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SapuraKencana Q1 profit down almost half

SapuraKencana Q1 profit down almost half
SapuraKencana Petroleum (SapKencana) saw first quarter net profit fall by almost half to MYR260.6m ($69.5m) from MYR509.4m in the previous corresponding period due to lower earnings from the energy division as oil prices plunged, the company said in a stock market announcement.

Revenue also slipped 7.5% to MYR2.26bn from MYR2.44bn mainly due to lower revenue from the energy division.

At the operating level, profit fell 27.1% to MYR336.3m, from MYR461.2m previously, excluding the extraordinary gains from acquisition of subsidiaries, SapKencana said.

SapKencana said the decrease in the current quarter operating profit was mainly due to slower business in the energy division whilst the operating profit derived from the services divisions namely engineering and construction (E&C) and drilling remained similar to a year ago.

Energy division revenue dropped by almost half to MYR415.6m from MYR736.3m previously while operating profit plunged to MYR59.4m from MYR375.8m in the previous corresponding quarter. SapKencana said this was "primarily due to a combination of lower barrels of oil lifted as a result of the natural decline of oil reserves in the production sharing contract (PSC) blocks and lower average price per barrels".

"The E&C segment registered marginally lower revenue by MYR48.9m or 4.3% mainly due to lower scope of works for the existing contracts in line with clients' planned activities, offset with higher contributions from newly executed international projects during the quarter," it said.

Operating profit for the E&C segment fell 17.6% to MYR187.4m, from MYR227.5m a year ago.

Meanwhile, drilling segment revenue rose 19.4% from the previous corresponding period mainly due to commencement of contracts for new deliveries and this led to operating profit rising 26.8% to MYR198.6m.

TAGS: Offshore