Sapura Energy’s purchase of Newfield’s oilfield and gasfield blocks in Malaysia in 2014, partially offset by
4) a RM63m write-off of capitalised upfront loan arrangement fees.

The E&C EBITDA margin declined to just 2% in 1QFY20, from 8% in 1QFY19, as several of Sapura Energy’s projects remain in the early stages of execution where margins are weaker, and because acute competition in the market had required Sapura Energy to bid aggressively for its contracts.

“There is hope for some improvement as we head into 2HFY20F and FY21F. Meanwhile, the PLSV business in Brazil will see two of its six assets complete their five-year firm period this year, and SAPE has not yet secured replacement contracts for them.

“Margins on new contracts, if any, will be lower as charter rates have weakened,” it said.

Based on contracts announced to-date, Sapura Energy’s may achieve firm TDR utilisation of 40% invFY20F, or 43% when including option periods, 6% pts higher than the 37% achieved in
FY19.

While rates in Southeast Asia probably did not change, Sapura Energy did secure work in
Angola for the Jaya semi-tender at a very attractive rate. This underpins an expected improvement in the TDR earnings for this year.

The Gorek, Larak and Bakong fields of SK408 are on track for first gas at end-CY19F, and this will deliver higher earnings to Sapura Energy.

In the meantime, E&P earnings may be impacted by recent declines in oil prices, and amortisation charges on “purchase price adjustment” arising from the upward revaluation of the carrying value post-OMV sale.

Source: CIMB

https://www.thestar.com.my/business/bus ... 6HGIBao.99
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Re: Sapura Energy

Postby winston » Thu Jul 11, 2019 7:57 am

Sapura Energy likely to see margin pressure in FY20

KUALA LUMPUR: Affin Hwang Capital research expects Sapura Energy Bhd to remain in the red in FY20 despite narrowing losses due to poor E&C margins.

In a note, the research house said E&C will likely see some margin pressure even as yard utilisation is projected to improve significantly from the previous year.

"The associate profit could also be weaker on lower renewed charter rates as two Brazil pipe lay support vessel (PLSV) contracts are expected to expire in July and Sept19.

"Nevertheless, we remain positive on the E&P division as production levels will see a ramp up in FY21 once the SK408 Gorek, Larak, Bakong (GLB) field achieves first gas by end-2019, it said.

However, the drilling division is expected to help narrow overall losses as rig utilisation improves from the current 33% to about 55% by end-FY20.

"Assuming all goes well, the drilling division will likely see profit breakeven by 3QFY20."

Affin Hwang cut its FY20 profit forecast to a loss and slashed FY21-22E profits by 49% to 59% after imputing lower E&C and drilling margins, and a lower Brazil profit contribution after the contract expiry of 2 PLSV vessels in FY20 and 1 in FY22.

It added that its earnings revision also took into account its ower average Brent oil gas price forecasts of US$67 a barrel for FY20 and US$68 a barrel in FY21.

The research house maintained a hold call on Sapura Energy with a lower target price of 33 sen from 35 sen previously.

Source: The Star

https://www.thestar.com.my/business/bus ... LXbRlrU.99
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Re: Sapura Energy

Postby winston » Fri Jul 19, 2019 7:52 am

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Sapura Energy expects to be profitable in 12 months

President and group chief executive officer Tan Sri Shahril Shamsuddin said the company aims to return to the black when the utilisation of its drilling and E&C business crosses the 70% mark.

KUALA LUMPUR: Sapura Energy Bhd (SEB) expects its operations -- drilling, engineering and construction (E&C) and exploration and production (E&P) -- to be profitable in 12 months.

President and group chief executive officer Tan Sri Shahril Shamsuddin said the company aims to return to the black when the utilisation of its drilling and E&C business crosses the 70 per cent mark.

Speaking to reporters after SEB's annual general meeting today, he said the increase in the utilisation of assets will drive the group’s profitability.

Currently, its drilling division's rig utilisation is at 50 per cent and is expected to hit 70 per cent over the next 12 months.

Shahril said the stable oil prices of between US$60 and US$65 per barrel bodes well for the company and expects the price range to remain over the next two years.

The group has secured RM2.8 billion worth of projects year-to-date and targets to secure another RM3 billion worth of projects which will likely increase its orderbook up to RM22 billion from RM17.2 billion recorded in the 2019 financial year.

SEB is also actively bidding for projects in the renewable energy (RE) sector overseas, mainly in Europe, and targets to boost the revenue contribution from the segment by between 10 and 15 per cent in the future.

With Petronas actively venturing into the RE sector, Shahril said the group is preparing itself to be able to serve the industry's needs.

He said if the company wins new drilling contracts, it will allocate between RM200 million and RM300 million of its capital expenditure to complete the construction of some of its rig assets.

In the first quarter ended April 30, 2019, SEB has managed to reduce its net loss to RM109.10 million from RM135.73 million in the same period a year ago.

Revenue for the quarter jumped to RM1.63 billion against RM845.17 million previously.

Source: Bernama

https://www.thestar.com.my/business/bus ... smetzmK.99
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Re: Sapura Energy

Postby winston » Mon Sep 30, 2019 10:28 am

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Sapura Energy (SAPE MK)
1HFY20: Losses To Persist Until FY21


1HFY20 loss significantly missed expectations.

The recovery in rig utilisation will be slower than expected as some rigs will only work partially in 3QFY20.

SAPE will also need to replenish PLSV contracts.

We now assume earnings turnaround being delayed to 2HFY21.

Despite improving E&C profits, margin improvement is now guided to be later.

Upstream JV operations will be loss-making until SK408 commences large production from FY21.

Maintain HOLD with a lower target price of RM0.27.

Entry price: RM0.23.

Source: UOBKH

https://research.uobkayhian.com/content ... 0cfbaecae4
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Re: Sapura Energy

Postby winston » Tue Oct 01, 2019 8:57 am

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The long march

1HFY1/20 core net loss of RM302m made up 68% of our previous full-year forecast, or 15% below expectations (consensus FY20F: RM36m profit).

We lower our SOP-based target price to 31 sen, as we trim our valuation of the drilling business on higher operating costs.

Although consensus estimates for FY20-21F may have to be lowered, we maintain Hold as we expect FY21F losses to narrow from FY20F.

Source: CIMB

https://cgs-cimb-insticrm-services.hero ... C24ACB43D7
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Re: Sapura Energy

Postby winston » Tue Nov 19, 2019 8:45 am

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Trading Buy: SAPNRG - 5218
Sideways consolidation breakout
(Last price: RM0.300, Potential upside +25.0%)


Company Profile

Sapura Energy Berhad is a leading global integrated O&G services and solutions provider operating across the entire upstream value chain, covering exploration, development, production, rejuvenation, as well as decommissioning and abandonment stages of the value chain, with global presence in over 20 countries


Trading Catalyst

We noticed decent news flow in the O&G segments and Bursa Energy index has marked a fresh 52W high yesterday 1,239.27 pts. Hence, we are picking some laggards within the O&G stocks.

SAPNRG has narrowed its core net losses RM316.3m in 1H20 vs. core net loss of RM383.2m in 1H19 amid better performance in drilling and E&C (higher revenue) segments.

In addition, its orderbook stood at RM16.3bn (RM4.2bn and RM5.3bn will be recognised in FY20-21) could bode well for earnings moving forward.

Technical View
Resistance: RM0.330 / RM0.345 / RM0.375
Support: RM0.295 / RM0.285
Cut loss: RM0.275

Source: Bloomberg, HLIB
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