KUALA LUMPUR (Dec 9): Sapura Energy Bhd's share price rose 12.5% the day after the group announced that it returned to the black in the third quarter ended Oct 31, 2022 (3QFY2023).
The counter closed half a sen higher at 4.5 sen on Friday (Dec 9), its lowest intraday share price was four sen. Sapura Energy saw a total trade volume of 208.35 million and was the most active stock on Bursa Malaysia.
Year-to-date, the share price remained 10% down from five sen.
Based on Bloomberg, two out of seven research firms placed a "buy" call on Sapura Energy on Thursday (Dec 8) and Friday. KAF Equities' target price (TP) is two sen while BIMB Securities' is 12 sen.
Another two firms, Public Investment Bank and UOB Kay Hian, had "neutral" or "hold" calls with five sen TP.
The remaining three firms — Maybank Investment Bank (Maybank IB), RHB Research and Affin Hwang Investment Bank — gave "sell" calls. Maybank IB's TP was three sen while RHB and Affin Hwang had two sen TPs.
The oil and gas services provider posted a RM10.18 million net profit for 3QFY2023, which was a significant recovery from the RM669.34 million net loss recorded for 3QFY2022.
Sapura Energy also reported a net profit of RM99.53 million for the cumulative nine months ended Oct 31, 2022 (9MFY2023), compared with the massive RM2.28 billion 9MFY2022 net loss.
"The improvement was contributed by a lower recognition of provision for foreseeable losses, lower project costs recognised, lower depreciation, higher share of profits from associates and joint ventures (JVs) and a favourable foreign exchange gain during the [3QFY2023]," the group said on Thursday (Dec 8).
According to its financial report as of Oct 31, it was noted that Sapura Energy's current liabilities stood at RM16.85 billion, with borrowings amounting to RM10.98 billion. Its current assets were RM3.25 billion.
With regard to its prospects, Sapura Energy highlighted that the next few months would be "critical" to the group's efforts in addressing its unsustainable debt and Practice Note 17 status.
"The group's proof of debt exercise with its trade creditors is nearing completion. Further, the group submitted a proposed restructuring scheme to the corporate debt restructuring committee and the financial institutions on Sept 29," it said.
Sapura Energy also said its order book was approximately RM6.8 billion. Separately, the non-consolidated gross order book of the group's JV entities was approximately RM5.7 billion.
The company has five major segments, namely engineering and construction, operations and maintenance, drilling, exploration and production, as well as corporate.
It said the operations and maintenance produced the highest profit before taxation among other segments in 3QFY2023 at RM33.9 million, RM34.9 million higher than in 3QFY2022, due to lower recognition of foreseeable losses and lower costs recognised.
Sapura Energy suffered losses in the past three financial years. It reported a RM4.6 billion net loss for FY2020, RM160.9 million net loss for FY2021, and RM8.9 billion net loss for FY2022.