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SapuraKencana sees 8% higher Q2 profit, but inflated by previous provisions

SapuraKencana sees 8% higher Q2 profit, but inflated by previous provisions
SapuraKencana Petroleum reported slightly higher FY2017 second quarter earnings of MYR112.3m ($27.1m), 8% higher than the MYR104.3m gained in the previous corresponding period, but most of this was due to a MYR539.9m provision for impairment on oil and gas properties which it had booked in the previous period.

Revenues however plunged 40% to MYR1.67bn from MYR2.80bn previously, the oil and gas services provider said in a stock market announcement.

Engineering and construction segment revenue fell 51% to MYR796.7m from MYR1.64bn previously due to lower activities. This resulted in segment pre-tax profit falling 64% to MYR120.1m from MYR330.5m in the previous corresponding period. 

“The decrease is in tandem with the lower revenue and its corresponding scope of works, offset by higher contribution from the joint venture companies,” SapuraKencana said.

The drilling segment's revenue fell 31% to MYR537.7m, from MYR783.8m a year ago, mainly due to the lower revenue from certain rigs which were off contract during the current quarter.  Pre-tax profit for the segment fell 77% to MYR50.3m from MYR222.5m previously due to the lower revenue.

The energy segment meanwhile saw turnover fall 21% to MYR353.3m from MYR449.9m in the previous corresponding quarter due to the lower average realised oil price, resulting in a 77% drop in pre-tax to MYR50.3m from MYR222.5m a year ago.